2011-04-27-2011-04-11

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Estimated Price
MM
Description

To swap 30% WI in Maria discovery in PL475BS & PL475CS in North Sea for 7.5% WI in Njord Field & Njord Unit, 7.5% WI in license PL348 & PL348B near Njord, 14.2% WI in Brage Field & Brage Unit, 13.4% share in Brage Sognefjord Field, 7.8% WI in Ringhorne East Field, 7.8% WI in Ringhorne East Unit & 3% WI in Jotun Field & Jotun Unit.

Faroe Petroleum Plc, Aberdeen, U.K., (London AIM: FPM) plans to swap assets in the Norwegian North Sea with Stavenger, Norway-based state-owned Petoro AS.

Faroe will exchange its entire 30% interest in the Maria discovery in PL475BS and PL475CS for a 7.5% interest in Njord Field and Njord Unit (excluding the Noatun discovery); a 7.5% interest in production license PL348 and PL348B near Njord containing the Gygrid development project and an exploration prospect, a 14.2% interest in Brage Field and Brage Unit; a 13.4% share in Brage Sognefjord Field, a 7.8% interest in Ringhorne East Field, a 7.8% interest in Ringhorne East Unit and a 3% interest in Jotun Field and Jotun Unit.

This is a pure asset swap with no cash consideration.

The deal adds production of more than 7,300 barrels of oil equivalent per day to Faroe's estimated 2011 average production, which is now expected to be 9,200 barrels equivalent per day. Also, the assets feature proved and probable reserves of 14 million barrels equivalent.

Petoro will retain the principal abandonment and decommissioning liabilities for the Petoro assets, including Njord, Brage and Jotun fields.

The Maria discovery was announced in July 2010. The operator, Wintershall (25%), is currently carrying out concept screening studies and is working toward FDP submission in 2012/2013. An appraisal well in the northern part of Maria is planned in late 2011.

Faroe chief executive Graham Stewart says, "We are very pleased to announce this transformational transaction, which is a significant achievement for Faroe at a number of levels: it demonstrates clearly the value of the Maria discovery, a high-quality, undeveloped oil field with strategic importance; it proves Faroe's portfolio business model of realizing significant value for exploration success, and within nine months of the Maria discovery; it swaps on a fair-value basis undeveloped resources for producing reserves."