The Press and Journal (Aberdeen and Aberdeenshire)
Acquisitions elusive but Faroe can hit the target
Oil and gas: Chief says firm ready to up daily production by more than double
Faroe Petroleum’s existing portfolio can deliver the oil firm’s medium-term growth targets as acquisitions prove to be elusive, its boss said yesterday.
Chief executive Graham Stewart said hot competition for a shrinking shortlist of available assets meant securing deals had been tricky.
But Mr Stewart said Faroe was fully funded to meet its objective of more than doubling production to 35,000 barrels of oil a day – from 12 to 14,000 at present – all from its existing assets.
“An assumption lots of players are leaving the North Sea but it’s not the case ”
He said: “Some people think there are lots of acquisition opportunities, but there really aren’t.
“There has been an assumption that there are lots of players leaving the North Sea. That’s not the case. Some are pruning their portfolios and selling off less important assets.
“Quite a lot of bigger portfolios are going to hit the market. Those are less likely to be an option for us, unless companies are prepared to sell parts of those portfolios individually.”
Mr Stewart said Faroe’s track record for exploration success is above average and bodes well for the future.
The Aberdeen-headquartered firm will participate in seven exploration and appraisal wells over the coming months.
Drilling on the Agar-Plaintain prospect – operated by Azinor Catalyst – is under way and will be followed by Faroe’s Rungne well.
The company hopes to secure a Norwegian licence for its Edinburgh field, regarded as one of the central North Sea’s largest undeveloped prospects. The field straddles the border between the UK and Norwegian sectors.
Interim results showed Faroe was back in the black in the first half of 2018, posting pre-tax profits of £73 million, compared to a deficit of £6m a year ago. Revenues dropped to £68m from £80m as income from “produced but not lifted hydrocarbons” was not included. of semi-submersible rigs operated by DSM’s clients in the UK continental shelf.
Mr Tafazzoly said: “There is minimal impact in terms of tidal dependency. As a consequence, an offshore support vessel does not have to wait for hours before she can berth or leave for sea again.
“Other operators in nearby ports have problems because of draft restrictions. This saves a lot of valuable time for our clients.”