Faroe Petroleum is poised for a major growth spurt after a whirlwind year for the Aberdeen-based oil and gas explorer.
Faroe’s highlight reel for 2016 includes Delek Group’s acquisition of a 13.18% stake in the business from Dana Petroleum.
The transaction positioned Israel’s Delek as the largest single shareholder in London-listed Faroe.
In July, Faroe struck a deal to buy more than £50million worth of Norwegian North Sea assets from Dong Energy.
That same month the firm celebrated its biggest ever North Sea discovery – the Brasse field.
And in December Faroe confirmed it had landed £300million of new banking facilities needed to sustain operations and fuel growth plans.
The firm, which ended 2016 with a cash position of £97million, has stakes in a large number of oil and gas fields on the UK and Norwegian continental shelves, and is in the market for more barrels.
Faroe chief executive Graham Stewart said yesterday: “We are now poised for a major growth phase as we invest across our core hub assets in 2017 and beyond, and believe that we have the asset base to reach our stated goal of 40-50,000 boepd over the next five years.
“We continue to seek to capitalise on our strong financial position to pursue consolidation opportunities in our core areas on the UK and Norwegian continental shelves, while kicking off another exciting high impact exploration drilling campaign.”
Production from Faroe’s UK-Norway portfolio averaged 17,400 barrels of oil equivalent per day (boepd) in 2016.
Average output for 2017 is currently forecast in the range of 12,000-15,000 boepd from all fields.
Faroe said the reduction reflected the work being carried out on some of its fields, including those acquired from Dong.
Analysts from BMO Capital Markets said Faroe was entering 2017 on a firm footing after the deal with DONG.
They said: “It is clear that development is quickly becoming a more important part of the narrative. We continue to highlight Faroe as one of the most attractive names within our coverage with its robust balance sheet, optionality around value-enhancing development as well as high impact exploration.”
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