Faroe Petroleum Share Discussion Threads

[ed 123] 03/2/2016 12:26

Thanks, ohisay. Very kind of you. :-)

[ohisay] 03/2/2016 03:46

RBC yesterday.

Faroe Petroleum (AIM: FPM; Outperform, Speculative Risk, 140p Price Target)

On Thursday 4th February we expect Faroe to publish an operational update that includes estimates of production levels and planned expenditure for 2016.
In FY15 the company budgeted on producing 9,500-10,500boe/d and spending £100m; we forecast that it produced 10,200boe/d and spent £94m; we forecast that the company ended 2015 with cash-in-hand of ~£100m, which equates to net cash of £80m (excluding its EFF). In FY16 we anticipate that production could fall to 8,500boe/d, as production from Njord and Hyme is shut in from Q2/16; capital spending is likely to fall towards ~£60m as exploration activity is reined in and spending on Njord and Butch is yet to pick up. Management may also highlight initiatives to reduce FY15 opex from its earlier $25-28/boe guidance.
Separately, we would note that Faroe had hedged 70% of 2016 and 50% of its 2017 gas production (on a post-tax basis) at 45-50p/therm; it had also hedged ~33% of its Q1/16 oil production (on a post-tax basis) at $60/bbl+.
In the Barents Sea, offshore Norway, Faroe is drilling the Kvalross exploration well on PL611 (FPM 40%). The Wintershall-operated well is targeting two independent targets: the (MidLate Triassic Snadd Formation) Kvaltann oil prospect and the underlying (Lower Triassic Klappmyss Formation) Kvalross gas and oil (mega) prospect. Combined, the stacked objected could hold 100-1,170mmboe. The 60-day well, which is being drilled by the Transocean Arctic, spud on 12th January and should conclude in March.
RBC will be hosting Faroe management at its 3rd February Winter Lunch in London

PS.Can't help observing that opex number is exactly the same as Enquest's ! (albeit of course ENQ's net debt is 1.5bn$ cf FPM's net cash of ~115m$ which is ahem slightly material)

[rogerlin] 01/2/2016 08:45

Marine traffic is no help with following Kvalross. Indeed this morning it says that the Transocean Arctic is in West Africa. Is the Barent's out of range or is it something to do with military secrecy?

[rogerlin] 27/1/2016 08:17

I now see that Value Viper (post 7423) already gave the Macquarie target as 80p which is a bit disappointing compared with 900 but perhaps more reasonable!

[whackford] 26/1/2016 09:37

Roger - since Mark Robinson is author I think we can conclude 968 is indeed a typo. It caught my eye too!

[rogerlin] 26/1/2016 09:18

OMV currently drilling another appraisal in Wisting area, 7324/7-3S, Transocean Spitzbergen, spudded 15.1.16, to the north of Kvalross.

[jumbo66] 25/1/2016 13:23

hows it cheap company this imho i hold dyor re jumbo [hd]:-]]]

[rogerlin] 24/1/2016 20:33

An item under Directors' dealings in this week's Investors Chronicle.

"With oil prices under the cosh, it would take a brave investor to dip their toe in the water at the moment. But a trio of insiders from Faroe Petroleum (FPM), including chief executive Graham Stewart, have done just that. The directors have forked out just under £136,000 in aggregate for 254,791 shares in the North Sea driller, although the subsequent share price performance underlines the fragility of valuations within the sector.

The company is moving ahead with drilling at the Kvalross exploration well in the Barents sea and has two further wells in the Norwegian Sea in the schedule. The company has just been awarded six exploration licences in offshore Norway via the country's 2015 APA (awards in pre-defined areas) licence round. In light of market conditions, Faroe and its exploration partners have not made any firm commitments, but Faroe continues to benefit from generous rebates under Norway's tax system, so it is poised to move quickly when markets dictate.

Faroe has just been upgraded by analysts at Canaccord Genuity to a "buy" rating, while Macquarie Research initiated coverage in December, ascribing an "outperform" rating and a fair value estimate of 968p a share using a 9 per cent discount rate in Norway. Buy at 46p. MR."

This by Mark Robinson and Theron Mohamed. Sounds good, although I wonder if 968p is a typo?

[ed 123] 22/1/2016 21:37

Ta. And Brent crude carried on rising after the UK close. Finished up another half dollar in the USA, at $32/bbl. 9% rise in one day!

