Faroe Petroleum is increasing its exposure to the UK North Sea by acquiring stakes in two gas fields for £35m with a further £100m potentially payable in future.
The Aberdeen-based firm is buying majority stakes in the Ketch and Schooner fields off the Lincolnshire coast from Tullow Oil in a deal that will result in a big increase in its production.
The deal reflects Faroe’s enthusiasm for a core area in which it has amassed a big portfolio of exploration and production assets through acquisitions and success in licensing rounds.
Faroe expects its share of production from Ketch and Schooner to average 3,000 to 4,000 barrels oil equivalent daily.
Faroe will pay an initial £35m with a further £10m payable if production from a recently developed area of Schooneer meets targets. It will pay up to £92m royalties depending on the output from two as yet undeveloped areas of Schooner.
