UPDATE: Faroe Petroleum Soars On Norway Discovery

(Adds detail, executive and analyst comment.) By Jason Douglas Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Oil and gas explorer Faroe Petroleum PLC (FPM.LN) Thursday said it struck oil at an exploration well in the Norwegian North Sea, sending its shares sharply higher. Faroe said an initial analysis of the Maria prospect indicates between 75 million and 155 million barrels of oil equivalent could be recovered. Chief Operating Officer Helge Hammer told Dow Jones Newswires the result was better than Faroe expected. Prior to drilling, it anticipated to encounter an oil column of about 50 meters, compared with the 64 meter column it found, with about 50 million barrels of recoverable oil. "Maria is clearly material to Faroe," Chief Executive Graham Stewart added in a statement. Faroe owns a 30% interest in Maria, giving it net recoverable volumes of between 22 million and 46 million barrels. At 1231 GMT, shares in Faroe were up 30 pence, or 23%, at 159 pence, making it the biggest riser on a 0.1% higher Alternative Investment Market. The well was drilled by operator Wintershall Norge ASA, a unit of chemicals giant BASF SE (BAS.XE). Other partners include Centrica PLC (CNA.LN), Concedo ASA, and Spring Energy Norway ASA. Faroe has the largest equity stake in Maria. Hammer said Faroe and its partners are currently evaluating whether further appraisal drilling is needed at Maria or whether to begin developing it for production. The discovery is situated on the Halten Terrace, which is near existing oil and gas fields and related infrastructure useful for development, Faroe said. Maria is Faroe's second discovery in the Norwegian North Sea this year, following a discovery at Fogelberg in April, and its fourth in the past 12 months. Gas was discovered at the Glenlivet exploration well, west of the Shetland Islands, in September 2009, and a gas and oil discovery was made at the Tornado prospect the following month. The company has an interest in three more exploration wells in the deep waters off the Shetland Islands scheduled to be drilled this year. Italy's Eni SpA (ENI.MI) is due to begin drilling the Anne Marie prospect shortly. BP PLC (BP.LN) is next at North Uist and Chevron Corp. (CVX) is slated to drill Lagavulin late in the third quarter. All are very large prospects and if successful have the potential to be material to shareholder value, said Ambrian analyst Werner Riding. -By Jason Douglas, Dow Jones Newswires; 44-20-7842-9272; jason.douglas@dowjones.com (END) Dow Jones Newswires July 22, 2010 08:42 ET (12:42 GMT)