Faroe raises stakes in Blane, Enoch fields with Roc Oil deal
ABERDEEN, United Kingdom -- Faroe Petroleum has announced the conditional acquisition of Roc Oil (GB Holdings) Limited, which holds a 12.5006% interest in the Blane Unit in the UK North Sea and a 12.00% interest in the Enoch Unit in the UK North Sea, from Roc Oil (Europe) Limited, a subsidiary of Roc Oil Company Limited.
Blane was discovered in 1989, and is located on the Central Graben of the UK Continental Shelf, extending into the Norwegian sector. Production commenced in September 2007 from a Tertiary Palaeocene Forties sands reservoir with a structural closure.
The oil is of high quality with 42° API. The field has been developed as a subsea tie-back to the BP-operated Ula platform, located in the Norwegian Continental Shelf (34 km to the northeast), and comprises two horizontal production wells with gas lift and one water injection well. Blane is a low operating cost producing field with upside potential in the existing reserves and the potential for further in-fill drilling.
Enoch field has been developed as a single well subsea tie-back to the Marathon-operated Brae field. The field was closed in due to a leak at the subsea well-head, which has since been repaired, and the field is currently planned to be brought back on production during second-half 2015.
The acquisition is expected to complete before the year-end and is subject to UK regulatory approval and a waiver of certain conditions by the Blane Unit joint venture partners.
The acquisition consideration is made up of $17 million, plus up to a further $3 million payment deferred contingent upon certain Blane field performance targets being met in the second half of 2015.
Post-acquisition, Faroe will hold, in aggregate, a 30.5% non-operated interest in the Blane Unit and a 13.86% non-operated interest in the Enoch Unit.
“We are very pleased to announce this acquisition, which increases our stake in the low cost, high quality and long field life Blane asset,” Graham Stewart, chief executive of Faroe Petroleum, said. “Blane offers significant upside potential in the form of increasing reserves and production as well as in extending field life.”
