Faroe Petroleum completed the acquisition of a 10% non-operated interest in the BP-operated East Foinaven oil field and a 0.5% interest in the West of Shetland Pipeline System, both from Marubeni Oil & Gas (North Sea) Ltd .
The net consideration payable for the acquisition of the interests, after adjusting for net income receivable by the company from the sale of hydrocarbons from the field during the period, has been reduced to about US $22.5 million, to be funded from the company’s existing cash resources.
Remaining proved and probable reserves, as evaluated by the company of January 1, 2013, were 1.2 MMboe net to Faroe Petroleum. Average daily production for 1H 2013 net to the company was about 400 boe/d.
“East Foinaven is a good quality, long life producing oil field which provides significant upside potential in one of our core areas,” said Graham Stewart, chief executive of Faroe Petroleum. “The transaction provides shelter for both past and future tax losses in the UK and is in line with our strategy to grow our production base in order to fund the company’s active exploration program. We look forward to an exciting period of exploration drilling kicking off with the Snilehorn well in Norway scheduled to commence at the end of Q3 2013, followed by a further five wells as we head into 2014.”