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Faroe Petroleum banks US$68mln as it completes Fenja field stake sale

“This transaction validates Faroe's business model of generating tangible and attractive shareholder returns from our exploration portfolio"
oil and gas operations
Faroe retains a 7.5% stake in the field development project

Faroe Petroleum plc (LON:FPM) told investors it has banked US$68mln as it has now completed the sale of a stake in the Fenja field development project, in the Norwegian Sea.

The proceeds comprise US$54.5mln deal consideration, plus an adjustment for capital spending on the asset since the transactions effective date, of 1 January 

2018.

It sold 17.5% of the project which is estimated to host between 80mln and 155mln barrels oil equivalent (the gross recoverable resource is estimated at 97mln barrels), and is expected to come online in early 2021. Faroe retains a 7.5% stake in Fenja.

READ:  Faroe Petroleum reveals record production rates

“This transaction validates Faroe's business model of generating tangible and attractive shareholder returns from our exploration portfolio,” said Graham Stewart, Faroe chief executive.

“As well as producing an immediate cash return, the transaction reduces Faroe's net capital expenditure on the Fenja development to approximately $96 million.

“This in turn gives us additional liquidity for our other high quality projects such as the Brasse development and ensures we are fully funded to reach our organic production growth target of 35,000 boepd.”

Stewart added: "Faroe remains confident in its potential to exceed this production growth target through additional organic developments and investments, in addition to potential M&A opportunities."

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