Faroe Petroleum has agreed to acquire a further 13.9935% interest in the producing Blane field in the UK North Sea from JX Nippon Exploration and Production for US$5.25 million.
The field is a subsea tie-back to the Ula platform (Faroe 20%), on the Norwegian continental shelf (34km to the north east), and currently comprises two horizontal production wells with gas lift and one water injection well.
The field, operated by Repsol Norge, was discovered in 1989, on the Central Graben of the UK continental shelf, extending into the Norwegian sector.
Production started in September 2007, from a Tertiary Palaeocene Forties sands reservoir with a structural closure. Blane produced 2900 boe/d in 2016 and has potential to grow reserves, extend field life and reduce unit opex, says Faroe.
Faroe CEO Graham Stewart said: "Raising our stake again in Blane, offers significant upside potential as we realise synergies through Blane's use of our key Ula hub; increasing net production, reducing average operating costs, increasing profitability and providing access to further reserves potential from the field. The transaction is also very tax efficient for us, providing shelter for both past and future tax losses in the UK. Faroe continues to advance a number of key projects in and around the Ula hub area, all of which will serve to extract greater value from this particular deal through improved operating synergies."
The 13.9935% interest in the Blane field is derived from a 17.0653% interest in UK License P111 covering Block 303a (upper).
The acquisition is expected to complete before the year-end and is subject to UK regulatory approval, the approval of the Blane joint venture partners and the resumption of production after the completion of certain scheduled subsea works this summer.
Faroe CEO Graham Stewart said: "Raising our stake again in Blane, offers significant upside potential as we realise synergies through Blane's use of our key Ula hub; increasing net production, reducing average operating costs, increasing profitability and providing access to further reserves potential from the field. The transaction is also very tax efficient for us, providing shelter for both past and future tax losses in the UK. Faroe continues to advance a number of key projects in and around the Ula hub area, all of which will serve to extract greater value from this particular deal through improved operating synergies."
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