Reports on two oil and gas finds in the Norwegian North Sea added fuel to Faroe Petroleum’s share price yesterday as it rose to its highest level in a year.
Shares closed 8.3% up at 136.5p after the Aberdeen oil and gas explorer revealed a successful test on the Pil exploration site and a new gas and condensate discovery in the Solberg well.
VNG’s production tests on the Pil exploration well, 20 miles south-west of the Njord field, have “exceeded expectations”.
The find, drilled by the Transocean Arctic, is now thought to contain up to 170million barrels of oil and gas reserves, with further drilling being carried out to see if that figure could be higher.
Graham Stewart, chief executive of Faroe, which has a 25% stake in the prospect, said initial tests on the site had proved highly successful. “The Pil well builds substantially on Faroe’s discovered volumes located within tie-back distance of our Njord infrastructure,” he said.
“We look forward to the results of the two sidetracks and proving up further potential on this licence.
“This is an outstanding result for Faroe’s world-class exploration team.”
At the same time, Faroe said the discovery in the Solberg well, in which it has a 20% stake, could be as much as 1million to 5million barrels of condensate and 30-120billion standard cubic feet of gas.
Mr Stewart added: “Together with our notable recent discoveries on Snilehorn and Pil, Faroe’s exploration successes provide clear vindication of our longstanding strategy to take material stakes in high-impact exploration prospects offering significant value to our shareholders.”
Norway’s Petroleum Directorate said the wildcat well on Pil had found oil of better-than-expected quality after uncovering a 740ft hydrocarbon column.
Rocksource, which holds a 15% stake in the Pil project, said it was excited by the find.
“The test result has confirmed excellent reservoir properties, and with the operator’s resource estimates we are confident that Pil is a commercial discovery,” said chief executive Chris Spencer.
“The upside potential, both within the Pil closure and in follow-up prospectivity within the licence, means that PL 586 could be a company-maker for Rocksource.”
Work will now be carried out on sidetrack wells to assess the full potential of neighbouring targets.