Explorer focused on cost
Faroe poised for growth in Norwegian North Sea
North Sea operator, Faroe Petroleum says its Norwegian activity is now one of the most significant of any UK independent E&P company and, despite the challenging market conditions, it is set for another year of growth.
The company has a fully-funded drilling programme of low cost, high impact exploration wells, all of which it expects to benefit substantially from Norway’s tax-based exploration financing incentives.
Chief executive Graham Stuart, said in its annual results statement: “In the current low oil price environment, there is much focus on both cost and financial strength.
“Faroe is particularly robust despite low oil prices, due to a combination of factors including: a significant cash position and substantially undrawn debt facilities; sustained cash flow from a balanced, low-opex and substantially hedged oil and gas production portfolio; and, following the sale in 2014 of our interest in Glenlivet, the absence of any substantial development capital commitments.
“Consequently, Faroe is well placed to deliver continuing commitment to its ongoing work programme and to capitalise potentially on attractive asset opportunities which may become available in the period ahead.”
The company reported a loss of £55 million (2013: profit of £14.1m) after tax following impairment charges and exploration write-offs. Revenue came in at £129.2m (2013: £129.4m) and EBITDAX £59.1m (2013: £80.1m). The reduction in EBITDAX is principally due to lower realised price per boe at $71 (2013: $105)