Faroe to take charge of Ketch, Schooner in North Sea

Faroe Petroleum has agreed to pay $59 million for Tullow Oil’s operated interests in two producing gas fields in the UK southern North Sea.

Apr 30th, 2014

Offshore staff

ABERDEEN, UK – Faroe Petroleum has agreed to pay $59 million for Tullow Oil’s operated interests in two producing gas fields in the UK southern North Sea.

Assuming regulatory approval for the transaction, it would provide the UK independent’s first operated production.

Ketch and Schooner are in blocks 44/28b, 44/26a and 43/30a, 150 km (93 mi) from the ConocoPhillips-operated Theddlethorpe Gas Terminal on the Lincolnshire coast of eastern England.

Ketch was discovered in 1984 and Schooner three years later, with then-operator Shell bringing Schooner onstream in 1996 and Ketch in 1999. Both have been developed via normally unmanned platforms, currently managed by a third-party duty holder.

Their gas is exported via pipelines to the Caister Murdoch offshore complex and onward to Theddlethorpe and the UK’s national grid.

Early this year, their combined remaining reserves were estimated at 34 bcf (960 MMcm) of gas and 0.3 MMbbl of condensate.

Faroe could end up paying Tullow up to $16.8 million more if up to 10 bcf (280 MMcm) gross incremental gas is produced from a specific reservoir compartment on Schooner that was developed by the 2013 SA11 well. This well was recently impacted by salt deposition in the wellbore, although it has since resumed normal production following treatment.

Additionally, Faroe has identified potential areas it plans to work on to further boost reserves and extend field life, some of which are subject to contingent royalties. If the Schooner partners elect to explore and develop the Schooner C and Schooner Far NW targets, Tullow could net royalty payments of up to $155 million.

Tullow says it will continue to market its remaining southern North Sea gas assets in the UK and in the Dutch North Sea, where earlier this year it discovered a 72-m (236-ft) gas column with a well on theVincent structure.

Offshore Norway, Tullow is participating in the current Hanssen exploration well targeting a prospect directly west of last year’sWisting Central discovery, which opened a light oil play in the Hoop-Maud basin in the Barents Sea.

The Tullow-operated Gotama exploration well started drilling earlier this week on license PL 550.

04/30/2014

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