Faroe Petroleum has acquired a 90% equity stake in part-blocks 14/21 and 14/22 in the UK Central North Sea from Shell and ExxonMobil. The blocks, covering an area of over 217 sq km, are in 140 m of water on the Halibut Horst, in between the producing Blake and Claymore oil fields. This represents Faroe Petroleum's first foray into the North Sea. The company's previous focus was the Atlantic Margin.

Faroe believes the acreage, though undrilled, is highly prospective, with numerous recorded hydrocarbon seeps. Several large target structures have been identified by seismic. Drilling should be relatively low cost with shallow reservoir depths under 2,000 m. Any commercial finds could be developed though nearby processing and export infrastructure.

Shell will remain a 10% partner in the license, and will remain as operator until Faroe Petroleum assumes command. The license work program involves acquiring 3D seismic from PGS' Quad 14-99 MC 3D mega-survey, which will be re-processed to help choose drilling locations.

2/10/05