Faroe Petroleum said today it was ready for a major growth phase targeting increased production and “consolidation opportunities” offshore UK and Norway.
Ahead of its AGM, the Aberdeen-based company said it had a cash balance of £113.8million and an undrawn reserves based lending credit facility of $250million.
Faroe chief executive Graham Stewart said the firm was in position to take advantage of low industry costs and invest across its core assets in 2017.
Its goal is to increase production to over 40,000 barrels of oil equivalent per day organically within the next five years, from 15,100boepd at present.
Faroe has also qualified for repayments of £14million after approval was granted for the ODA field’s development plan.
The 15%-Faroe-owned Oda field in the Norwegian North Sea will be developed via a four-slot seabed template with two production wells and one water injection well which will tie back to the Ula platform.
On the Brasse asset, 50% owned and operated by Faroe, a test is under way to confirm well productivity with results expected shortly.
And Faroe has committed to another two exploration wells in Norway — Goanna and Fogelberg.
Mr Stewart said: “I am pleased to report that Faroe Petroleum is performing very well across its range of activities, with strong production performance in the first five months averaging 15,100 boepd, appraisal success on the Brasse discovery, a growing low cost exploration and appraisal programme and significant progress on our development projects.
“The company has also delivered good financial performance with strong cash flow, improved cash reserves and an undrawn reserve based lending facility of $250million – this ensures we have significant financial flexibility going forward.”
Al Stanton, analyst at RBC Capital Markets, said: “Despite the weak oil price, Faroe continues to build up a strong balance sheet and management sounds confident. There is value and we see upside in the stock for those investors seeking to retain some exposure to the oil sector.”
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