Faroe Petroleum Cuts Expenditures, Narrows Production Guidance on Strong Performance

While narrowing its production forecast for the full year on strong performance, Norway-focused Faroe Petroleum cut its net exploration, development and production capital expenditure for 2015 from £135 million to £100 million pre-tax.

Production guidance for the full year 2015 narrowed to 9,000-10,000 boepd from 8,000-10,000 boepd also because of the addition of a new well on the Brage field. 

“The drilling programme in 2015 has been very active, notably with exploration wells following the significant 2014 Pil and Bue oil discoveries.  Preliminary results from Boomerang added to the Company’s resource base and drilling is about to commence on the potentially significant Blink well, the final well in our 2015 programme” Graham Stewart, Chief Executive of Faroe Petroleum, commented in a note released on Tuesday. 

At the same time, the company hedged a significant portion of production at an average floor of 5-50 pence per therm for gas, and $60-90 per barrel for oil.

The company hedged 90% of production in H2 2015, 70% in 2016 and 50% in 2017.

“Faroe’s consistent strategic focus, high quality portfolio and strong balance sheet have ensured that we are well placed to weather a long period of low commodity prices and take advantage of attractive growth opportunities.”

Earlier this year, Faroe Petroleum announced the conditional acquisition of Roc Oil (GB Holdings) Limited, which holds a 12.5006% interest in the Blane Unit in the UK North Sea and a 12.00% interest in the Enoch Unit in the UK North Sea from Roc Oil (Europe) Limited, a subsidiary of Roc Oil Company Limited.