SHARES in Aberdeen-based Faroe Petroleum have fallen four per cent after the company suffered a drilling disappointment amid renewed uncertainty about the outlook for the crude price.
The oil and gas company said a well on the Rungne prospect off Norway had made a find but it looked unlikely to be commercially viable in isolation.
The results represent a reverse for Faroe in its attempts to make finds closed to existing fields, which it would hope to be able to bring into production relatively quickly.
Industry watchers hope independents could help boost lagging exploration rates in the UK North Sea by following similar strategies on acreage acquired from bigger fish.
When Aim-listed Faroe started drilling Rungne in the Norwegian Sea in October it said the well offered significant upside potential in one of the company’s core areas.
Chief executive Graham Stewart shrugged off the reverse on Rungne yesterday noting the firm has an active drilling programme.
“In a six well exploration programme some disappointing outcomes are inevitable,” he said.
The company is awaiting the results of the Agar Plantain well it drilled off Shetland with private equity-backed Azinor catalyst.
The response to the latest UK licensing round indicated interest in exploration had increased following the rally in the crude price since late 2016, when major exporters agreed to curb output. The number of blocks applied for rose 50% compared with the round held in that year.
But interest may weaken again as a result of the renewed fall in the oil price since last month.
Brent crude has fallen from a four year high of $86 per barrel to around $67.50/bbl amid booming production in the USA and signs demand is easing.
Shares in Faroe Petroleum closed down 5.2p at 129p.
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