Faroe to become operator of two North Sea licences
Faroe Petroleum, an independent oil and gas company, has been awarded six new prospective exploration licences, including two operatorships, under the 2015 Norwegian APA (Awards in Pre-defined Areas) Licence Round on the Norwegian Continental Shelf.
The oil and gas company was awarded three licences in the Norwegian Sea and three in the Norwegian sector of the North Sea.
Licence PL836S Yoshi – Blocks 6406/2,3 below Cretaceous: Faroe (30%), Wintershall Norge AS (40% and operator), Centrica Resources (Norge) AS (30%). The Yoshi prospect sits on a partly eroded horst block located immediately to the south of the Smørbukk Sør Field, and is defined by a clear up-faulted/dip closed structure. Reservoirs are expected to be the same Middle Jurassic Ile & Tilje formation sands as present in Smørbukk Sør. The work programme consists of 3D seismic reprocessing ahead of a drill or drop decision in 2018.
Licence PL845 Grønøy High – Blocks 6609/6, 6610/4,5,6: Faroe (20%), ConocoPhilips Skandinavia AS (40% and operator), Wintershall Norge AS (20%) and Dong E&P Norge AS (20%). The Grønøy High sits in the northern part of the Norwegian Sea, between the Træna Basin to the north and the Helgeland Basin to the south. The play concept consists of localised Mesozoic basins sitting on a basement high, similar to the proven Johan Sverdrup area. The work programme consists of 2D seismic acquisition ahead of a 3D seismic or drop decision in 2018.
Licence PL644B Aerosmith licence extension – Blocks 6506/11: Faroe (20%), OMV (Norge) AS (30% and operator), Repsol Exploration Norge AS (20%), Skagen 44 AS (20%) and Centrica Resources (Norge) AS (10%). This licence represents additional acreage to the existing PL644 Aerosmith license (Faroe 20%) which includes Jurassic prospectivity. The work programme is the same as PL644 and the drill or drop decision is in 2017.
Norwegian North Sea
Licence PL810 Katie – Blocks 2/1, 7/12, 8/10: Faroe (40% and operator), Centrica Resources (Norge) AS (30%), Wellesley Petroleum AS (30%). The Katie Prospect is located in the Norwegian Central Graben, between the Tambar and Gyda fields to the southwest, the Ula Field to the north and the Butch development to the east, in a core area for Faroe. The main prospect is a stratigraphic closure of Upper Jurassic Ula reservoir sands. The work programme consists of G&G studies ahead of a 3D seismic reprocessing commitment or drop decision in 2017.
Licence PL811 Gullaxy – Blocks 7/9,12 8/7,10: Faroe (20%), Centrica Resources (Norge) AS (40% and operator), Tullow Oil Norge AS (20%) and Origo Exploration Norway AS (20%). The Gullaxy prospect is located on the southwestern flank of the Sørvestlandet High, just north of the Butch development where Faroe is a partner. The main prospectivity is located in a similar setting as the Butch Discovery and could add additional volumes to the Butch development. The work programme consists of G&G studies and a 3D seismic purchase or drop decision in 2017.
Licence PL825 Rungne – Blocks 30/3,6: Faroe (40% and operator), Fortis Petroleum Norge AS (30%) and Centrica Resources (Norge) AS (30%). The Rungne Prospect is located between the Oseberg Øst and Huldra fields within the eastern part of the Rungne Sub-basin in the Viking Graben. The prospect is a rotated/tilted fault block with Lower Jurassic Brent Group reservoirs. The prospect sits immediately up dip the well 30/6-11 which encountered oil shows and a potential live column. The work programme consists of 3D seismic reprocessing ahead of a drill or drop decision in 2018.
Graham Stewart, Chief Executive of Faroe Petroleum, commented: “Faroe has again been very successful in its licence application strategy, winning a further six licences in the latest Norwegian licensing round which add further upside potential to our portfolio. Significantly, we have further consolidated our position in core areas of the Norwegian continental shelf in which we have enjoyed recent exploration success, enhancing our acreage positions near and around the greater Njord Areas and the Butch development project. At this stage no well commitments have been offered and should we and our partners progress these toward exploration drilling, Faroe continues to benefit from the Norwegian tax system whereby 78% of all exploration related expenditure is eligible for a tax rebate in the following year.
“Faroe has a material and exciting drilling programme in 2016; we are currently drilling the Kvalross exploration well in the Barents Sea and have two further firm wells in the Norwegian Sea later in the year. Coupled with strong production, a solid cash position and largely un-utilised credit facilities we are confident in our ability to take advantage of opportunities which the current depressed oil price environment presents.”