Faroe Petroleum Share Discussion Threads

[rogerlin] 25/11/2017 08:46

PMO do have a convertible because I think there has been a strategy to hold the convertible and simultaneously short the equity, I don't really understand it but it seems to have affected the share price, we can certainly do without such complications here.

The Far Sigma, Normand Prosper and Norman Drott (the last I think a supply vessel) are approaching the Deepsea Bergen in port, while the KL Saltfjord has already set off for the Haltenbank, perhaps to pre-lay?

[wbodger] 24/11/2017 12:10

Didn't PMO raise money at 5% not long ago? I seem to remember a headline rate, but don't know the terms. Their share price was flirting with junk value at the time so if it was a convertible that might explain the good interest rate - 5% if it was paid, a charge on decent assets if it couldn't be, a bonus if the shares recovered. (I hate to even be comparing FPM to PMO, which is very highly geared and a hostage to oil prices.)

[rogerlin] 24/11/2017 08:19

Pity they couldn't have done a retail bond, 8% would do me very nicely! PMO and ENQ have them but those have been volatile due to the risks involved.

[wbodger] 22/11/2017 23:20

That is the mystery. At least the market seems relieved by the RNS, which does not suggest any convertibility. Now recovered most of what it lost.

[bountyhunter] 22/11/2017 20:04

...yes that's what I thought 8% is high @£8m interest pa for ~5.5 years = ~£44m total cost for the £100m loan so I hope they use it wisely!

...what is the point of this when they already have an "undrawn US$250 million Reserve Based Lending facility" unless they are planning on making an acquisition? (unless the terms of the RBL are worse than the 8% coupon for the £100m)

[wbodger] 22/11/2017 19:49

From RNS "... In the second half of 2018, the Company has committed to drill the Centrica operated Cassidy exploration well north of Oda in the Ula hub area (Faroe 15%)."

Nothing about Cassidy in the presentation. Perhaps the commitment is after publication? Or just overlooked? (No website page for it either.)

Faroe and Point are obviously keen to get on with Brasse Extension. (Rightly so, it's a big prospect and an increase in size of Brasse would add a lot of volume to an already commercial discovery.)

Also, no mention of it, but the SE Tor page on the Website appears to be updated, and it reads more like a 'probable', although not yet committed. The new Presentation now shows a lot of possible (not yet committed) drills for H2-2018, including SE Tor. Many of the website descriptions of licences seem to have been updated.

Various references to this sort of thing: from the presentation Actively pursuing growth in 2P reserves and value near term through potential further M&A/consolidation opportunities. I wonder what?

8% coupon on the Bond looks quite high, unless you don't intend to use it for long.

[rogerlin] 21/11/2017 20:19

"A decision to drill a well targeting both the Cretaceous Hades and Jurassic Iris prospects (formerly Aerosmith) was made in February 2017. The well is expected to be drilled in mid 2018. In addition to the prospects tested by the well, the licence contains prospectivity within sandstones in the Rogn formation and in the Triassic section. The PL644 licence was awarded to Faroe Petroleum in the APA 2011 licensing round. The PL644 B licence was awarded in the APA 2015".

There doesn't seem to be much hype about the Iris/Hades prospect, this is the current entry from the website. There was much in older presentations about some of these prospects, Aerosmith was once said to be similar to T.Rex but that was a failure and one or two others also disappointed if I recall correctly. It would help if the names didn't keep changing!

Edit. Solberg/Rodriguez was the other one I was thinking of. At that time the presentations showed maps of several Cretaceous Lange prospects which Faroe thought they could locate well on seismic, Aerosmith is also that formation I think but the talk of the multiple similar prospects seems to have faded.

[thedudie] 21/11/2017 13:23

New presentation too

[gersemi] 21/11/2017 13:21

Interesting development

[rogerlin] 21/11/2017 08:20

All the sites I have looked at seem to repeat the well duration of 142 days which seems long by recent standards and say it is high temperature and pressure.

[rogerlin] 21/11/2017 08:07

Tugs now listed to move the Deepsea Bergen.

[wbodger] 20/11/2017 22:14

I had missed that this is what was formerly Aerosmith, going back to the days of prospects named after rock bands: Clapton, Cooper, T-Rex.

Re: the use of the word prolific about the Haltenbanks (mentioned above) I see that Maria is about to come on stream a year early and under budget with estimated recoverable oil of 28.9 million SM^3 of oil (plus NGL and rich gas). FPM rightly traded their 30% of it for flowing oil but that's a good size discovery.

30% of 28.9 x 6.29 (conversion factor) gives 55 mmbo net to Petoro for Faroe's bit. (Of course Faroe could not have found the $600 million expected development cost of their 30%.)
-----------------------------------------

Come on Faroe the market is agog for news of the Bond meetings. (Edit 22/11: Thanks, Faroe)

[rogerlin] 20/11/2017 08:14

Here's the official version.

[rogerlin] 15/11/2017 08:45

OMV Norway gets thumbs up from the Petroleum Safety Authority Norway for exploration drilling in the Norwegian Sea. The operator for extraction liner 644 in the Norwegian Sea has been granted permission to drill pilot 6506 / 11-10 in the Hades / Iris prospect.

Following the plan, drilling will start no earlier than December 1, 2017 and last around 142 days, depending on the discovery.

The company that will use Odfjell Drilling's semi submersible drilling rig Deepsea Bergen from 1983.

The rig arrived in September directly from the North Sea to a warm print on Averøy outside Kristiansund. During the last two months, maintenance and preparation of Deepsea Bergen has been carried out for the new assignment.

