Faroe Petroleum Share Discussion Threads

[rogerlin] 16/6/2016 19:26

I was trying to look up the recent infill well on Brage that Faroe referred to in their description of Brasse, but, impressively, the website has already been updated.

The two latest drills on Brage (2015-16) were 31/4-A-18C and 31/4-A-7B and they seem to be up near the original discovery well. I think the most southerly well is 31/4-6 which is an old well and was an oil discovery of sorts. There is still the newer area PL185 (undrilled so far although Brage is drawn as extending into it) before you reach PL740 and Brasse.

Could there be oil all the way from Brasse to Brage?

[wbodger] 16/6/2016 10:32

believed to be analogous to the effective reservoir at the Brage producing oil field ... that's the important bit, imo. Brage has been producing well following Wintershall's in-fill wells, and they are planning more in-fill drilling in 2017.

I don't think they were expecting a big P50 number with this wildcat but the licence itself extends a good way east and south of 31/7-1. This looks like an in-line result, and a relief for FPM's exploration team after a few disappointments.

There hasn't been any other drilling in 31/7, so the potential looks interesting. Statoil/Detnor have a campaign to the southwest of Oseberg using Songa Delta, and all in depth of water suitable for unmanned tie-backs.

I can understand why the market might be unimpressed, but you can see GS thinks this is a good result.

[jasper2712] 16/6/2016 09:41

The market has been made well aware of the Nyord A shutdown so I cannot see that causing the share drop in the last few weeks.


"Following excellent performance in 2015, production from the Njord and Hyme fields (Faroe 7.5%) will be temporarily suspended from the end of May 2016 after which the Njord A and B facilities are planned to be towed to shore to prepare the facilities for life extension - the Njord Future Project."

[ed 123] 16/6/2016 09:26

Looks like the recent drop was from those who knew the exact timing of the shutdown of NjordA. Don't you just love the insider traders? :-/

Re: the discovery, it's possible that the Brasse reservoir might connect to the corresponding one in Brage? Faroe will have data from the last, southern well on Brage to compare with the new Brasse well data.

Pre-drill target volume for Brasse was 14 to 33 mmboe.

Should be relatively cheap to hook up to Brage or straight to Oseberg. Brage is well into decline and extra volume would be very welcome, potentially extending the life of the facility.

Shouldn't run away with too much hope. Side track result needs to be good too.

[taudelta1] 16/6/2016 07:50

the sidetrack will be revealing ... meanwhile 18m of gas and 21m of oil sounds promising to me ..

[itsriskythat] 16/6/2016 07:33

No information seemingly available on the P50 for Brasse?

[cwa1] 16/6/2016 07:22

16 June 2016

Faroe Petroleum plc

("Faroe", "Faroe Petroleum", the "Company")

Oil and Gas Discovery at the Brasse Exploration Well and Njord Facility Update

Faroe Petroleum, the independent oil and gas company focusing principally on exploration, appraisal, development and production opportunities in Norway and the UK, is pleased to announce an oil and gas discovery in the Faroe-operated Brasse exploration well in licence PL740 in the Norwegian North Sea (Faroe 50%).

Oil and gas discovery at the Brasse exploration well

The Brasse well (31/7-1) has been drilled to a total depth of 2,780 metres. The well encountered approximately 18 metres of gross gas-bearing and approximately 21 metres of gross oil-bearing Jurassic reservoir which is believed to be analogous to the effective reservoir at the Brage producing oil field (Faroe 14.3%), located approximately 13 kilometres to the north of Brasse. Preliminary results based on extensive coring, wireline logs and pressure data show that the well has encountered oil and gas in reservoir sandstones of good quality. The presence of oil and gas has been confirmed subsequently by fluid sampling.

The partnership has now decided to drill a sidetrack to help confirm both the reservoir distribution and hydrocarbon contacts. A further announcement will be made at the completion of drilling activities. The co-venturer in the PL740 licence is Point Resources AS (50%).

Njord Facility Update

In line with previous guidance, production from the Njord and Hyme fields (Faroe 7.5%) has been suspended, and the Njord A platform will be towed to shore for refurbishment and modification.

Graham Stewart, Chief Executive of Faroe Petroleum, commented:

"We are very pleased to announce the oil and gas discovery at the Brasse prospect and await the results of the sidetrack. This discovery in one of our core areas, builds on Faroe's already significant position in the Norwegian North Sea via a low cost exploration well. If the Brasse drilling results prove a commercial discovery, it could be tied-back to the Brage production facilities or alternatively to other nearby installations. Once there is further information in relation to results from the sidetrack well we will update the market."

- Ends -

[ed 123] 15/6/2016 13:38

Ta, Wbodger. :-)

I don't like the recent fall. Down another 7.5% (at 60p) today, against a sector that looks broadly level. I hope the directors are not planning a binge buy. Another big private placing coming?

[ed 123] 14/6/2016 14:39

Norwegian government approves the Oseberg Vestflanken2 development.



In the context of NjordA, the interesting thing for me is the stated reduction of 30% in the break-even price. Unfortunately, I don't know what the previous break-even price was.

Does anyone know what oil price is or was needed at OV2 for breakeven?

The scale of OV2 is very roughly (smaller oil reserves but needs more development drilling?) similar to NjordA. It might give a clue as to the break-even oil price for NjordA?

Good to be holding a share that should be unaffected by Brexit, if it happens. Actually, Faroe's earnings in Sterling terms might rise. Brexit worth a couple of pence onto Faroe's share price? ..... But, most likely, it'll head down with everything else!

