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Topaz comes on-stream to boost Faroe

Fiona Bond
19.11.09 10:48


Oil and gas player Faroe Petroleum (FPM) is looking to up its production rates after announcing on Thursday that the Topaz Gas Field has come on stream.

The gas field, located in the UK Southern Gas Basin, is set to reach initial production rates of 30 million standard cubic feet of gas per day. Although production at the gas field has commenced, Faroe added that it was not yet operating at full choke.

AIM-listed Faroe, which focuses on the Atlantic margin, the North Sea and Norway, stands to net 375 barrels of oil equivalent per day (boepd) through its 7.5% working interest in the gas field once the well is in full swing.

The Topaz gas field is tied back to the Schooner gas field platform, in which Faroe also possess a 4.3% interest.

In a further boost to its production rates, Faroe has finalised its exchange with Dong E&P Norge for its 10% interest in the Trym development.

Through the deal, Faroe will acquire a 9.3% interest in the producing Norwegian Glitne oil field and a 1.86% interest in the producing Enoch field located on the Norway/UK median line.

Dong will pay up to £8.3 million as part of the deal, with a further £2 million payable to Faroe once certain production targets are met by the Trym Field.

Glitne and Enoch fields' combined gross production this year to date has averaged 12,000 barrels, leaving Faroe to benefit from 700 boepd.

The completion of the deal marks the end of process which started in May when the pair first announced their intentions to swap oil interests.

Graham Stewart, chief executive of Faroe, commented: "We are pleased to announce first gas from the Topaz Gas Field and completion of our swap deal with Dong to add interests in the Glitne and Enoch oil fields.

"This is an exciting period for the company, with increasing production contributing towards the cost of the company's continuing exploration programme."

Combined with its existing fields, Faroe's latest acquisitions will push the company's overall production to in excess of 2,000 boepd.

The company recently made two discoveries at its Glenlivet and Tornado prospects, west of Shetland, which whet its appetite to embark on a further five, high-impact exploration wells over the next year.

The company's share price fell 0.9% to 135p.

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