Faroe Petroleum has informed of an oil discovery in well 6407/8-6 and sidetrack 6407/8-6A on the Statoil-operated Snilehorn Prospect in the Norwegian Sea (Faroe 7.5%).

Highlights:

• The exploration well 6407/8-6 and sidetrack 6407/8-6A discover oil in the Snilehorn Prospect
• Main bore encountered oil columns totaling approximately 191 metres in the Ile, Tilje and Grey-Beds formations
• The sidetrack encountered oil columns totaling approximately 124 metres in the Melke, Ile and Tilje formations
• The operator’s initial volumetric estimates of the size of the discovery are between 57 and 101million barrels of recoverable oil equivalent (“mmboe”), net to Faroe c. 4 – 8 mmboe
• Total vertical depth of the well was 3,400 metres below sea level and ended in the upper Triassic Grey-Beds Formation
• The well, which spudded on 18th September, was targeting oil and gas in the Jurassic Ile, Tilje and Åre formations (analogous to the Hyme oil field reservoirs). The main bore (6407/8-6) encountered oil columns of approximately 40 metres thickness in the Ile formation, 130 metres in the Tilje formation and in addition approximately 21 metres in the Triassic Grey–Beds formation. Oil-down-to situations were encountered in all three formations in the main bore.

The sidetrack (6407/8-6A) encountered oil columns of approximately 6 metres thickness in the Melke formation, 75 metres in the Ile formation and 43 metres in the Tilje formation. In the sidetrack, oil-down-to situations were encountered in the Melke and Ile formations. The oil-bearing Triassic interval found in the main bore was not encountered in the sidetrack. Pressure data indicates communication between the main bore and the sidetrack and the reservoir properties are as expected.

The preliminary volumetric estimates of the size of the discovery as assessed by Statoil as operator are between 57 and 101 million barrels of recoverable oil equivalent (net to Faroe c. 4 – 8 mmboe).

The vertical depth of the well was 3,400 metres below sea level and ended in the upper Triassic formation. The drilling operations have been undertaken by Statoil (35%) utilising the Songa Trym rig and the well will now be plugged and abandoned as planned.

“We are very pleased with the results of our near-field exploration programme in the Norwegian Sea this year,” says Gro G. Haatvedt, Statoil senior vice president for exploration on the Norwegian continental shelf.

“In three months we have made three new discoveries in the Norne, Åsgard and Njord areas proving a total of 86-166 million barrels of recoverable oil equivalent. These are high value barrels that allow us to extend the production life of our installations.”

The Snilehorn Prospect is located four kilometres from the Hyme producing oil field which in turn is approximately 19 kilometres from the Njord field production facilities. Hyme produces into the Njord field facilities (Faroe holds a 7.5% interest in both fields) and is one of six recent fast-track development projects, which have been successfully executed by Statoil. Hyme was brought on stream earlier this year, only 3.5 years after the Hyme exploration well was drilled.

“A most likely future development of the Snilehorn discovery will be via the Hyme production system to Njord, or as a direct tie-in to the Njord platform,” says Arve Rennemo, Statoil vice president and asset owner of Njord.

The Snilehorn well results also provide new important information about the Halten Bank area in shallow water in the Norwegian Sea and indicate that there may be interesting follow-up potential in this area.

 “This is probably the first time hydrocarbons have been proven in Grey Beds formation in this part of the Norwegian Sea. This will be confirmed by further analyses of the data and may imply further upside potential in this area,” says Haatvedt.
Graham Stewart, Chief Executive of Faroe Petroleum, said: ”We are very pleased to announce a significant discovery on the Snilehorn prospect, our second successful exploration well in the Norwegian Sea this year, following the Rodriguez discovery in January. The Snilehorn discovery has the potential to add new production at a low cost through a tie-back via the nearby Hyme field facilities, in which Faroe also participates with a 7.5% interest.

“This discovery marks an excellent start to our fully-funded, high impact exploration and appraisal drilling campaign. We are also very pleased to have spudded the Faroe-operated Novus well yesterday, the second well of our six well programme.”

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November 11, 2013