Faroe Petroleum Plc Regulatory News (FPM)

20 Nov 2006 07:02

Faroe Petroleum PLC20 November 2006 20 November 2006 Faroe Petroleum plc ("Faroe Petroleum", "Faroe" or the "Company") Minke Main Gas Field Well Commences Faroe Petroleum, the independent oil and gas company focusing on exploration,appraisal and undeveloped field opportunities in the Atlantic Margin, North Seaand Norway, is pleased to announce that the Minke Main well was spudded onThursday 16th November by the drilling rig Noble Ronald Hoope and has run & setthe conductor over the weekend. Operated by GDF Britain Ltd (Faroe interest5.89%), the well is estimated to take around 100 days to drill and complete,including a pilot hole to appraise the geological formations on the west of theMinke field. The development plan for Minke Main is for a single sub-sea well, tied back tothe existing D15 platform facilities located offshore Holland, and operated byGDF Production Nederland B.V., with first gas expected to be produced in thefirst half of 2007. Net reserves attributable to Faroe Petroleum in respect ofMinke Main are estimated to be 2.45 billion cubic feet of gas. Grossdevelopment costs for Minke Main are estimated at £45 million with a net cost toFaroe of £2.65 million over two years. Minke Main is one of three undeveloped gas field discoveries, recently acquiredby Faroe Petroleum from ConocoPhillips as a package of licence interests. Theother two undeveloped assets in the package are the nearby Minke Graben and Orcagas fields upon which development decisions are anticipated in 2007. The MinkeGraben and Orca gas fields offer considerable additional reserve potential andvalue to Faroe Petroleum as and when decisions are taken to proceed with theirdevelopment. The assets are situated in UK Blocks 44/24a,29b and 30 (Faroe's interest 5.89%),approximately 25 kilometres east of the producing Caister-Murdoch gas fields and13 kilometres south west of the GDF Production Nederland B.V. operated D15platform in the Dutch sector. In addition, there is the potential for theundeveloped fields to extend over the UK border into Dutch waters with thepossibility of additional reserves within Dutch Block D15b (Faroe 5%).Attractive exploration potential exists across the blocks, including nearbyDutch Block D18a (Faroe 2.5%). Field partners in the UK are the Europeanutility companies E.ON Ruhrgas (42.67%), RWE Dea (35.84%), GDF Britain Ltd(15.6% and Operator). Faroe Petroleum's 11 licence North Sea oil and gas portfolio is designed tocomplement the Company's significant 11 licence Atlantic Margin portfolio, byfocusing on opportunities close to existing production infrastructure, withpotential to generate early cash flow. Graham Stewart, Chief Executive of Faroe Petroleum, commented: "I am delighted that Faroe Petroleum is now participating in this well. Thisexciting project, commencing less than three months after acquisition, is thefirst of three expected gas field developments in our North Sea portfolio.Minke Main will provide Faroe Petroleum with greater tax efficiencies and cashflow to better support our exploration and appraisal strategy focused on theAtlantic Margin, the North Sea and Norway. With first gas from Minke Mainanticipated for first half 2007, we look forward to the beginning of an excitingnew growth phase for our Company." Ends Enquiries: Faroe Petroleum plcGraham StewartTel: 01224 652 810gstewart@faroe-petroleum.com Financial DynamicsBilly Clegg/Edward WestroppTel: 0207 269 7157billy.clegg@fd.com Note David Ramsay, who is a Petroleum Engineer (MEng degree in Petroleum Engineeringfrom Heriot-Watt university (1991)), Asset Manager at Faroe Petroleum and whohas been involved in the energy industry for more than 18 years, has read andapproved the technical disclosure in this regulatory announcement. This information is provided by RNS The company news service from the London Stock Exchange