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Faroe Petroleum has a substantial portfolio of exploration, appraisal and development assets across the Atlantic Margin, the UK and Norwegian North Sea and the Norwegian Sea.
Faroe Petroleum joint venture partners include BP, Chevron, ConocoPhillips, DONG, DSM, Eni, E.ON Ruhrgas, GDF, Oilexco, OMV, RWE, Shell and Statoil all of which...
Faroe Petroleum: Broker Arbuthnot rates firm a "buy" and ups target priceJuly 12 2011, 3:27pm
Faroe Petroleum's (LON:FPM) asset swap with Petoro is worth an extra 9 pence a share, according to broker Arbuthnot.
The City broker recommends a "buy" for the stock and has upped its price target 9 pence to 274 pence from 265 pence (current share price: 164.25 pence).
Analyst Dougie Youngson said: "We feel today's news further highlights the positive impact the Petoro transaction has had on Faroe's operations,by contributing higher production rates and additional reserves."
The firm today announced that its asset swap with Petoro has been approved by the Norwegian parliament and the deal is expected to complete this autumn.
Faroe's 30 percent interest in the Maria oil discovery was swapped with Petoro for interests in the Norwegian firm's Njord, Brage and Ringhorne East and Jotun production assets.
As a result, Faroe will take control of assets that produced at an average rate of 8,400 barrels of oil equivalent per day (boepd) during the first six months of the year.
This output, which was ahead of expectations, was achieved despite a technical problem at Njord, which took several wells out of production, it emerged.
At the time of the swap announcement, Faroe said that the assets would add more than 7,300 boepd to its average 2011 production, taking it to 9,200 boepd.
Faroe’s interests will include a 7.5 percent stake in the Hyme offshore oil field to the east of Njord, whose field development plan (FDP) has already been approved by Norwegian authorities. First oil from Hyme is expected in early 2013.
The company also announced today that the firm has gained an additional 3.2 million barrels of net reserves at Njord because of the sanctioning of two new projects.
Analyst Youngson said that Arbuthnot's model provided for an additional 3 pence for the increased production and 6 pence for the uplift in reserves at Njord - making a total of nine pence to add to the target price.