Faroe, Shell and Spirit partner in Edinburgh

1/16/2019

ABERDEEN -- Faroe Petroleum, the independent oil and gas company focusing principally on exploration, appraisal and production opportunities in Norway and the UK, is pleased to announce its partnership with subsidiaries of Royal Dutch Shell plc and Spirit Energy Limited following the award of PL 969 in the recent APA licensing round with the intention to advance the large, cross-border Edinburgh prospect towards a drill decision during 2019.

Through a series of arrangements entered into during 2018, the license partners have agreed to equalize equity in UK Block 30/14a (Edinburgh Area) and UK Block 30/14b on the same basis as the award in the adjacent Norwegian Blocks 1/6 and 1/9 (PL 969) (together the “Edinburgh Area”) as follows:

Company 30/14a (UK) 30/14b (UK) 1/9, 1/9 (NO)
Faroe 45% 45% 45%
Shell 40% 40% 40%
Spirit 15% 15% 15%

The equity equalization remains subject to certain terms and conditions between the parties and awaits deal completion of the acquisition related to UK Block 30/14a (Edinburgh Area) from Total Oil UK Limited. It has been agreed by the parties that Faroe will operate the Edinburgh Area licenses up until a final well decision is taken by the license partners, after which Shell will become license operator.

The Edinburgh Area contains the large Edinburgh prospect, which straddles the UK/Norway border in the Central North Sea at the south eastern end of the prolific Josephine Ridge area. The structure is a large, tilted Mesozoic fault block, and is considered to be one of the largest remaining undrilled structures in the Central North Sea covering an area of over 40 km2. The prospective reservoirs include the Upper Jurassic Ula age-equivalent (Freshney and Fulmar) and Triassic Skagerrak formations.

On a preliminary, unaudited basis, Faroe’s management estimates the Edinburgh prospect to have material volumes with potential for standalone development.

Graham Stewart, chief executive of Faroe Petroleum, commented:

“We are pleased to announce the alignment of equity in the Edinburgh Area among such a strong partnership, having worked to resolve the commercial impediments in the area for over eight years. The partnership’s combined operating experience in both the UK and Norway represents a distinct advantage in bringing the drilling of this high impact exploration prospect closer to fruition. We look forward to working with the respective UK and Norwegian authorities to progress this exciting cross-border opportunity.”

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