TIDMFPM
RNS Number : 1244X
Faroe Petroleum PLC
21 November 2017
21 November 2017
Faroe Petroleum plc
("Faroe Petroleum", the "Company")
Successful issue of US$100m senior unsecured bond and updated
presentation
Faroe Petroleum, the independent oil and gas company focusing
principally on exploration, appraisal and production opportunities
in Norway and the UK, is pleased to announce the issue of a US$100
million senior unsecured bond in the Nordic bond market, with a
fixed coupon of 8%, payable semi-annually. Settlement is expected
to be 29 November 2017, with final maturity expected to be 28 April
2023. An application will be made for the bonds to be listed on
Nordic ABM.
The new money raised will augment the Company's existing cash,
cash-flow generation and undrawn US$250 million Reserve Based
Lending facility in order to provide the Company with more
financial flexibility and optionality over the investment in its
portfolio of assets, and will ultimately contribute to the
Company's production growth.
Danske Bank, DNB Markets and SEB acted as Joint Lead Managers
and bookrunners for the bond issue. Pareto Securities, Sparebank 1
Markets and Stifel acted as Co-Lead Managers.
A copy of an updated Company presentation will appear on the
website today (http://www.fp.fo/) which includes some updated
detail in relation to the Company's portfolio of assets,
specifically:
-- On the Brage oil field (Faroe 14.3%), the infill drilling
programme is progressing well and the initial performance from the
first infill well has been very good. A supporting water injection
well has already been drilled. A further infill production well is
underway and a number of additional wells are planned to be drilled
in 2018. The Partnership has also identified the potential for
further opex reductions through operational improvement projects,
which are being planned for implementation.
-- To reflect the larger resource range than previously expected
at the Brasse development (Faroe 50% interest and operator) and to
reflect the possible larger development project scenarios
associated with the larger reserves cases, the estimated capex is
now expected to be in the range of $500 - 700 million as opposed to
previous guidance of $550 million, which was for the mid-reserves
outcome only. The Company plans to complete the concept selection
process in 2018 where the scale of the development project and cost
estimate will be determined.
-- The Oda development project (Faroe 15% interest) is
progressing very well and is on track to commence production in
2019 as planned. The forecast average plateau production is 30,000
barrels of oil per day (bopd) on a gross basis (4,500 bopd net to
Faroe) compared to a previously reported initial flow rate of
35,000 bopd, which did not include operational uptime assumptions.
This has no impact on estimated recoverable reserves.
-- The Company has updated its near term Exploration and
Appraisal (E&A) drilling programme. The Iris/Hades exploration
well operated by OMV (Faroe 20%) and the Fogelberg appraisal well
operated by Centrica (Faroe 33.3%) are expected to spud in December
2017 and February 2018 respectively. The Company is planning to
drill two possible operated wells in mid-2018, which have not yet
been committed: the Rungne exploration well northwest of the Brage
field (Faroe 40%) and the Brasse North/Extension well (Faroe 50%).
In the second half of 2018, the Company has committed to drill the
Centrica operated Cassidy exploration well north of Oda in the Ula
hub area (Faroe 15%).
Graham Stewart, Chief Executive of Faroe Petroleum
commented:
"I am delighted to announce the successful completion of Faroe's
first ever unsecured bond, which has been completed on attractive
terms and with a fixed coupon. This marks another important
milestone in Faroe's evolution into a full-cycle exploration and
production company. Alongside our existing financial resources, the
maturing of our capital structure with the proceeds from this bond,
will give us increased flexibility in investing in our excellent
portfolio of assets."
- Ends -
For further information please contact:
Faroe Petroleum plc Tel: +44 (0) 1224 650
Graham Stewart, CEO 920
Stifel Nicolaus Europe Tel: +44 (0) 20 7710
Limited 7600
Callum Stewart / Nicholas
Rhodes / Ashton Clanfield
BMO Capital Markets Tel: +44 (0) 207 236
Neil Haycock / Tom 1010
Rider / Jeremy Low
FTI Consulting Tel: +44 (0) 20 3727
Edward Westropp / Emerson 1000
Clarke
Notes to Editors
The Company has, through successive licence applications and
acquisitions, built a substantial and diversified portfolio of
exploration, appraisal, development and production assets in
Norway, the UK and Ireland.
Faroe Petroleum is an experienced licence operator having
operated several exploration wells successfully in Norway and the
UK and is also the production operator of the Schooner and Ketch
gas fields in the UK Southern Gas Basin and the Trym and Oselvar
fields in the Norwegian North Sea. Faroe also has extensive
experience working with major and independent oil companies both in
Norway and in the UK.
The Company's substantial licence portfolio provides a
considerable spread of risk and reward. Faroe has an active E&A
drilling programme and has interests in a portfolio of producing
oil and gas fields in the UK and Norway, including the Schooner and
Ketch gas fields and the Blane oil field in the UK, and interests
in the Brage, Ringhorne East, Ula, Tambar, Oselvar and Trym fields
in Norway. In December 2016 the Company completed the acquisition
of a package of Norwegian producing assets from DONG Energy
including interests in the Ula, Tambar, Oselvar and Trym fields.
Full year average production for 2017, is estimated to be between
13,000-15,000 boepd. The investment programme to increase
production from the Company's existing fields continues, with the
planned installation of gas lift and drilling of two infill wells
on Tambar (Faroe 45%) and the recommencement of infill drilling on
the Brage field (Faroe 14.3%).
In November 2013 and March 2014 Faroe announced the Snilehorn
and Pil discoveries in the Norwegian Sea in close proximity to the
Njord and Hyme fields. In July 2016 the Company announced the
Brasse discovery, next to the Brage field, and the Njord North
Flank discovery, next to the Njord field, both in Norway.
Norway operates a tax efficient system which incentivises
exploration, through reimbursement of 78% of costs in the
subsequent year. Faroe has built an extensive portfolio of high
potential exploration licences in Norway which, together with its
established UK North Sea positions provides the majority of
prospects targeted by the Company's sustainable exploration
drilling programme.
Faroe Petroleum is quoted on the AIM Market of London Stock
Exchange. The Company is funded from cash reserves and cash flow,
and has access to a $250million reserve base lending facility, with
a further US$100million available on an uncommitted "accordion"
basis. The Company has also raised a $100m senior unsecured bond.
Faroe has a highly experienced technical team who are leaders in
the areas of seismic and geological interpretation, reservoir
engineering and field development, focused on creating exceptional
value for its shareholders.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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