Faroe Petroleum upbeat on mixed Anne Marie results

Oil and gas group Faroe Petroleum Plc (LON:FPM) reported this morning that hydrocarbons had been discovered in the Anne Marie exploration well in the Faroe Islands, although drilling had failed to hit the thick reservoir sands that had been hoped for. Nevertheless, Faroe said the drilling results had given it enough encouragement to continue exploration on Licence 005. Elsewhere, the company said that the Chevron operated Lagavulin exploration well in the west of Shetland had spudded last month and should take 120 days to complete.


Faroe works principally on exploration, appraisal and production opportunities in the Atlantic margin, the North Sea and Norway. It holds 12.5% stake in the Anne Marie well, which was spudded in late July and drilled to a total depth of 3,901m, in 1,106 metres water depth. Hydrocarbons have since been found in thin sandy layers dispersed in a thick volcano-clastic sequence of Paleocene age, indicating robust evidence of the presence of an active petroleum system. Further analyses are in progress to evaluate the size and the characteristics of the discovery.


The Norwegian semi-submersible drilling rig Seadrill West Phoenix, which was used for the drilling operation, is expected to plug and abandon the well as planned and move away from the location in the coming days. The joint venture is composed of Eni Denmark BV as operator with 25% participating interest, Dana Petroleum Plc (LON:DNX) 25%, OMV 20%, Cieco Eamp;P (Faroe) Ltd 12.5%, First Oil Expro 5% and Faroe Petroleum 12.5%.


The Lagavulin exploration well, where Faroe holds a 10% stake, is being drilled with the Stena Carron drillship operating 230km north east of Chevron's Rosebank / Lochnagar discovery. The well will target a number of potential oil bearing reservoirs of pre-Cretaceous to Paleocene age located within a large, elongated four-way structural closure. Lagavulin, which lies across blocks 217/10 and 210/14 and 15, has a reserve potential of more than 500 million barrels of oil equivalent, classing Lagavulin as one of the largest undrilled structural closures on the Atlantic Margin.


Graham Stewart, Faroe’s chief executive, said: “Whilst we did not encounter thick reservoir sands at the Anne Marie well location, the discovery gives us significant encouragement to continue exploration efforts in this licence, which we have held together with ENI for over 10 years. Our high impact exploration programme continues with the drilling of Lagavulin, and Faroe's ongoing multi-well exploration drilling programme will carry on through 2011 and beyond as we push forward to test our substantial northern seas portfolio of over 40 significant licences, to which we have last week added a further four, as operator, awarded under the UK's 26th Licensing Round.”

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