Full-year revenue almost doubles at Faroe Petroleum

published 26 March 2013

Revenue almost doubled in the year ended December 31st at AIM-listed independent oil and gas exploration company Faroe Petroleum underpinned by the effects of acquisitions made in the previous year.

The value of revenue rose to £158.8m, up 97.9% from £80.2m one year earlier.

The group said that the significant increase reflected the full year effect of acquisitions of the Brage, Njord, Ringhorne East and Jotun fields in Norway made in 2011, as well as continuing high oil prices.

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Gross profit for the year was £61.8m, up 120.7% from the £28m recorded in 2011.

The group's reported loss before tax was £29.0m compared to a profit of £14.3m in 2011. The loss after tax was £5.2m, compared to a profit of £47.4m in 2011.

The group said that this was due principally to the exceptional gain of £40.0m on the disposal of its stake in the Maria oil field discovery in Norway.

Oil production more than doublesTotal average production was approximately 6,900 barrels of oil equivalent per day (boepd) in 2012, up from the 2,500 boepd average production in 2011.

In addition, the group's portfolio increased to over 60 licences with 16 awards, with high equity stakes.

In the UK, seven new licences were recorded, including three operatorships. In Norway, eight new licences were posted including three operatorships post year-end and in Iceland, a frontier licence as operator was recorded.

The group reported that it has 2013 capital expenditure of approximately £170m, including around £120m on exploration -pre-tax rebate in Norway- and approximately £50m on developments and producing fields - all fully funded.

It said that 2013 production guidance of 7,000-to-9,000 boepd was targeted and the group is assessing the potential to acquire further production to enhance tax efficient cash flow.

CEO: year saw 'dramatic boost to production'Graham Stewart, Chief Executive Officer of Faroe Petroleum, commented: "This has been a particularly active year for the company, with a dramatic boost to production, and cash flow, together with a steady, fully funded exploration programme."

Going, forwards, he said: "2013 kicked off with a significant discovery at Rodriquez, and our portfolio of exploration licences ensures Faroe has an exciting and material drilling programme ahead with five firm high impact exploration and appraisal wells planned; including the Darwin prospect in the Barents Sea and a continuing programme of production in-fill wells. We look forward to an exciting period ahead."

Faroe Petroleum's share price was unchanged at 147.50p at 10:01 on Tuesday.