Faroe Petroleum Buys Interest in East Foinaven Field (UK)
- Business & Finance
Faroe Petroleum has completed the previously announced acquisition of a 10% non-operated interest in the BP-operated East Foinaven oil field and a 0.5% interest in the West of Shetland Pipeline System, both from Marubeni Oil & Gas (North Sea) Limited.
The net consideration payable for the acquisition of the Interests, after adjusting for net income receivable by the Company from the sale of hydrocarbons from the field during the period, has been reduced to approximately US$22.5 million which is to be funded from the Company’s existing cash resources.
Remaining Proved and Probable Reserves, as evaluated by the Company, as at 1 January 2013 were 1.2 million barrels of oil equivalent net to Faroe Petroleum. Average daily production for the first six months net to the Company was approximately 400 boepd.
Graham Stewart, Chief Executive of Faroe Petroleum, commented:
“We are very pleased to broaden our production base further through the acquisition of the East Foinaven interest, which boosts and diversifies our oil and gas production portfolio.
“East Foinaven is a good quality, long life producing oil field which provides significant upside potential in one of our core areas. The transaction is very tax efficient for Faroe Petroleum, providing shelter for both past and future tax losses in the UK and is in line with our strategy to grow our production base in order to fund the Company’s very active exploration programme. We look forward to an exciting period of exploration drilling kicking off with the Snilehorn well in Norway scheduled to commence at the end of Q3 2013, followed by a further five wells as we head into 2014.”
Press Release, August 9, 2013