Faroe Petroleum said yesterday it was spending about £170million this year, which is £20million more than the company had indicated previously.
The oil and gas independent said its new total included about £120million for exploration work.
About £50million is earmarked for developments and producing fields.
Faroe, set up in December 2002 as the UK holding company for Faroese business Foroya Kolvetni, aims to drill five wells in 2013.
Four of them are in Norwegian waters and the fifth – an appraisal well on the central North Sea Perth field – is in the UK.
Production for this year is estimated at 7,000-9,000 barrels of oil equivalent per day, compared with a daily average of 6,900 last year and 2,500 in 2011.
Reporting annual results yesterday, chief executive Graham Stewart said 2013 had been an exciting year for the firm after a particularly active previous 12 months.
He added: “We have increased our portfolio significantly through a large number of licensing awards, including our first award in Iceland.
“The considerable increase in cash flow from our production base, combined with healthy cash balances and debt facilities ensures we are well financed going forward.
“2013 kicked off with a significant discovery at Rodriguez and our portfolio of exploration licences ensures Faroe has an exciting and material drilling programme ahead.”
In February, Faroe confirmed a gas-condensate find at its Rodriguez exploration well in the Norwegian Sea. Preliminary estimates are for 6-38million barrels of recoverable oil equivalent net to Faroe, which owns 30% of the licence.
Aberdeen-based Faroe’s portfolio consists of about 60 exploration, appraisal, development and production licences spread across Faroe, the North Sea and west of Shetland, the Norwegian Sea, Barents Sea and offshore Iceland.
The firm said it continued to build one of the largest exploration acreage positions among UK independents west-of-Shetland last year. Its “material large frontier well opportunities” in the area’s deeper waters include the Grouse and Aileen prospects.
Faroe also said it was considering the potential to acquire further production to grow its tax-efficient cash flow.
Pre-tax losses for last year came in at just under £29million, compared with profits of £14.25million in 2011, after the firm invested £161.4million on development and exploration. Revenue nearly doubled to £158.79million during the period, from £80.23million the year before.
The company paid tribute to Iain Lanaghan, who is leaving the board at the end of April after four years as finance director, with chairman John Bentley adding that the search for a successor was well advanced.