FAROE Petroleum has suffered a setback after what it described as a high potential well off Norway proved to be dry.
Aberdeen-based Faroe said the Bister well in the Norwegian Sea would be plugged and abandoned after failing to find oil or gas at the target locations.
The well was one of four that Faroe plans to drill off Norway this year. In its annual results announcement in March, the company said these formed a strong programme of high-potential wells.
However, Faroe's chief executive, Graham Stewart, put a brave face on the result.
He said: ""Whilst the results for the Bister exploration well are disappointing, this was an opportunity to add further resources to an already resource rich licence."
The Bister well was drilled on a licence that contains the Snilehorn discovery that Faroe made in 2013 and the producing Hyme field.
Mr Sewart noted that Faroe made the Skirne gas discovery with the first well drilled off Norway this year.
He added: "During the coming months we also expect to start drilling the first of two follow-up wells at the significant Pil discovery on the Blink and Boomerang prospects."
The company may take comfort from the fact it considered the Bister well to be a low cost exercise.
In the results announcement Mr Stewart noted that Norway provides generous tax breaks for oil and gas firms, which can recover 78 per cent of qualifying exploration costs.
The company has focused exploration activity in Norway.
However, Mr Stewart has underlined its appetite to acquire more producing assets in the UK.
He has said that cuts in North Sea taxes included in The Budget in March would make the company more likely to invest in the area.
Faroe said it will use the results of the well to inform further work on a licence that still contains promising exploration targets.
Faroe had a 7.5 per cent stake in the Bister well, which was operated by Norway's Statoil.
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