Investors in Faroe Petroleum (FPM) reacted to the announcement that the North Sea oil driller had made a discovery in the main bore of its Boomerang exploration by sending the shares down 5 per cent. Pre-drill expectations had been higher than the 13 to 31 million barrels of recoverable volumes discovered, and an exploration side-track revealed poor reservoir quality with no indications of movable oil.
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Faroe will now plug the Boomerang well, and move its rig 6km to the north-east to drill the Blink prospect. Broker Peel Hunt gives that separate structural and stratigraphic prospect an unrisked asset value of 24.6p, and has set a target price of 125p for Faroe.