Faroe buoyed by Snilehorn

The shutdowns in the Norwegian sector resulted in Faroe booking a 16 per cent fall in cash profits (pre exploration expenditure) to £80.5m. Realised prices held up over the year, but the average daily production rate fell to 6,059 boe, from about 6,900 a year earlier. Both Njord and Hyme are expected to come back on stream this summer, prompting management to reiterate production guidance of 4,000-6,000 boe.

After a largely disappointing 2012, Faroe was able to announce a significant gas and condensate discovery on the offshore Rodriguez/Solberg prospect in Norway. Appraisal at Solberg is ongoing, but perhaps the most encouraging result came in December with the Snilehorn oil discovery, where volumes were well in excess of pre-drill estimates. Snilehorn has been fast-tracked for development by Norwegian energy giant Statoil (as operator of the project). After the year-end, Faroe was also able to reveal an oil and gas discovery at the Pil well in the Greater Njord area. Production testing is currently taking place ahead of a possible side-track drilling programme to assess the full extent of the resource.