Offshore staff

ABERDEEN, Scotland -- A joint venture to explore the UK North Sea has formed between Faroe Petroleum and Liberty Energy Holdings LLC.

Liberty is a subsidiary of Liberty Mutual Group insurance. Faroe is an independent oil and gas company with operations in the Faroe Islands and UK west of the Shetland Islands.

Under the agreement, Faroe will be the operator with at least 20% participation and LEH will provide most of the funding.

"In the face of increasing competition for attractive lower risk projects, this joint venture represents a very exciting opportunity for Faroe to accelerate value creation in the North Sea," said Graham Stewart, CEO.

"We have designed this new business model to give us an edge in acquiring substantial interests in appraisal and development properties in the UK North Sea, and are delighted to have attracted such a strong and reputable corporation as major co-venturer. We are already considering a number of opportunities together, and look forward to reporting progress in the near term."

9/6/06