Norway: Faroe Petroleum’s Butch Prospect Successful

Faroe Petroleum, the independent oil and gas company focusing principally on exploration, appraisal and production opportunities in the Atlantic margin, the North Sea and Norway, yesterday reported an oil discovery in well 8/10‐4S on the Butch prospect (Faroe 15%) located in the Norwegian North Sea.

The well encountered net oil pay of approximately 50 metres in the Upper Jurassic reservoir of the Ula formation. Preliminary results based on extensive coring, wireline logs and pressure data show that the well has encountered a light oil in good quality reservoir sands with a very high net to gross ratio. The entire reservoir section was found to be oil bearing and an oil water contact was not penetrated. Extensive data have been collected, including the coring of the hydrocarbon bearing zone, and a full formation evaluation is underway. In accordance with the success case contingency plan, the joint venture has decided to proceed immediately to drill a down‐dip side‐track to appraise for additional volumes of oil further down on the large salt‐induced structure and to try to locate the oil water contact in Butch. The Company expects to be in a position to provide a further update from the planned side‐track operation in the coming weeks.

The Butch discovery is situated in 66 metres water depth in the Norwegian North Sea, close to significant existing infrastructure with the giant Ula field approximately seven kilometres to the West, Tambar approximately 10 kilometres to the  South West and Gyda approximately 20 kilometres to the South.

The other equity holders in this licence are Centrica 40% (operator), Suncor Norge AS 30% and Spring Energy Norway AS 15%.

Graham Stewart, Chief Executive of Faroe Petroleum plc, commented:

 “We are very pleased to announce a discovery on the Butch Prospect, which is our second successful exploration well this year, following the announcement of the West of Shetland Fulla discovery in August and our sixth discovery from eight  exploration wells since 2009. The Butch discovery is very exciting with further upside potential from the planned side‐track well. Alongside our joint venture partners in the licence, Centrica, Suncor and Spring Energy, we very much look  forward to the further evaluation of this discovery.

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Source: Faroe Petroleum, October 19, 2011