[taudelta1] 13/6/2016 11:25

Does anyone have a feel for why share price is drifting? (seems to be more than POO-related, judging by comparison with other oily SPs, and ICE UK gas price has been firm of late, off the back of firming Henry Hub)

[rogerlin] 13/6/2016 08:35

Although they do in general seem to be speeding up. Statoil just (09.06.16) announced the result of 30/11-13 which was only started around 30.05.16 after the previous 30/11-12S. The 30/11-13 doesn't seem to have been a sidetrack and was drilled to 3313 metres. That is unusually fast for Norway.

[ed 123] 12/6/2016 17:13

Ta, Rogerlin. :-)

[rogerlin] 12/6/2016 07:51

It is "Transocean Arctic" that drilling the well. The operations are scheduled to last 31 days the dry well, and a maximum of 57 days at the findings, including logging, core samples and possible sidetrack.

(Spudded 24.05.16)

[ed 123] 10/6/2016 16:58

Hi Wbodger.

Yes, VNG or anyone and the sooner the better for me.

Re: buying more production, Faroe need to be careful as they appear to be entering the development game with Butch. Centrica could love to 'steal' 15% of Butch, so Faroe must stump up, as when expenditure comes along. Faroe's £100M or so is more than enough to pay their share of Butch, but it reduces the amount available for buying immediate production. Faroe may dip into its reserve base lending facility?

When are we due the Brasse result? A good outcome there could be brought online before Njord A returns, and it would be low cost production.

If I were in charge of Faroe, Brasse and similar would be the only exploration drilling. Finding oil in new areas is too expensive for Faroe to develop and the free-ride development partnerships of yesteryear are no longer on offer.

Management here are professional oil people; my interest lies in making money. I do not feel we are fully aligned.

[wbodger] 10/6/2016 11:02

Ed, I have always thought VNG would be smart to grab Faroe, because they won't get a better entry into the Norwegian shelf. The trouble is, Pil was not the company-maker we all hoped, and VNG made the running on it. (Faroe always seemed more cautious.) Logically, if VNG bought out Dana's 18% of FPM it would give them a blocking stake and perhaps allow Faroe to move on.

If no-one comes in for Faroe the price will suffer as people drift away to more dynamic opportunities in the post-op recovery ward.

Unfortunately I will not be going to the AGM, (travelling) otherwise I would like to ask GS if Faroe had a look at the Anasuria assets that Shell sold to the Chinese. Shell are still keen to divest other North Sea assets, and there should be some tail-end production available reasonably, to cover the dip in Norway production next year.

[ed 123] 10/6/2016 08:52

Ta, rogerlin. :-)

Shame that KNOC is so weak. I would welcome a takeover of Faroe.

I think Faroe has missed the boat if it had been hoping to buy more cheap production. The rise in the oil price above $50/bbl has raised the valuation expectation of sellers. The pressure on sellers has eased.

Reference, exploration in Irish waters, it didn't do the shareholders of Providence Resources any good, despite their success in 2C number terms. They've not been able to sign up a partner to take on the development and they don't have the cash to do it themselves. Providence's 2C valuation is about $0.08 per barrel. Why would anyone want to explore there? ... to keep the business working, to justify the salaries and fees? What would be in it for the shareholders?

Anyone going to the agm? 28th June.

[rogerlin] 06/6/2016 17:45

The Padraig basin is so remote it made me think of Iceland but I now see Faroe dropped that some time ago. The Slyne Trough includes Corrib and that is where Serica has acreage and they have been trying to farm that out for years without success. I think the targets are gas/condensate and if they are too far away to tie in to Corrib then how are they to be brought to shore? I can see some logic in the Celtic sea because it's shallow with some existing infrastructure. A small company like Faroe might possibly be able to drill there as operator but surely not in the Porcupine, without the Norwegian exploration tax rebate.

[jusmasel99] 06/6/2016 09:11

There were in total about 430 blocks on offer. The South Porcupine seems to be of most interest to the Majors and Super Majors. The Padraig basin is miles to the North West of the Porcupine and the Slyne Trough is closer to shore (with adjoining hydrocarbon discovery I believe). Petrel also confirmed their licence award was in the Porcupine but in the northern portion.

I think you can also conclude from number of licences awarded against number of applicants that there was competition for the southern porcupine and some applicants didn't get anything.

If FPM wanted to gain more exposure to the Porcupine then EOG is offering a farm out to all their licences.

[rogerlin] 06/6/2016 08:52

Europa refers to licences in the Porcupine, Padraig Basin and Slyne Trough so not all the offers are in the Porcupine but no clue where Faroe's offer is as far as I can see.

[taudelta1] 06/6/2016 08:39

hxxp://www.dcenr.gov.ie/natural-resources/en-ie/Oil-Gas-Exploration-Production/Pages/home.aspx#

Details will be posted on this Eire government site, but have not been yet ...

[wbodger] 03/6/2016 22:56

Thanks for that. It's a bit secretive, no details of where the FPM award is. The first phase of the 2015 Round was in the Porcupine Basin, but afaics this is about other applications, perhaps back in the Celtic Sea in FPM's case? Or have FPM applied for acreage in Porcupine?

From the latest Press Release "The companies awarded Licensing Options will carry out work programmes that will deepen understanding of the petroleum potential of Ireland's offshore. No drilling commitments afaics.