Faroe Petroleum said yesterday its oil and gas output was generating enough cash to keep pace with its exploration plans.
The Aberdeen-based oil and gas independent revealed a year-to-date production rate of 8,100 barrels of oil equivalent (boe) per day, which it said was in line with expectations.
Planned investment would be fully funded by existing means, it added.
In its latest operational update, Faroe also set out its plans for a six-well exploration drilling programme in Norwegian waters. The work is due to get under way in the second half of this year and involves the Snilehorn, Novus, Butch East, Butch South West, Solberg and Pil wells. Chief executive Graham Stewart said the company was looking forward to the start of its second-half drilling programme.
He added: “Production in the year to date . . . is in line with expectations and continues to generate significant cash flow, funding our exploration programme.
“This, together with our existing cash balances, considerable UK tax loss carried forward position and a substantially undrawn debt facility, underpins the strength of the business.”
Mr Stewart said the firm was about to enter one of its most exciting periods, with a large number of high-impact exploration and appraisal wells planned.
Faroe is focused mainly on exploration, appraisal and production in the Atlantic margin, Norway and the UK.
It was set up in December 2002 as the UK holding company for Faroese business Foroya Kolvetni.
The firm recently secured a new licence in the Norwegian Barents Sea covering the Dazzler prospect, 56 miles north-west of the recent Skrugard and Havis oil finds.
Yesterday, Faroe said it was also acquiring a further 0.85% stake in the Brage Sognefjord field – also in Norwegian waters – for the equivalent of about £8.50 per boe.
Faroe’s share in Brage Sognefjord is currently 13.4% and the additional interest will give it an extra 140,000boe of proven plus probable reserves.
Faroe Petroleum shares rose 1.2% to 107.25p.
