Faroe Petroleum drops on disappointing North Sea well

Faroe Petroleum’s shares dropped on Wednesday after its 40%-owned Rungne exploration well in the Norwegian North Sea came up with noncommercial levels of hydrocarbons.

The oil and gas exploration and production company said that the well, part of a six well exploration programme, was drilled with the Transocean Arctic rig and targeted the Middle Jurassic Oseberg formation.

Graham Stewart, chief executive of Faroe Petroleum, said: "In a six well exploration programme some disappointing outcomes are inevitable. Although no hydrocarbons were present in the main Oseberg target we are pleased to have encountered hydrocarbons in the secondary Ness target which provides new data."

Drillers did encounter gas and condensate reserves in the secondarily targeted Ness formation equating to 2.7-17m recoverable barrels of oil equivalent, though the low volumes mean Ness is unlikely to be “commercial in isolation”.

"In addition to the ongoing Agar/Plantain well, results from which are expected shortly, Faroe's exploration programme will continue over the remainder of the year with two further committed exploration wells in Norway: the Brasse East (Faroe-operated) and Cassidy wells," said Stewart.

Faroe’s shares were down 7.45% at 124.80p at 0926 GMT.