Edison Investment Research

Faroe Petroleum

Company overview

Faroe Petroleum is an independent oil and gas company focused on exploration and appraisal drilling in the Atlantic Margin, the North Sea and Norway.

Date	Reports available	Download
Aug 07 2009	Sale of Breagh The importance of the sale of Faroe’s 10% interest in the North Sea Breagh gas field is that it frees the company from financial constraints and allows for a potential two-year expansion beyond the 2009 and 2010 exploration programme already fully funded. Unlike many of its peers struggling to finance their exploration programmes, Faroe’s proceeds of US$41.6m (£25.3m), prior to WC adjustments, from this deal combined with its cash balances, bank facility and the recently announced asset swap deal with DONG gives us confidence that Faroe can develop its exploration portfolio further. It also ensures continuing newsflow from drilling activities in the coming years. Research type: Update	Log in to download 2 page note available
Jul 02 2009	A growing production base Faroe recently announced its entry into the Barents Sea with a new licence operated by BG and an asset swap in Norway which gives it an additional 800bbl/d of production. With seven committed and fully funded wells over the next two years, there is potential for substantial share price appreciation over the next 18 months. Research type: Update	Log in to download 6 page note available
Apr 24 2009	Very attractive exploration upside Faroe reported 2008 results, with turnover of c £2.3m and a £20.6m post-tax loss, mainly due to exploration expenditure and write offs, a common feature with exploration companies. Faroe has a substantial exploration portfolio, with seven committed exploration wells in the Atlantic Margin and Norway. Faroe also has four fields under development. This should lead to a growing production base and strong revenues going forward with expected 2009 net sales at c £7-8m. Research type: Update	Log in to download 2 page note available
Dec 18 2008	The Atlantic explorer Faroe Petroleum is a junior E&P company with a focus on both sides of the North Sea (UK/Norway) and the Atlantic Margin. The company has secured material equity interests in a portfolio of high-risk/high-reward prospects balanced with assets in lower-risk areas such as the southern North Sea and revenues from producing fields. Faroe’s key differentiators are its strategic position in the Atlantic Margin, where it partners with major oil companies, and a technical team with a proven track record. In contrast to many of its peers, the company’s financial position is strong as it has secured two credit facilities, which together with its own cash will be sufficient to fully fund its upcoming exploration programme and to capitalise on new opportunities. Research type: Outlook	Log in to download 16 page note available

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Edison's research ... is balanced, objective and provides a level of detail not normally associated with smaller companies.

Peter Knowles
Director, Fyshe Horton Finney