Notification of Director's interests

25 July 2013

Faroe Petroleum plc

("Faroe Petroleum" or the "Company")

Notification of Director's interests

Faroe Petroleum Incentive Plan ("FPIP")

Following the approval of FPIP at the 2013 Annual General Meeting on 27 June 2013, the Remuneration Committee of the Company has approved the grants of nil-cost options ("Nil-Cost Options") over ordinary shares of 10p each in the Company ("Ordinary Shares") to Directors on 24 July 2013 as detailed below:

FPIP Annual Awards

The actual number of Nil-Cost Options which the recipients could receive under the FPIP ranges from zero to 150%subject to the achievement of the performance targets. For the purposes of disclosure and maintenance of certain statutory records, the number of Nil-Cost Options is taken to be 100% the number of Nil-Cost Options awarded, as detailed above.

Performance will be measured at the end of a three year performance period against three equally weighted performance conditions, namely 1/3rd absolute Total Shareholder Return ("TSR"), 1/3rd relative TSR and 1/3rd a measurement of (in per share terms) reserves replacement and resources growth targets. Awards granted to the recipients will be required to be held for an additional two year holding period after the three year performance period before they vest.

Additional key terms of and background to the FPIP are detailed in the Company's Notice of the 2013 Annual General Meeting, available online at the Company's website www.faroe-petroleum.com.

Option Exchange

The existing share option awards granted to the Directors have been exchanged in full into a smaller number of additional Nil-Cost Options under the FPIP (the "Option Exchange"). The Nil-Cost Options retain existing share price growth targets, set by reference to the share price on the original date of grant, where applicable (i.e. where outstanding option awards are unvested) and all Nil-Cost Options awards will feature new holding periods to ensure that there is no transfer of value and that the recipients are appropriately retained:

Co-Investment Plan

It was announced on 23 July 2013 that the Directors had bought a total of 26,169 Ordinary Shares in the Company.

These share purchases are being treated as 'Investment Shares' under the Faroe Petroleum plc Co-Investment Plan (the "CIP") and as a consequence the Remuneration Committee has made the following conditional Matching Share awards at a price per share of £1.105 being the closing mid-market price on 23 July 2013:

The CIP provides for the Remuneration Committee to allocate three Matching Shares, subject to certain performance targets, for every Investment Share that would have been purchased if the gross pre-tax salary had been invested in Ordinary Shares.

The release of the Matching Share awards is subject to performance targets and the continued employment and retention by the participant of the Investment Shares for three years from the date of grant.

Total Holdings

Following these transactions the Directors hold the following Ordinary Shares together with options over the same (including Matching Shares) exercisable at various prices up to 186.25 pence, as follows:

Graham Stewart also holds an option to acquire 84,547 Ordinary Shares under a Long Term Incentive Plan exercisable at the nominal price of 10 pence per Ordinary Share.

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