LONDON (Alliance News) - Oil producer Faroe Petroleum PLC on Tuesday said higher oil prices offset lower production for the first half of 2018, though the company has swung to a significant profit.
Revenue for the six months to June came in at GBP67.8 million, down from GBP80.1 million a year prior. However, adjusted revenue was GBP102.2 million, compared to GBP95.5 million a year before.
Faroe said the statutory figure of GBP67.8 million excludes produced, but not lifted, hydrocarbons.
Production was 13,402 barrels of oil equivalent per day, down from 14,800 barrels of oil equivalent a day a year prior. The drop reflects temporary shut-ins at its Trym and Tambar fields, both in the Norwegian North Sea.
Faroe, which does not pay a dividend, posted pretax profit of GBP73.0 million, after a loss of GBP6.1 million. This was driven by a significant fall in the cost of sales as well as a GBP24.5 million gain on its disposal of Norway's Fenja field.
A highlight during the first half was a discovery at its 20%-owned Iris Hades asset offshore Norway, which added 42 million barrels of oil equivalent to Faroe's total resource, nearly doubling the figure. Faroe has an exploration well planned at Iris Hades for the first half of 2019.
Looking ahead, Faroe is guiding for production for 2018 of between 12,000 and 14,000 barrels of oil equivalent per day.
For the medium term, the target is 35,000 barrels of oil equivalent a day, and Faroe said it is fully funded for this and on track to meet the target organically, though acquisitions are still to be considered.
Faroe has a six well confirmed exploration plan, and the company plans to keep developing existing assets.
Chief Executive Graham Stewart commented: "I am pleased to announce the results for the first half of 2018 - a period of strong profitability, effective portfolio management and material exploration success.
"In the medium term we are targeting material increase in shareholder value and cashflow with our fully funded investment programme across the portfolio, encompassing exploration, appraisal, development and production."
He added: "I remain confident in our ability to deliver our stated near to medium term production growth target of 35,000 barrels of oil equivalent per day."
Shares were 0.3% higher on Tuesday morning at 154.40 pence each.
