Faroe Petroleum Plc (LON:FPM) is raising nearly £70 million in order to fund the drilling of up to eight new wells over the next two year on its licences in the Atlantic Margin, the North Sea and Norway.
The company has launched an underwritten 0.6666 for 1 rights issue that will also give it extra headroom to apply for new exploration licences in the UK, Norway and Greenland as well as implement plans to enhance reserves and production.
John Bentley, Faroe’s chairman, described the transaction as “transformational” and said that, with three exploration successes and two monetisation deals over the last year, the company had proven the value creating potential of its portfolio exploration business model.
Elsewhere today, Faroe published its full year results, which saw turnover rise to £7.0 million from £2.3 million last time and losses after tax slashed to £6.9 million from £20.6 million in 2008.
During the last 12 months Faroe has notched up two significant Atlantic Margin gas and oil discoveries in Glenlivet and Tornado. In March it added to the success with a gas and condensate discovery in the Fogelberg exploration well, which lies on one of seven licences on the Halten Terrace in the Norwegian Sea.
Today, the company said that five of the eight planned wells were scheduled to be drilled in 2010 and that it was preparing to apply for new licences in Norway, the UK and Greenland.
Graham Stewart, Faroe’s chief executive, said: “The period ahead is a particularly exciting one as we drill many high potential value exploration wells. With a sustainable model and high quality assets, our team are confident of delivering substantial value to our shareholders.”
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