Faroe Petroleum extended its assets after its discovery of low-cost oil and gas reserves off the coast of Norway. After Faroe had confirmed discovery from its Brasse exploration well, stocks climbed more than 5 percent.
They will soon start drilling to accurately get the size of the reserves that are jointly owned by partner Point Resources. Graham Stewart of Faroe said, “We are very pleased to announce the oil and gas discovery at the Brasse prospect and await the results of the [drilling]. 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”.
The new reserves come at a much-needed time; they will offset the loss of production operations that were suspended at Faroe’s Njord field. Soon, Faroe anticipates expansion to its assets by acquiring additional North Sea oil and gas fields. They diverted debt before the market tanked by putting all focus on low-cost North Sea reserves.
Faroe is in talks to acquire many more assets for sale that its peers are selling to balance their own budgets, avoiding further debt. The North Sea still has low-cost reserves for the smaller explorers, and the company anticipates one completion by the end of the year.
Earlier this year, Mr. Stewart said, “People have the impression that the North Sea is on its last legs – ‘It’s so old and decrepit and expensive. It’s just a matter of time before they turn the lights out’. That’s not the case. There’s a lot of life left in the North Sea, some of it will be decommissioned, but I think there are some green shoots coming out of the downturn. I would not give up on the North Sea.”
Article written by HEI contributor Marcela Abarca.