Faroe Petroleum Buys into Barents Sea Darwin Prospect (Norway)

Faroe Petroleum  has acquired a 12.5% interest in the Darwin prospect in PL531 in the Norwegian Barents Sea.

The Darwin prospect is a high impact wildcat exploration well located on the Veslemøy High in the frontier western part of the Barents Sea. The prospect is a large closure at multiple levels, which is contained within the PL531 licence and located approximately 60 to 80 kilometres to the south west of the recent Statoil Skrugard and Havis oil discoveries. Multiple targets have been identified on 3D seismic. The first exploration well, expected to spud earliest end December 2012, will test the main Darwin prospect and will contribute towards further de-risking of the large upside potential in the remainder of the licence area.

The acquisition of this share in PL531 is an important step towards Faroe’s ambition of building a strategic position in the Barents Sea and builds on our two large existing licences in the Bjarmeland basin further to the East.

Faroe has agreed to carry Talisman Energy Norge AS’ retained 12.5% share of base well cost obligations in respect of the well, in return for a 12.5% share in the licence. Faroe’s costs in respect of this farm-in will be satisfied from existing cash resources.

The drilling operations will be operated by Repsol Exploration Norge AS (20%) using the Aker Barents semi-submersible drilling rig. The other joint venture partners are Talisman Energy Norge AS (25%, retained 12.5%), Marathon Oil Norge AS (10%), RWE Dea Norge AS (25%) and Concedo ASA (20%).

The agreement is subject to approval by the Ministry of Petroleum and Energy in Norway.

Graham Stewart, Chief Executive of Faroe Petroleum, commented:

“We are very pleased to announce this farm-in, which secures Faroe a stake in an attractive, high impact, wildcat exploration well. With drilling operations due to begin around the end of the year, this adds a further exciting well to our already substantial drilling programme and gives us access to our first exploration well in the highly prospective Barents Sea. Licence PL531 is an important new position in the promising western part of the Barents Sea – an area where a major breakthrough was achieved last year with the giant Skrugard oil discovery and which is expected to be highly competed for in the upcoming 22nd Licensing Round.”

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Press Release, August 23, 2012