Partners Unitise UK/Norwegian Block

The three partners in the hefty UK-Norwegian Edinburgh area could take a decision to drill it this year, UK AIM-listed Faroe Petroleum said January 16. It won the production licence 969 in this week's Award of Predefined Areas, but following the takeover by Norwegian DNO this is likely to be among its last announcements.

Through a series of arrangements entered into during 2018, the licence partners have agreed to equalise equity in UK Block 30/14a (Edinburgh Area) and UK Block 30/14b on the same basis as the award in the adjacent Norwegian Blocks 1/6 and 1/9 (PL 969) (together the "Edinburgh Area") as follows: 

Faroe cautioned that the equity equalisation remains subject to certain terms and conditions between the parties and awaits deal completion of the acquisition related to UK Block 30/14a (Edinburgh Area) from  the French producer Total. It has been agreed by the parties that Faroe will operate the Edinburgh Area licences up until a final well decision is taken by the licence partners, after which Shell will become licence operator.

The Edinburgh Area contains the large Edinburgh prospect, which straddles the UK/Norway border in the Central North Sea at the southeastern end of the prolific Josephine Ridge area. The structure is a large, tilted Mesozoic fault block, and is considered to be one of the largest remaining undrilled structures in the Central North Sea covering an area of over 40 km². The prospective reservoirs include the Upper Jurassic Ula age-equivalent (Freshney and Fulmar) and Triassic Skagerrak formations.

On a preliminary, unaudited basis, Faroe's management estimates the Edinburgh prospect to have material volumes with potential for standalone development.

Faroe CEO Graham Stewart said the partnership's "combined operating experience in both the UK and Norway represents a distinct advantage in bringing the drilling of this high impact exploration prospect closer to fruition. We look forward to working with the respective UK and Norwegian authorities to progress this exciting cross-border opportunity."

Stewart has given his notice,  following the effective takeover by DNO which has now more than 75% of the company's shares. Faroe shares will stop trading on February 14, Faroe said, advising shareholders to sell before then as they will be more or less valueless thereafter.

Stewart told the Sunday Times in a January 13 interview that he would find something else to do. "There are lots of opportunities in the North Sea," he said.