AIM-listed Faroe said the natural decline of oil fields, the deferral of capital expenditure and longer than scheduled maintenance on some assets means production will be at the lower side of guidance, which it stated at 7000 to 9000 boepd (barrels of oil equivalent per day) .
But Faroe, which is focused on the North Sea, Norway and the Atlantic margin, noted that the farm-out of the and Solberg wells in Norwegian waters will ease costs, while retaining material equity in the wells.
Spike Exploration Holdings AS and Concedo AS have acquired shares of 15% and 5% in Novus in exchange formpaying part of Faroe's costs linked to exploration. Faroe has retained a 30% stake post-farm-out.
Spike has also acquired a 10% share in the Solberg licence, again in part exchange for covering costs, leaving Faroe's stake at 20%.
Faroe noted that drilling will soon begin in several wells in the Norwegian Sea where it has large equity stakes. These include Snilehorn, a satellite to the Njord field (7.5% stake), Butch East and Butch South West (15%), Novus, Solberg and Pil (25%), a test prospect south of the producing Njord and Draugen fields.
Chief executive Graham Stuart said the wells have potential to yield "considerable shareholder value".
Shares in Faroe Petroleum closed down 4.50p at 129.25p.