Faroe Petroleum Share Discussion Threads

[sludgesurfer] 15/3/2017 10:25

Rogerlin,Did you have to bring up Lagavulin? Its taken years of therapy to get over that one...

[rogerlin] 15/3/2017 09:28

That was the third failure in the Barents, I had forgotten Darwin (April 2013).

[cwa1] 15/3/2017 09:19

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".

[wbodger] 15/3/2017 09:00

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?)

[rogerlin] 15/3/2017 08:51

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.

[rogerlin] 15/3/2017 08:46

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.

[ed 123] 15/3/2017 08:40

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.

[cwa1] 15/3/2017 08:18

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!

[rogerlin] 15/3/2017 08:07

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?

[wbodger] 15/3/2017 07:31

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.

[thegreatgeraldo] 15/3/2017 01:08

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!)

[ed 123] 14/3/2017 23:58

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.

[thegreatgeraldo] 14/3/2017 23:17

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.

[ed 123] 14/3/2017 22:20

Ta, tgg. :-)

Yes, Bone is hoped to be a mirror of Castberg, on the opposite side of the basin.

For some context, Faroe acquired its interest in June 2013 when the oil price was just about $100/bbl. Would they go for a Barents licence with oil at its current $50/bbl? Maybe not? However, others (bigger oil cos) are still interested in the Barents and are applying for licences.

My own view is that Faroe is too small and has plenty on its plate without going for the more difficult/expensive frontier stuff.

I'd still prefer a top end result at Brasse to a top end result at Bone.

Thanks again. :-)

[thegreatgeraldo] 14/3/2017 21:39

Ed, before working out a dev plan, I'll wait to see if they find anything first ;-#)) AIUI, the Johan Kastberg discovery isn't too far from Bone & seems to be progressing towards sanction, despite the OP being shy of $80. As for what price commerciality in that neck of the woods, the geology would play a significant part - reservoir quality, wells needed etc. Still, not an obvious area for Faroe to get involved in a dev project.

[ed 123] 14/3/2017 20:03

Ta, tgg. :-)

If you're still there, TGG, could I be lazy and ask if you have a ballpark figure for operating cost in the Barents or minimum oil price for commerciality?

The reason I ask is that several years ago (when the oil price was around $60/bbl) I asked a senior figure in the oil industry what oil price would be needed to make a Barents discovery commercial. He said about $80/bbl.

Recently, costs have come down a lot and the technical side will have advanced too. So, does your "very significant" comment mean that a Bone discovery could be commercial at, say, $40/bbl oil?

Ta. :-)

[ed 123] 14/3/2017 20:03

Ta, Rogerlin. :-)

With the appraisal I'm hoping for a top end result, and quick hook up to Brage for plenty of high value barrels. It also means that the life of Brage itself should be extended - good for that partnership (incl. Faroe at 14%).

The exploration well is more risky of course. A nice bonus if it comes off but, remembering Boomerang, I'm not banking on it.

[thegreatgeraldo] 14/3/2017 18:41

Ed, Bone is of little importance if it's a duster. OTOH, very significant if it matches best hopes.

[rogerlin] 14/3/2017 18:38

PSV(S) WITH STBY OR PSV & STBY 1 WELL SS DEEPSEA BERGEN

This requirement now listed for Faroe for 1st June, Brasse appraisal?

[ed 123] 14/3/2017 13:27

I've looked at Faroe's recent shareprice movement compared to Tullow, Premier and Cairn. They follow roughly the same downward path. So, it appears that the recent weakness in the oil price is behind Faroe's fall. The market would appear not to have the result atm.

As we all know with exploration, Bone is likely to be a duster. Darwin was dry, Kvalross was dry. Both results came fairly quickly (eg. Kvalross 60 days including p and a). Bone is, by my reckoning, at 61 days today.

The good thing with these Norwegian exploration wells of course is the tax rebate. So, the net cost is only 22% of the gross. Also, now that Faroe has bulked up further, each exploration well is of less importance (whichever way it goes).

Fwiw, I view the Bone well as being of little importance (but thanks for the monitoring, Rogerlin :-)). For myself, the results of the two Brasse wells later this year matter more to Faroe.

[jasper2712] 14/3/2017 12:03

Probably carrying bags of cement to plug and abandon going by the share price collapse in the last 2 weeks!

[rogerlin] 14/3/2017 08:06

SKS going up the coast now, still south of Trondheim, long way to go yet and it will presumably put in to Hammerfest for a bit. But the Skandi Iceman is a tug and could make a start on moving the rig? Stril Mar set off back to the rig, things still seem to be going on for the time being.

[rogerlin] 13/3/2017 19:02

KL Sandefjord has left Bergen, Marinetraffic gives destination as Hammerfest.