The exploration well Hades / Iris is located at Haltenbanken in the Norwegian Sea, about 280 kilometers north of Averøy and 300 kilometers west of Brønnøysund.

The ocean depths of the site are about 342 meters

[ed 123] 14/11/2017 11:36

Ah, ok then. It was your moniker that prompted me.

Now that's out of the way, I'll say that, when I've had first hand knowledge of something which has been written about in the press, there's normally been a big error in the journalist's report.

Moving on, I definitely don't see a placement coming. Firstly, no mention of it in the bond rns from the company and, secondly, if a placement had been in the plans, wouldn't they have done that ahead of the bond issue? - to lower the risk of the bond and hence achieve a lower interest rate.

Delek? Yes, they are better funded than KNOC. eg. Delek recently approved buying back their own shares in the market, and they seem to be close to buying some assets in the Gulf of Mexico. Maybe the other 85% of Faroe will be on their agenda at some point in time? Who knows?

[wbodger] 14/11/2017 11:03

Ed: Journalist! How very dare you !! :-O

Actually I quite liked the Telegraph piece, although the Corrib mistake was careless. I tried to unpick what she knows/guesses. (I suppose it would have been quicker to phone Faroe and ask. If it drags on I will do so but they won't say much now.) I guessed the hint towards Fenja and Brasse was correct, as it would make sense, given the history of Maria and given Point's present circumstances.

I believe Dana was offered participation in placements after 2010 but didn't take it up after they were bought by KNOC. We haven't heard of a Delek representative on the Board have we? Perhaps they are content to be kept in the loop for now.

I do hope all question of placements is spurious though.

[thedudie] 14/11/2017 10:37

hxxp://www.offshoreenergytoday.com/omv-gains-nod-to-drill-hades-iris-well-with-deepsea-bergen-rig/

duration up to 142 days .....
Start on or after 1st December

td

[ed 123] 13/11/2017 23:59

Wbodger. Apologies re: my post 520, if you are a journalist. (No need to respond.)

Re: Brasse development. Faroe are the operators and 50% holders, so have control. They could (not saying they will) go for a leased FSPO or tie into Brage, if that's cheaper, and say two producers. That would be relatively low capital outlay. Then, when the oil's flowing, use the cash flow to undertake a more extensive development.

Possibly that's what this $100 million is about? To cover a cheap start up at Brasse? Faroe need to show whoever that they can stick with the full 50% of Brasse all the way through to production? If that is accepted, then 'whoever' may offer a more realistic deal? Only my speculation, of course.

Another thought .... Faroe diluted KNOC but have chosen not to dilute Delek. Anything to be read into that? I think that HiTec Vision (as well as Delek) has to be interested in Faroe.

And on to the commodity price ... the $60 barrel has come at the right time for Faroe. They need to lock in some more of their future production at this level, imo.

Viewing the whole, Faroe is looking good. Happy holder. (No advice intended.)

[wbodger] 13/11/2017 22:16

All three of the banks mentioned in Friday's RNS are Scandinavian, although the funds will be secured in the market. $100 million seems very small. Friday's RNS just looks like news management, in case news of the meetings affected the share price - which it would if not managed.

Two developments are specifically named in the Telegraph story, Fenja and Brasse, the ones where our partner is the new playground bully Point Resources, bulked up with all that Exxon-Mobil production and personnel (the deal is now complete):
hxxp://www.offshoreenergytoday.com/exxonmobil-sells-norwegian-business-to-point-resources/

TheTelegraph may be speculating (or may have talked to Hitec/Point) because the fields they name were not in the Faroe RNS. Brasse development especially will be expensive given Faroe's 50% share. The reporter seems to think Faroe are working on a sale of part of their portfolio - not a farm down ahead of development, which would be more usual. I bought my first shares after the Maria divestment which brought developed production, ie cash flow, in return for 30% of a discovery which would have been crippling for a fledgling company to develop. It was generally a good deal, although Njord 'A' was part of it, and that has not turned out so well.

(Just for revision, Fenja was Pil, and Point secured their 45% of it by taking over Rocksource who had 15%, and merging that stake with Spike Exploration's 30%. Brasse was discovered by FPM and Point, 50/50.)

[rogerlin] 12/11/2017 16:58

Also mentioned by Simon Thompson in Investor's Chronicle "Importantly the fundamentals driving the oil price higher are sound and should support further share price gains towards my 115p target price, and perhaps beyond".

[bountyhunter] 11/11/2017 19:52

I would think 5% would be about right. Could be good timing with interest rates expected to slowly rise over the next few years.

[ed 123] 11/11/2017 19:26

There's piece in today's Telegraph on Faroe, its plans and the proposed bond.



Sadly, it's written to normal journalism standards. For instance, readers are told that Nexen agreed to meet the costs of developing Faroe's Corrib gas field. That is incorrect. The Corrib gas field is big and already in production, operated by Shell. Faroe have no part of it. What Faroe do have is an interest in a block to the east of the Corrib field, and Nexen agreed to run seismic, etc., to determine if there's anything worth drilling, plus any first well carry, in return for 80%.

Unfortunately, this calls into doubt the rest of the piece (unless we have it corroborated from another source). So, I'm not sure what to make of the Telegraph story.

Aside from that, anyone care to guess what the interest rate will be (assuming the bond goes ahead)? I'll say 5% pa.

[ed 123] 11/11/2017 14:27

The rns didn't mention convertible; it said, a senior unsecured bond.

Also, if a convertible had been on the way it's likely the share price would have fallen. In fact the shares went up 1p on Friday, on a normal volume.

[ntv] 11/11/2017 09:16

It won't be so good if it is a convertible bond though.
Should know soon