|Yes. GS reiterates that the FDP on Njord Future Project will be submitted 'this month', which effectively means next week. They are issuing contracts, here's an OffshoreEnergy link from last Friday:
|The Njord Future project is a life time extension, reinforcement and renovation project. We have been able to recover more of the reserves than originally expected, and following new discoveries and the Snilehorn development, field production will continue beyond 2030. The commercial basis for the Njord A renovation still requires production from Njord and Hyme, where we have identified 177 million barrels of oil equivalent (boe) remaining to be produced. Scheduled for tie-in to Njord, the Snilehorn discovery contains 66 million barrels. These two fields combined will provide more recoverable resources than the Gina Krog field, which is currently under development on the Norwegian continental shelf. In addition to this the partnership of PL586 has decided that subsea tie back to Njord is the preferred development solution for the Pil & Bue discoveries in the Norwegian Sea. Total resource estimate: 90-200 Mboe. To enable Njord A to receive these resources, the hull must first of all be reinforced. Extensive renovation on board the platform will also be made. Production from Njord is scheduled to be resumed in 2020.
Assuming a bit of slippage in all this, resumption of production from Njord is some way off.|
|Gas hedges are fine (92% hedged this year) but only 32% of oil is. There is a direct comment in the Hedging paragraph: "The Company continues to monitor the commodity market and aims to extend the current hedging programme ..." etc
I also jotted down these:
"Faroe's internal resources [were] further strengthened by the addition last year of a number of experienced key members of the DONG operating team"
"exploration costs which were written off during the year related to P218 (Perth), PL611 (Kvalross), PL753 (Zircon), PL660 (Blackmore), 14/1-3 (Celtic Sea Licences), PL794 (Rosapenna) and PL792 (Slynge) along with other exploration costs on a number of licences."
Slynge and Rosapenna are disappointing, both in the Greater Njord - Pil and Bue - Portrush blocks. I suppose Portrush may go too, when Shell get around to it.
Early guidance on 2017 production is encouraging:
"During the first months of 2017 production has performed above expectation at approximately 15,200 boepd (from 1 January to 14 March 2017); average production in March 2017 (from 1 to 14 March) was approximately 16,100 boepd. Trym is producing unconstrained and the risk of being curtailed by the Harald host facilities appears to have been reduced. On this basis, we have narrowed the 2017 production guidance to 13,000-15,000 boepd (previously 12,000-15,000), split approximately 60% liquids and 40% gas. "|
|I read the results before coming here and the surprise for me too was the farm out to Nexen. I guess we've all become pretty familiar with Faroe over the years.
Just like the good old days - a minnow explorer getting hold of a promising licence and persuading a "big 'un" to cover an optional first exploration well. Frontier drilling at nil cost is ok by me.
They are strongly preparing the market for another asset acquisition, so maybe are putting the final touches to a deal. I think it will be UK sector (to use tax losses), mature production and they will hedge for 2 years, so that the income covers the purchase price. (They did this with Ketch and Schooner.)
Edit I'd guess Southern North Sea gas again. I sense they may be a little wary of Scottish oil.
Pleased that they plan to hedge more of their oil production. Gas hedges for this year are ok. They need to hedge more as they are making development commitments - a level of income needs to be guaranteed.
Overall, does seem to be going places in terms of the planned big step-up in production. A good time for Delek to buy the other 87%? If it is to buy (and there's no certainty), it would be sensible to move before Brasse, Njord and Pil come into production.|
|#8033 Yes, that is new (to me, anyway), that they have interested Nexen (CNOOC) in farming the Irish Licence. Not many farm-ins being announced since the oil price crash. Very cautious, only keeping 20%.|
|In July 2016, Faroe was awarded Licensing Option 16/23 (Faroe 100% and operator), in the Slyne/Erris Basin in Ireland, approximately 15 kilometres east of the producing Corrib gas field (operated by Shell), which came on-stream at the end of 2015. The Company sees considerable exploration potential in this licence option and has recently executed a farm-out agreement with Nexen. Under the terms of the farm-out agreement, upon completion which is also subject to regulatory consent, Nexen will take over operatorship of this licence and an 80% working interest (Faroe 20%) and in return will meet the full costs of the associated work programme including any acquisition of seismic data and the drilling of an exploration well.
