Acquisition

9 Feb 2005 07:00

Faroe Petroleum PLC09 February 2005 9 February 2005 Faroe Petroleum plc ("Faroe Petroleum", "Faroe" or the "Company") Faroe Petroleum Makes First Move into North Sea in Transaction with Shell and Esso Faroe Petroleum is pleased to announce the acquisition of a 90% equity stake intwo part blocks 14/21 and 14/22 in the UK Central North Sea from Shell U.K.Limited and Esso Exploration and Production UK Limited. The blocks extend over217 square kilometres and are located in 140 metres of water on the HalibutHorst, equidistant from the Claymore and Blake oil fields. This is a highlyprospective, yet un-drilled area well known for hydrocarbon seeps, at the edgeof the Witch Ground Graben, which contains several billion barrels of reservescurrently on production, including the giant Piper and Claymore oil fields. The Licence area contains several attractive large structures with significantpotential. With shallow reservoir depths of under 2,000 metres, any drilling isexpected to be relatively low cost. If drilling proves successful there is goodscope for early and low cost development due to the close proximity of existingprocessing and export infrastructure. Shell will remain an equity partner in the Licence at 10%, and will continue asOperator pending transfer of operatorship to Faroe Petroleum in due course. The Licence work programme involves the purchase of high technology 3D seismicfrom PGS's Quad 14-99 MC 3D Mega Survey, which will be re-processed to define adrilling location. Graham Stewart, Chief Executive of Faroe Petroleum, commented: "This transaction, which is Faroe Petroleum's first in the North Sea, is in linewith the Company's stated strategy of enhancing portfolio diversity and valuepotential, and further reducing its overall risk profile. Faroe Petroleum'sNorth Sea strategy focuses on opportunities close to existing productioninfrastructure, with potential to be quickly converted into cash flow, therebycomplementing the Company's now significant Atlantic Margin portfolio. " Ends Enquiries: Faroe Petroleum plcGraham StewartTel: 01224 652 810 Financial DynamicsJonathon Brill / Billy Clegg / Caroline StewartTel: 0207 831 3113 This information is provided by RNS The company news service from the London Stock Exchange