[value viper] 22/1/2016 21:34

Macquarie 80p outperform target today

[ed 123] 22/1/2016 16:21

I wonder if it's an intra-sector rotation? Sell Faroe, buy the likes of Ithaca. That's ok if the oil price has bottomed, but if not ....

For those who bought some Faroe today, I'd guess you'll be ok eventually. Need patience till the time those industry-wide spending cuts result in falling global production and a rise in the price of oil.

[ohisay] 22/1/2016 13:42

Its very odd - I bought some this morning thinking it a shoe in (I actually bought 4 E/P's 3 of which are up )
I assume there is a seller around - what other reason could there be?.

Because If you like the metrics this has a PE of 6 according to RBC.And of course EV to earnings would be even better.
There's really no fundamental reason for this price.

[harry rags] 22/1/2016 11:58

Very surprised, no debt, free cash, hedged oil, plenty licences, directors buying shares, 10,000 bopd, personally I thought this would tank IMHO

[ed 123] 22/1/2016 11:24

Faroe's not joining the party this morning. Any thoughts?

Might be that Faroe's survival was never in doubt, so fell less than the indebted e&ps? Hence less attractive as a recovery punt?

Having said that, Soco (no debt) is up 9% this morning.

[rogerlin] 22/1/2016 08:30

"and the Kvaltann prospect which has additional oil potential within a Mid-Late Triassic Snadd Formation channel".

Snadd, ringed seal, a feast of wildlife in this well.

[rogerlin] 20/1/2016 09:09

This has a link to a chunky VNG document about possibilities for development of Pil, but sadly, for me at least, it is in Norwegian.

[wbodger] 20/1/2016 08:59

Faroe RNS out, about the awards.

(I thought I should cover my previous post with a pointer to the Company communication).

Interesting that the D-or-D on PL644(Aerosmith) extension is now 2017, so it is not imminent.

Re #7415, rogerlin, disappointing for all concerned. Pil has gradually become less prominent in GS's summary of Faroe's active interests.

[rogerlin] 20/1/2016 08:40

Thanks for that informative summary Wbodger.



And Lorry is dry.

[wbodger] 19/1/2016 21:01

FPM will be Operator in PL825 which looks to be west of Oseberg East, and northwest of Brage. Somewhere between Oseberg condensate field and Oseberg East-Veslefrikk oilfields.

The other Operatorship is PL810 in the South of the NNS, southwest of Butch.

Both of these are in areas where Faroe are committed to increasing production (Brage) or development (Butch)

There are four awards of JVs led by others:
- PL811, Centrica, Northwest of Butch. FPM have relinquished nearby licences like Percy. (They used to have a lot near Butch.)
- PL836, Wintershall (the original Maria JV), somewhere between Kristin and Maria
- PL845, Conoco-Phillips, Northeast part of the Haltenbank
- PL644B, OMV, extension of PL644, Aerosmith, west of Fogelberg. Is this going to be drilled?

Faroe's share is 20%, except where they are Operator.

When NPD updates the Interactive Map we might be able to see PL845, which looks large, across four adjacent sectors, but has no very close neighbours.

[rogerlin] 19/1/2016 16:00

Good spot Scaff55. That makes Point the largest holder in Pil.

There are some new licence awards.



Link from there to the list of awards which I think gives Faroe stakes in PL644, 810, 811 and 825 but no doubt they will issue a statement in due course.

[scaff55] 18/1/2016 17:36

Old Rocksource +

[rogerlin] 18/1/2016 17:03

KL Sandefjord close to the II now too and so the Lorry drill seems to be over.

[rogerlin] 18/1/2016 08:34

The tug Normand Prosper seems to be setting out for the Island Innovator, although surely more than one will be needed.

[wbodger] 15/1/2016 10:11

Offshore Energy echo your comment about Lundin silence, rogerlin. Last paragraph of this:
hxxp://www.offshoreenergytoday.com/statoil-buys-539m-worth-of-lundin-petroleum-shares/

This one doesn't surprise me. I thought it was a good fit. It will be a blocking stake for Statoil for the time being.

[rogerlin] 15/1/2016 09:09

Strange that there is no announcement from Lundin about that, or (so far) about Lorry for that matter. They are normally very prompt with announcements.