Faroe Petroleum acquires new interests in Shetland

published 21 September 2012

Faroe Petroleum, an independent oil and gas company, is acquiring a 10 per cent non-operated interest in the East Foinaven Field and a 0.5 per cent interest in the West of Shetland Pipeline System from Marubeni Oil & Gas.

The interests will be acquired for $32m in cash, but this will be reduced to take account of working capital adjustments for net income from the sale of hydrocarbons from the field during the period.

Faroe will fund the acquisition using exisiting cash resources.

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The BP operated East Foinaven Field is located in blocks 204/24a,25b in the Atlantic Margin 190 kilometres west of Shetland.

Graham Stewart, Chief Executive of Faroe Petroleum, said: "We are very pleased to further broaden our production portfolio through the acquisition of the East Foinaven interest which boosts and continues to diversify our oil and gas revenue.

"East Foinaven is a good quality producing field which provides significant upside potential from one of our core areas. The transaction is very tax efficient for Faroe Petroleum, providing shelter for both past and future tax losses in the UK and is in line with our strategy to grow our production portfolio to continue the funding of our exploration programme."

The share price rose 0.83% to 152p by 11:48.