Faroe Petroleum, of Aberdeen, has announced a farm-out to Canadian Overseas Petroleum (COP).
The deal involves west of Shetland licence P1161 and the associated commitment to drill an exploration well on the Fulla prospect.
The licence contains both Fulla and the Freya discovery. The plan is to drill a vertical exploration well on Fulla next year.
Under the terms of the farm-out agreement, Faroe will retain a 50% interest in this licence and operatorship, while COP will acquire a 50% interest and pay a proportionately larger share of costs on the Fulla well.
Faroe chief executive Graham Stewart said yesterday: “We are very pleased to announce the farm-out and drilling commitment of this important west of Shetland exploration well, which will be the second Faroe Petroleum operated well in its drilling programme, following announcement of the Norwegian Clapton well (Faroe 40%) last week.
“The company made two significant discoveries in the west-of-Shetland area in 2009, in the Glenlivet and Tornado fields, and holds a very substantial acreage position across this important exploration province.
“The Freya and Fulla prospects have been part of Faroe’s Atlantic-margin portfolio for … years and offer exciting upside potential in a prospective area close to existing infrastructure and the significant Clair field.”
Valiant Petroleum said it would abandon a Don Southwest exploration well in the North Sea as a dry hole and is moving its drilling rig from the site to area E of the Don Southwest fields, which it estimates could contain gross resources of 7-10million barrels of oil. Shares in Valiant closed down 10.4% at 533p.