Faroe Petroleum Plc Regulatory News (FPM)

6 Sep 2006 10:48

Faroe Petroleum PLC06 September 2006 6 September 2006 Faroe Petroleum PLC ("Faroe Petroleum", "Faroe" or "the Company ") Formation of Strategic Joint Venture for UK North Sea Faroe Petroleum, the independent oil and gas company focusing on creatingshareholder value through its portfolio of exploration, appraisal andundeveloped field opportunities in the Atlantic Margin, North Sea and Norway ispleased to announce that it has formed an exclusive strategic joint venture witha UK subsidiary of Liberty Energy Holdings, LLC ("LEH"), which is a subsidiaryof Liberty Mutual Group ("LMG"), to consider and, potentially, acquire andexploit proven undeveloped discoveries in the UK North Sea. LEH has anestablished track record of investment in upstream oil and gas assets in NorthAmerica, and through this joint venture intends to expand its operations to theUK North Sea. Boston-based LMG is a leading global insurer and as of 31 December 2005, had $79billion in consolidated assets, $70 billion in consolidated liabilities and $21billion in annual consolidated revenue. The joint venture will have access to considerable funds to invest in thisimportant activity. Faroe Petroleum will play a lead role in bringing suitableopportunities to the joint venture. LEH will initially invest the majority ofthe joint venture's capital requirements in acquiring any such opportunities.The investment model allows for Faroe to participate with no less than 20%participation in any selected investment opportunities, and with an entitlementto increase its participation to 50% through a pre-agreed option arrangementwith LEH. This innovative new joint venture potentially gives Faroe a significantadvantage, in its pursuit of the following key objectives: • To pursue more, larger appraisal/development opportunities than might be possible alone, due to the strong financing arrangements in place with LEH, which should significantly mitigate perceived completion risk for asset vendors; • To have the ability to secure a material stake in licences without an immediate need to raise capital; and • To diversify the risk profile of our now substantial exploration and appraisal portfolio, and to add shareholder value in the near term. Graham Stewart, chief executive of Faroe Petroleum said: "In the face of increasing competition for attractive lower risk projects, thisjoint venture represents a very exciting opportunity for Faroe to acceleratevalue creation in the North Sea. We have designed this new business model togive us an edge in acquiring substantial interests in appraisal and developmentproperties in the UK North Sea, and are delighted to have attracted such astrong and reputable corporation as major co-venturer. We are alreadyconsidering a number of opportunities together, and look forward to reportingprogress in the near term." Ends For further information, call: Graham Stewart, Faroe Petroleum plc 01224 652 810Billy Clegg/Edward Westropp, Financial Dynamics 020 7831 3113 Notes to Editors About Faroe Petroleum Faroe Petroleum is an independent oil and gas company focused on value creationthrough exploration and appraisal drilling in the Atlantic Margin (Faroe Islandsand UK West of Shetlands), North Sea and Norway. The Company is actively building a balanced portfolio of operated andnon-operated exploration and appraisal properties, with significant stakes andan active programme. Faroe Petroleum has through successive licence applicationsand acquisitions built a substantial portfolio of exploration and appraisalassets in both the Atlantic Margin and the UK North Sea. The 22 licenceportfolio provides considerable spread of risk and reward, encompasses sixlicences West of Shetlands, five licences offshore the Faroe Islands, fourlicences in the Moray Firth area of the UK Central North Sea and seven licencesin the Southern gas basin. The Company operates four of its Atlantic Marginlicences and three of its North Sea licences. Faroe Petroleum is in partnershipwith BP, Chevron, DONG, Eni, OMV, Shell, Statoil, E.ON Ruhrgas, GDF, RWE andDSM, all of which have an outstanding track record in oil and gas explorationand development. Faroe Petroleum is listed on the Alternative Investment Market of the LondonStock Exchange and has its headquarters in Aberdeen, UK. The company recentlyenhanced its capability through the establishment of a new Norway based team inStavanger, designed to capitalize on the significant opportunities in thatregion. Faroe Petroleum has a highly experienced team of professionals focusedon creating exceptional value for its shareholders About Liberty Mutual Group (LMG) Boston-based Liberty Mutual Group (LMG) is a leading global insurer and sixthlargest property and casualty insurer in the U.S. based on 2005 direct writtenpremium. As of December 31, 2005, LMG had $78.824 billion in consolidatedassets, $69.966 billion in consolidated liabilities and $21.161 billion inannual consolidated revenue. The Company ranks 102nd on the Fortune 500 list oflargest corporations in the United States based on 2005 revenue. LMG offers a wide range of insurance products and services, including personalautomobile, homeowners, workers compensation, commercial multiple peril,commercial automobile, general liability, global specialty, group disability,assumed reinsurance, fire and surety. LMG (www.libertymutual.com) employs over 39,000 people in more than 900 officesthroughout the world. This information is provided by RNS The company news service from the London Stock Exchange