Executive Summary
Faroe Petroleum (LON:FPM) is a gas and oil exploration, development and production company that owns a licence portfolio of 50. It operates in the Faroe Islands, the UK West of Shetlands, North Sea and Norway. The company is listed on the AIM of the London Stock Exchange and earned revenue of £7.0m and made a loss of £6.9m in 2009. Faroe Petroleum's five North Sea wells produced 1,800 boepd to December 2009.
Company History
Faroe Petroleum was established in December 2002. Some of the company's key milestones are outlined below: [1]
- June 2003: the company was admitted to the Alternative Investment Market of the LSE and raised £14m through an institutional share placing to finance drilling and provide general working capital.
- September 2004: the company obtained its first tranche of UK West of Shetland licences.
- February 2005: the company acquired its first North Sea assets in the Moray Firth
- February 2006: the Group established offices in Stavanger and was awarded seven Norweigian licences.
- August 2006: the Group acquired pre-development assets in the Southern Gas basin leading to its first production from the Minke Main field in June 2007.
- September 2007: further Southern Gas basin assets were acquired in the Wissey field development, Schooner producing field, and Topaz development field (November 2007).
Current Events
Recent events for Faroe Petroleum are as follows:
- May 2009: Faroe announced an exchange with DONG E&P of its interest in the Trym development [2] for cash and interests in the Glinte [3] and Enoch [4] oil fields [5]
- August 2009: the company announced that it had entered into the second phase of the exploration programme in two Norwegain licences and that it had committed to drill two wells, T-Rex and Butch. [6]
- September 2009: the company announced the successful drilling of the Glenlivet gas field, West of Shetland, leading to the drilling of a second side track appraisal well. [7]
Business Model
The company pursues a business strategy of shareholder value creation through the following activities:
- The acquisition and drilling of lower risk exploration and appraisal assets in the wider North Sea and Norway, with the aim of increasing the underlying value of the company;
- The discovery of substantial hydrocarbon resources West of Shetlands, Faroes and Norway by drilling exploration wells with material…