This is new isn't it?|
|Results are out but I can't open the RNS on investegate. This link on FPM website seems to work:
|Yes quite a few disappointments for long term holders! Also some successes of course but lately the appraisals on those (Butch and Pil) have not met best hopes. Perhaps Brasse will be the one!|
|Rogerlin,Did you have to bring up Lagavulin? Its taken years of therapy to get over that one...|
|That was the third failure in the Barents, I had forgotten Darwin (April 2013).|
|Wbodger, got some on the order book early on at 88 and some through a different, bog standard, online broker @ 88.688, so there certainly seemed reasonable opportunity to pick them up there and thereabouts. The trader in me, a fairly suppressed beast normally, is shouting at me that I should sell them on and take a reasonable profit for a few minutes work! I thought they looked a tad oversold but I hadn't quite expected this sort of reaction to a dry well-I guess it must have been "in the price".|
|This is becoming a different paradigm. There is still a big overhang of unconventional oil supply which may keep the oil price in this range for years, and that means the Barents will be marginal until such time as an elephant find is made and everyone charges back up there. It won't be Bone, though.
(My goodness, CWA, when did you get them for 88 pence?)|
|Ed 123 thanks for your cheering assessment and for the reminder about Delek, yes they must have done the calculations and I don't think there was much in Faroe's price for Bone anyway.|
|Pity about the Barents', great hopes but Faroe will not now likely return there after these failures. Nor West of Shetland if you think back to the ghastly Lagavulin and North Uist. Have to stick to the Norwegian North Sea and Norwegian Sea which may the best policy anyway as some here have often suggested.|
|Yes, the expected result.
Rogerlin. Regarding the 78% Norwegian tax charge, I've played with Faroe's numbers and, with the development projects they already have and oil at $50/bbl, I think the shareprice can comfortably reach 200p when Brasse and Pil are flowing.
Also, Delek will have done their calculations before buying their 13% at a price not much below today's. Maybe Delek will want to merge Faroe and Ithaca before the next step up in Faroe's production?
Just my own thoughts, no advice intended, but I'm content to keep my Faroe holding.|
|rogrlin, I certainly hope so! I've just had a handful at 88p, the first time I've bought any FPM for a very, very long time. Just a small amount though. Hope springs eternal and all that!|
The trouble with Faroe becoming more of a production company is that the tax on production is very heavy. Without the exploration tax rebate I doubt that anyone except the Norwegian state or quasi state entities would bother exploring. Faroe's production progress is excellent, but will any of this percolate down to the shareholders?|
|All academic, bone dry, RNS out.
If ever a duster was welcome ... can we please go back to sensible exploration, now. How about an announcement that Faroe will stick to mature basins? Just the idea of the KL Sandefjord chugging a round trip of 2000 sea miles just to move the rig shows how impractical it was.|
|Not sure that was a well kept secret, though many oilers fell yesterday.|
|I don't think we're far apart, although I think my figure for Faroe's cost of Bone was on the high side, I was thinking they had 50% rather than 20%. Without the admirable Norwegian policy of encouraging explo via tax rebates, Faroe wouldn't be considering drilling the likes of Bone (hopefully!)|
|I know what you mean but I doubt that Faroe (because of its small size) could progress/hang onto its 20% of something very big. Sell down or out? Yes, but I suspect potential buyers would be in the 'boss seat', knowing that Faroe could not afford the full cost of its share of development.
The fall in the oil price messed up the business models of the specialist explorers. Eg. Faroe had wanted to sell its 15% of the Butch discovery (I think) but became a somewhat reluctant developer when the oil price plunged.
I hold Faroe and my heart would love a big result at Bone followed by a sale. However, my head says that getting quick, high value barrels out of Brasse will do more for the value of my shareholding than rolling a double six at Bone.|
|I've not seen the figures, but assume Bone is costing Faroe $3-4 mill (after tax) to drill & the potential is several hundred mmbbls...... top end result at Bone could be pretty useful.|