Faroe Petroleum has struck a deal to farm out two of its Norwegian Sea licences as it looks to step up its exploration programme for the rest of the year.
The oil and gas independent said it had struck a deal with Spike Exploration to farm out 15% of Faroe’s previous 50% stake in the Novus field, and 10% of its 30% holding in the Solberg prospect.
Concedo has also snapped up a 5% stake in Novus from Faroe, which will remains operator of the licence. In exchange, the companies will shoulder some of the exploration costs for the sites.
The deals come as Faroe prepares for exploration wells at its interests in Snilehorn, Pil and the Butch fields, along with the Novus and Solberg sites.
Faroe’s production levels hit an average of 7,890 barrels of oil equivalent a day in the first half of 2013.
“The farm out of the forthcoming Novus and Solberg wells is the most recent example of our ongoing portfolio management,” said chief executive Graham Stewart.
“We seek at all times to balance exploration cost exposure with reward, and with the farm-out of these two wells we have secured a good outcome, whereby we retain material equity interests in these exciting wells but are exposed to only a fraction of their cost.
“Production in the first half of the year has been in line with expectations and expected full year average economic production is now expected to be at the lower end of the guidance range of 7,000 to 9,000 boepd, due to both later than expected infill wells and longer than expected maintenance periods on some of our assets.”
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