Oil and gas group Faroe Petroleum (LON:FPM) said this morning that drilling operations were under way on the Fulla exploration prospect, located in the west of Shetland area of the Atlantic margin. This west of Shetlands well, located to the north east of the producing Clair oil field, is targeting potentially oil-bearing Devonian Clair reservoir sands at a depth of 2,100 metres. Faroe has a 50% stake and operatorship of the well which is being drilled by the WilPhoenix semi-submersible drilling rig under contract with Awilco Drilling in a water depth of 120 metres. Operations are expected to be completed well within the summer weather period. Shares in AIM-listed Faroe rose by 2p to 171p during morning trading.

UK Licence P.1161 contains both the Freya oil discovery and the nearby Fulla exploration prospect. The Freya discovery was drilled by Mobil in 1980 and encountered 140 metres of oil-bearing Devonian Clair reservoir sands. Similarly to a number of the Clair appraisal wells, a valid surface oil sample was not obtained in the Freya discovery well. Since Freya was drilled, horizontal well drilling on the Clair oil field has led to a very successful extended well test in 1997 which in turn led to development sanction. The BP (LON:BP.) operated Clair field is under phased development and has been on production since 2005, having to date produced in excess of 75 million barrels of oil with current rates at approximately 40,000 barrels per day.

The Fulla exploration prospect lies in the same Clair reservoir sands at a depth of approximately 2,100 metres and is situated along the same structural trend to the north east of both Clair and Freya, thereby de-risking the prospectivity of the target.

The objectives of the Fulla exploration well are to prove a significant column of oil-bearing Devonian Clair reservoir sands on the Fulla structure and, in that event, to obtain an oil sample using advanced wire-line technology. Faroe said that if these these objectives are met, uncertainties related to a possible Freya and Fulla combined development project would be significantly reduced.

In December 2010 Faroe farmed out a 50% interest in Licence P.1161 to Canadian Overseas Petroleum Limited (COPL) on promoted terms, such that COPL will pay 60% of estimated well costs for the Fulla well.

Graham Stewart, the chief executive of Faroe…

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