The Aberdeen-based firm reversed its recent dry spell in Norwegian waters by announcing the discovery of between six million and 25 million barrels of recoverable oil at the Bue side-track well.
In a stock market update, Faroe said it had also found more oil than expected at the Pil sidetrack well, which it discovered in March this year.
It has upped its previous estimate of between 50 million and 170 million barrels to between 72 million and 172 million barrels.
Chief executive Graham Stewart predicted that the two sites could now provide between 80 and 200 million barrels.
He added that the firm would be assessing "further upside potential" in its licence for the area, located around 33 kilometres away from the Njord platform in which the company holds a 7.5 per cent stake.
The Njord field is one of three Norwegian sites where Faroe is currently very active.
Its North Sea oil programme, which also encompasses the Blane oil field in the UK, produced an estimated 6,059 barrels of oil equivalent per day (boepd) in 2013.
The company believes it is on track to produce between 7,000 and 10,000 boepd in 2014, despite being forced to abandon both its Butch South West and Butch East operations in the last two months when both wells proved to be dry.
Colin Smith, analyst at Panmure Gordon, said the revised estimate at the Pil well amounted to an 11 per cent uplift in available resources.
He said: "We estimate the valuation impact of this announcement at around 10p per share, although we leave our NAV and price target unchanged pending a full review. Faroe is our top pick in the sector with significant upside of over 70 per cent to our 204p target price."
He added that the company is now well funded after it raised £65 million in a cash call in June, well above the £45 million target originally proposed. The news initially lifted Faroe's share price but it fell back and closed down 0.75p at 118p.