Faroe Petroleum will plug and abandon a well after it came up dry. The company said the Portrush exploration well encountered no hydrocarbons in well 6407/10-5. The well was drilled to a vertical depth of 2,850 metres below sea level and was terminated in the objective interval.
Faroe Petroleum has commenced drilling of an exploration well in the Norwegian Sea. The independent oil and gas explorer holds a 20% share in the Portrush well located in licence PL793. Faroe said the well, which is 10km from the Statoil-operated Njord field and 20km west of the Shell-operated Njord field, will target prospective resources along the Vingleia fault .
Faroe Petroleum has managed to reduce its operating costs to $22 per barrel. The independent oil and gas company confirmed the five-month run at $22pb in its latest production update. In turn, the firm’s cash and net cash increased from £14million in December to £107million and £84million in May this year.
Faroe Petroleum has increased its pretax exploration and appraisal capital expenditure for 2015 from around £100million from £85million in 2014. The company also said it has hedged about 58% of its 2015 post-tax production. The oil and gas producer has estimated a production forecast of between 8,000 and 10,000 barrels of oil equivalent per day (boepd). Graham Stewart, Chief Executive of Faroe Petroleum, said: “We are pleased with the progress of the Company in 2014 despite the low oil price environment.
Faroe Petroleum said it was “well placed” to consider attractive acquisitions this year as the falling oil and gas price sees rivals selling off assets. The company said its strong cash position and undrawn debt facilities mean it expected 2015 to be “another year of growth”. The firm, which has the largest stake in Norwegian oil fields for a UK-based company, said post-tax exploration and appraisal costs were expected to run to £25million while production capex was expected to be £16million this year.
Faroe Petroleum has been awarded five exploration licenses on the Norwegian Continental Shelf. Three of the licenses are in the Norwegian Sea and two are in the Norwegian North Sea.