Faroe Petroleum set for strong H2 after maintenance slows production

Independent oil and gas company Faroe Petroleum on Wednesday narrowed its annual production expectations after bringing all wells back online following a busy maintenance schedule in the first half of the year.

The exploration, appraisal and production focused company narrowed its full year guidance range to 12,000-to-14,000 barrels of oil equivalent per day (boepd) following a temporary loss of production from the Trym field due to an equipment fault and the effects of second quarter maintenance related shutdowns of the North Sea’s Ula hub and Brage field.

The first half production rate averaged at 12,402 boepd but currently sits at 15,200 following maintenance works.

Graham Stewart, chief executive of Faroe Petroleum, said: "Faroe's production portfolio has seen a very active period of technical and investment driven activity. Although this reduced first half average production it will lead to increased productivity in the second half as well as the years ahead, as we invest heavily in our existing fields as well as several new fields."

In April, the AIM traded company made the Iris Hades discovery which added 42m barrels of oil equivalent of contingent resources, with Faroe now committed to a drill schedule comprising six wells.

First-half EBITDAX amounted to £76m and Faroe’s net cash stood at £84m at 30 June, an 11% increase over 31 December, as a result of higher commodity prices and the sale of a 17.5% interest in the Fenja development for cash consideration of £40.4m.

"With a fully funded programme ahead, investing across our business, and at the bottom of the cycle, I remain confident in our ability to deliver our stated production growth target of 35,000 boepd by 2021/22, designed to generate material increase in cash-flow and shareholder value," said Stewart.

Faroe Petroleum shares were up 0.86% at 140.20p at 0934 BST.