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Faroe Petroleum PLC FPM Relinquishment of West of Shetland P1161 Licence

  Faroe Petroleum PLC (FPM) - Relinquishment of West of Shetland P1161 Licence

RNS Number : 1548Q
Faroe Petroleum PLC
02 November 2012




2 November 2012



                Faroe Petroleum plc ("Faroe" or the "Company")

                                      

               Relinquishment of West of Shetland P1161Licence

Faroe Petroleum plc, the independent oil and gas company focusing  principally 
on exploration, appraisal and production opportunities in the Atlantic Margin,
the North Sea and Norway, announces that it intends to cease operations on the
P1161licence (Freya and  Fulla), west  of Shetland (Faroe  Petroleum 50%  and 
operator).

In July 2011 the Company drilled  an exploration well (206/5a-3) on the  Fulla 
prospect and the targeted Clair and  Whiting reservoir sands were found to  be 
oil-bearing. Extensive modelling has since  been undertaken to establish  the 
resource potential and  assess a  means of economically  developing the  Fulla 
discovery in conjunction with the 1980 Freya discovery, located immediately to
the south in the  adjoining Block 206/10a. The  results of this work  confirm 
relatively poor oil quality, smaller  than expected resource size and  limited 
access to infrastructure. No economically  viable solution has been found  to 
bring these  discoveries to  development at  this time,  and consequently  the 
licence will be relinquished.

Graham Stewart, Chief Executive of Faroe Petroleum plc, commented:

"Faroe  Petroleum  adheres  to  a  strict  policy  of  protecting  shareholder 
interests such that  substantial development investments  are only made  where 
there is good potential for an attractive return, and unfortunately the  P1161 
licence does not satisfy  our economic criteria. The  high potential West  of 
Shetlands area continues to be a  core element of Faroe Petroleum's  strategy. 
The Company  has  considerable  knowledge and  experience  in  this  important 
region, holding a large portfolio position there, including the Glenlivet  and 
Tornado gas discoveries, which are progressing towards development.

"In addition, the Company announced on 21 September this year the  acquisition 
of an  interest in  the producing  East Foinaven  oil field,  and  provisional 
awards of exploration licences  were also announced  last week which  included 
four in the  west of  Shetlands area,  of which  three are  operated by  Faroe 
Petroleum."

"In the meantime we  await the results of  two UK exploration wells  currently 
being drilled, namely  the N.Uist  well (6.25%)  (West of  Shetland) and  the, 
Spaniards East well (8.4%) (UK North Sea)."



For further information please contact:

                                                  

Faroe Petroleum plc            Tel: +44 1224 650 920

Graham Stewart, CEO                                


Panmure Gordon (UK) Limited   Tel: + 44 20 7886 2500

Katherine Roe/Callum Stewart                       


Oriel Securities Limited       Tel: +44 20 7710 7600

Michael Shaw/Ashton Clanfield


FTI Consulting                 Tel: +44 20 7831 3113

Billy Clegg/Edward Westropp





Notes to Editors

The Company  has, through  successive licence  applications and  acquisitions, 
built a  substantial  portfolio  of exploration,  appraisal,  development  and 
production assets across the Atlantic Margin,  the UK and Norwegian North  Sea 
and the Norwegian Sea. Faroe has extensive experience working with major  oil 
companies and its joint venture partners include BP, Chevron, DONG, ENI,  E.ON 
Ruhrgas, GDF, OMV, RWE Dea, Statoil and Wintershall.



The Company's  licence  portfolio provides  considerable  spread of  risk  and 
reward, encompassing over 50 licences located in the Atlantic margin (West  of 
Shetlands), the UK North Sea and  Norway. In addition Faroe has interests  in 
10 producing oil and gas fields in  the UK and Norway, including interests  in 
the Blane oil field in the UK  and the Brage, Hyme, Njord, Ringhorne East  and 
Jotun oil and gas fields in Norway.



Faroe Petroleum plc is quoted on the  AIM Market of London Stock Exchange  plc 
with offices in Aberdeen, Stavanger, London and Torshavn. The Company is  well 
financed with a fully funded drilling  programme and has a highly  experienced 
technical team at the leading  edge of seismic and geological  interpretation, 
reservoir engineering and field  development, focused on creating  exceptional 
value for its shareholders.



                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


MSCKMMGMVMDGZZM -0- Nov/02/2012 07:00 GMT
 
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