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Another year of growth

Faroe in ‘robust’ shape despite oil price dip

Graham StewartOil explorer Faroe Petroleum has shrugged off the wider crisis in the North Sea and said it has seen a year of growth.

In an upbeat trading statement the Aberdeen based firm’s chief executive Graham Stewart said 2015 was another year of growth and good progress for Faroe despite a backdrop of significantly lower commodity prices.

“We delivered our exploration drilling programme safely and under budget,” he said.

” Our diverse North Sea production portfolio also outperformed expectation…with low unit operating costs, and we ended the year with a significant cash position of over £90 million and a largely undrawn debt facility.”

Despite the fall in oil prices Mr Stewart said the company was in good shape for the coming months.

“Looking ahead at 2016, we are well prepared to face the challenges of a continuing period of low commodity prices, while seeking to capitalise on our strong financial position to pursue consolidation opportunities in our core areas on the UK and Norwegian continental shelves,” he said.

Faroe has ended 2015 in a “robust financial position” with significant cash reserves and a largely undrawn credit facility.

 ·      2015 year-end unaudited cash position was approximately £91 million (net cash position of £68 million3)

·      US$33 million (unchanged over the period) drawn against the company’s US$2254million reserve based lending facility

·      2015 exploration and appraisal capex was approximately £61 million pre-tax (£15 million post-tax) and development and production capex was approximately £13 million (unaudited)

·      2016 exploration and appraisal capex is estimated to be approximately £50 million pre-tax (£12 million post-tax) and development and production capex approximately £20 million

·      2016 hedging programme in place with approximately 65% of gas production hedged on a post-tax basis at 45-50 pence per therm

·      Broad range of targeted cost reduction measures taken and ongoing by Faroe and its joint venture partners across the business and portfolio, such as significant cost efficiencies through logistics sharing on the Faroe-operated Schooner and Ketch fields.

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