FAROE Petroleum, the Aberdeen-based oil and gas company, said yesterday it had agreed to increase its interest from 20% to 40% and obtain the operatorship of a Norwegian licence containing the Clapton oil prospect.
It is acquiring the extra 20% from current operator Det norske oljeselskap which reduces its stake to 10%.
Other partners are Noreco (12%), Lundin (18%) and Dana (20%).
A well has been committed on the licence, and is expected to be drilled late next year or early 2012. The cost to Faroe of the deal depends on future drilling costs.
Faroe said the licence, awarded in 2006, was in a prolific area close to the giant Ekofisk, Valhall and Eldfisk oil fields, which are estimated to contain 6-7billion barrels of oil equivalent in reserves.
Graham Stewart, chief executive of Faroe, said: “We are very pleased to announce the commitment to drill the exciting Clapton prospect with an increased stake.
“We are also pleased to take on operatorship of our first Norwegian licence following pre-qualification as operator earlier this year.”
Analysts at Oriel Securities said their net asset value for Faroe stood at 145p a share with a further 152p a share near-term exploration upside, which had yet to incorporate the Clapton well. It retains a “buy” recommendation on the stock.