LONDON (Alliance News) - Faroe Petroleum PLC on Wednesday said it has been awarded six new exploration licenses offshore Norway, some of which will lead to the company working with major London-listed companies.
The oil and gas company was awarded the new licenses under the 2015 Norwegian APA licence round, with three of them in the Norwegian Sea and the other three inside the Norwegian North Sea.
"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," said Chief Executive Graham Stewart.
"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," he added.
Faroe will hold a 30% stake in licence PL836S, which hosts the Yoshi prospect. The work programme on the licence consists of 3D seismic reprocessing ahead of a drill-or-drop decision in 2018.
The company will hold a 20% stake in licence PL845, home to the Gronoy High prospect. The work programme consists of 2D seismic acquisition ahead of a 3D seismic-or-drop decision in 2018.
The last licence in the Norwegian Sea is PL644B, which hosts the Aerosmith prospect. Faroe will hold a 20% stake in the licence and the programme is the same as PL644 and the drill-or-drop decision is in 2017.
It is noteworthy that Centrica Resources, a subsidiary of Centrica PLC, will hold a 30% stake in the licence for the Yoshi prospect and a 10% stake in the licence hosting the Aerosmith prospect.
Faroe will operate two of the three licenses awarded that are located in the Norwegian North Sea. Faroe will operate and hold a 40% stake in licenses PL825 and PL810 whilst holding a 20% stake in licence PL811.
The operated licenses PL810 and PL825 host the Katie and Runge prospects respectively. A drill-or-drop decision will be made at Katie in 2017, and a decision on Runge will be made in 2018. The other non-operated licence hosts the Gullaxy prospect, where a drill-or-drop decision will be made in 2017.
Centrica Resources will hold a 30% stake in the licence hosting the Katie and Runge prospects, whilst a subsidiary of Tullow Oil PLC will hold a 20% stake in the licence hosting Gullaxy.
"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," said Faroe Chief Executive Stewart.
Faroe shares were trading down 3.0% to 46.10 pence per share on Wednesday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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