February 1, 2013 10:22 pm

Faroe Petroleum ends barren spell

Faroe Petroleum ended a barren spell of drilling failure this week by announcing a significant gas condensate discovery in the Norwegian Sea.

The exploration well, which began drilling in December, is operated by German energy group Wintershall that owns half of the Rodriguez licence that sits half way up Norway’s western coast. Aim-quoted Faroe holds a 30 per cent stake in the licence, with Centrica holding the remaining 20 per cent.

The discovery is estimated to contain between 19 and 126m barrels of oil equivalent – though the successful commercial exploitation of the licence could depend on a review of gas transportation tariffs by the Norwegian government.

Faroe, whose drill-bit success has been subdued over the past year, is involved in seven exploration wells across the North, Norwegian and Barents Seas over the coming year.

Despite the news, Faroe’s shares traded steady at 140p over the week. Following its run of dry wells, Faroe’s shares remain backed by production that averaged 7,200 barrels of oil equivalent a day last year that should comfortably allow the company to continue rolling the dice.

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