Faroe Petroleum has signed an agreement to sell 17.5% working interest in the Fenja development in PL586 in the Norwegian Sea to Suncor Energy Norge.

The $54.5m transaction is expected to cut Faroe’s future capital expenditure on Fenja to around £70m.

Following the transaction, Faroe will retain a 7.5% stake in Fenja.

Faroe Petroleum CEO Graham Stewart said: “This transaction marks a major milestone for Faroe, which has taken Fenja through exploration and appraisal drilling to predevelopment work and validates Faroe’s business model of generating tangible shareholder returns from its exploration portfolio.

“Having held a significant interest in PL586 from its discovery, Faroe has now generated cash returns through a partial-monetisation, while still giving shareholders exposure to future cash-flows from a continuing interest in this high-quality project.”

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.
“Having held a significant interest in PL586 from its discovery, Faroe has now generated cash returns through a partial-monetisation.”

The divestment will allow the company to maintain a strong balance sheet, in addition to ensuring funding across its portfolio of Norwegian field developments.

With the proposed sale, Faroe will be able to align its remaining interest in Fenja with its existing 7.5% working interest in the Greater Njord Area.

The field is operated by VNG Norge and is estimated to have total gross recoverable reserves of around 97 million barrels of oil equivalent.

Scheduled to complete during the first half of this year, the transaction is conditional upon customary conditions, including regulatory approval of the transfer and approval of the Fenja plan for development and operation (PDO) by the Norwegian Ministry of Petroleum and Energy.

The PDO was submitted on 19 December last year.

In a separate deal, Suncor has signed a $730m deal to acquire Mocal Energy’s 5% stake in the Syncrude joint venture in Fort McMurray, Alberta, Canada, increasing its interest from 53.74% to 58.74%.