Faroe Petroleum has 15 per cent of a new oil discovery on the Butch prospect in The Norwegian North Sea.
The AIM-quoted company says Well 8/10-4S on the prospect has shown net oil pay of about 50 metres in the Upper Jurassic reservoir of the Ula formation (sandstone), with the entire reservoir on the side of a salt dome found to be oil-bearing.
Faroe and its Butch joint venture partners, led by operator and 40 per-cent participant Centrica, have decided to drill a side track well to see if there is more oil further down on the side of the salt dome. Chief executive Graham Stewart points out that, following August’s Fulla discovery West of Shetland, Well 8/10-4S is Faroe’s sixth discovery since 2009 from eight exploration wells.
Korean National Oil Corporation holds 21 per cent of Aberdeen-based Faroe, which raised nearly £70 million last year at £1 and says its drilling programme is fully funded into 2013. Stewart highlights two further Norwegian exploration wells to be drilled this year, T-Rex, where the company has 30 per cent, and Kalvklumpen, where its stake is 20 per cent.
Recommended by Growth Company Investor at 82p in 2009, Faroe shares have traded between 218.25p and 130p over the past year and now stand at 156p, up 12p today, valuing the company at £331.3 million. Hold on.
