NORTH Sea-focused Faroe Petroleum has said it is keen to buy producing oil and gas assets in the area, where fields may be available at lower cost following the slump in the oil price.

Led by chief executive Graham Stewart, the company said it continues to seek value-enhancing production acquisitions in order to capitalise on market conditions to build value.

"Faroe is well placed to consider capitalising on potentially attractive asset opportunities which may become available in the period ahead," said Mr Stewart.

The company has cash in the bank and has limited the impact of the crude price fall by selling a significant amount of production forward at prices well above current levels.

The comments by Aberdeen-based Faroe highlight the gulf that is emerging in the North Sea between firms that have strong balance sheets and profitable production and those with limited resources, which may face big challenges surviving the downturn.

Recent cost-cutting moves by giants such as BP and Talisman Sinopec that involved hundreds of job losses highlight the pressure that the near 60 per cent fall in the price of crude since June has put on earnings at even the biggest firms.

Sector watchers say a large number of North Sea assets have been put up for sale.

The price of fields has fallen since the oil price went into reverse in June. This followed a long period of high prices that had encouraged firms to invest in the North Sea.

Tom Cross, who runs another prominent Scottish oil and gas independent, Parkmead Group, said recently: "The decrease in the oil price will result in more acquisition opportunities becoming available."

In an update on operations in the year to December Faroe said it had finished the year in good shape with around £70m net cash and $210m (£140m) undrawn borrowing facilities.

The company has limited commitments to fund work on new developments.

Faroe, which has producing assets in UK and Norwegian waters, has sold 268,000 barrels of this year's oil output at $90 per barrel.

Brent crude traded at $48.54 per barrel yesterday, compared with $115/bbl in June.

Faroe expects production to average 8,000-10,000 barrels oil equivalent daily this year, compared with around 9,100 boed in 2014.

AIM-listed Faroe said it expects the operating cost of each barrel of oil equivalent it produces to average $30/bbl this year. It should make money on its output even if prices remain at current lows.

The company said it has lined up an exciting and fully-funded drilling programme of low cost, high impact exploration wells for this year.

It expects to drill four wells, all off Norway. It made two finds off the country last year.

On Wednesday Mr Stewart highlighted the effectiveness of Norway's efforts to boost oil and gas exploration activity. These include refunding 78 per cent of qualifying exploration costs.

George Osborne faces pressure to do more to encourage firms to increase drilling in UK waters.

Analysts at First Energy Capital wrote in a note: "With its strong balance sheet, relative low risk/high impact exploration and cashflow covering expenditures, we continue to like Faroe."