For a company with as many moving parts as Faroe Petroleum (FPM), results for a period that concluded almost three months ago are somewhat irrelevant. Not only was Brent crude - that key indicator of any oil company's health - stuck beneath $45 (£35) a barrel for most of the period, but two major events have occurred since the end of June.
The first was July's announcement that the low-cost sidetrack appraisal well at the 50 per cent-owned Brasse prospect in the Norwegian North Sea had led to the discovery of a 25-metre gross oil column and a revision in the gross volumes of recoverable hydrocarbons to 43m-80m barrels of oil equivalent (mmboe). A subsequent £62m fundraising and open offer will be used to develop the asset as quickly as possible, and pay for four producing Norwegian fields acquired from DONG Energy for a bargain $3.50 a barrel.
These developments mean the underwhelming first-half production of 9,030 boepd - down from 10,971 boepd in 2015 and at higher operating costs thanks to the well shut-ins and extra tariff charges - are set to reverse in the second half. In fact, with the fields acquired from DONG already performing better than first expected, Faroe used the interims to raise maximum full-year production guidance to 18,000 boepd.
Prior to these results, analysts at Peel Hunt were forecasting an adjusted pre-tax loss of £8.4m and a loss per share of 2.9p this year, narrowing to losses of £0.6m and 0.2p in 2017.
FAROE PETROLEUM (FPM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 66p | MARKET VALUE: | £241m | |
| TOUCH: | 66-66.5p | 12-MONTH HIGH: | 82p | LOW: 42p |
| DIVIDEND YIELD: | nil | PE RATIO: | na | |
| NET ASSET VALUE: | 53p* | NET CASH: | £83.9m | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 51.1 | 0.37 | -2.49 | nil |
| 2016 | 23.1 | -35.9 | -4.85 | nil |
| % change | -55 | - | - | - |
Ex-div: na Payment: na *Includes intangible assets of £89m, or 24p a share. | ||||
