2017 Highlights Continuing to deliver Corporate DONG asset reserve growth 60% since acquisition DONG asset acquisition integrated Leveraging technical team across asset base Bond issue and Fenja part-sale brings financing…
Faroe Petroleum Unique strategic position 12 principal fields across 4 hubs/areas High quality, diversified 2P reserves: 98 mmboe, 79% oil (YE17) 1 pan-North Sea asset base Production: 14,300 (FY17)2 Funded growth potential to…
Reserves Summary Proved & probable reserves year end 2017 Reserve Reconciliation Reserve Split by Hub/Area (mmboe) (mmboe) UK 4 Ula gas 32 21% 114 36 98 oil 98 79% 81 Brasse 25 Njord YE16 Production Revisions & 2C…
Delivery through the drillbit Reserves evolution 2P Reserve Growth 2013-2018 (mmboe) 98 64% Discoveries (Transfer from 2C) 81 61 Existing portfolio & 36% acquisitions 19 (net of production) 2013 2014 2015 2016…
Visible, organic production growth with upside Fully funded for organic projects, additional infill upside 50,000 Infill wells, Fogelberg, Oselvar redevelopment, Trym South Production Gross (boepd) Margin /boe…
Key catalysts 2018 Value driving events over next 12 months 2018 2019 Q1 Q2 Q3 Q4 H1 Tambar infills Development Production & Brage infills Brasse DG2 and PDO Fenja PDO approval1 Oda first oil Iris/Hades Exploration &…
Focus 2018 Summary Continue growth in resources base Leverage operatorship capability to grow the business Work to enhance the asset base further Deliver Brasse concept selection and progress towards PDO submission Progress D&P…
Funding and 2018 guidance
Delivering fully funded growth A finance-focused 2017 Production 14,300 boepd, upper end of guidance Strong cash flow Stronger commodity prices (55.2/bbl realised oil price) from production Avr. Opex 26.5/boe, in-line with…
Operational growth model Fully funded for future growth Faroe investment evolution1 Produce Explore 33% 31% 79% Supplemented by Develop accretive M&A Discover 67% 69% Monetise Appraise 21% 2016 2017 2018…
Strong financial foundation to unlock value Diversified capital structure and financial flexibility Exploration success driving development capex Seek to manage exposure to individual projects Healthy Operatorship important factor…
Capital structure and liquidity Maximising debt availability Reserves based lending facility Total Liquidity1 ( million) 250 million facility Maturity July 2023, amortisation starts 2020 Undrawn Currently undrawn with availability…
Hedging Prudent risk management Commodity hedging 2018 Q1 2019 Maintain active hedging programme to reduce risk and Oil support RBL availability Use put options to keep full upside exposure Production hedged (%) 23% 10% Foreign…
2018 guidance Summary Njord Area Item Unit 2018 guidance Production boe/d 12,000 15,000 Opex* /boe 23 27 Brasse Area Capex million 175 Exploration cost (pre-tax) million 80 Ula Area Decommissioning cost million 13 * Set to…
2018 guidance (contd) Capex Greater Njord Area Split by Area Fenja detailed engineering and fabrication ( million) Njord upgrades Njord A and Njord B Njord Bauge detailed engineering, contracts for marine Area Brasse operations…
2018 guidance (contd) Exploration and decommissioning Exploration Costs Decommissioning Costs ( million) ( million) Pre- development Oselvar 6 10 Drilling & testing 80 million 13 million 53 17 2 Other Seismic & Other 5…
Project overview Pipeline of high quality projects Production Net Net Plateau Net Capex Project Operator W.I. Opex (/boe) start mmboe production (boepd) m1 Tambar Aker BP 45% 2018 12.4 4,500 60 10 15 development Oda Spirit 15%…
Conclusions Fully funded for future growth Faroe has maintained a strong balance sheet through the cycle Expect to start drawing on the RBL during 2018 Borrowing base expected to increase as a result of inclusion of Fenja and as…
Delivering Production Growth: Ula
Ula Area Overview Significant remaining potential Ula field (Faroe, 20%) Area infrastructure hub Significant remaining life Benefit from surrounding investment Tambar (Faroe, 45%) Wellhead platform tied back to Ula Excellent…
Ula Core Area Delivering growth projects Ula field (Faroe 20%, Operator: AkerBP) Ula Q Ula D Ula P - Power upgrade - Drilling options - Oda modifications - New lifeboats - infill wells - TAL project
Tambar field Activity update Faroe 45%, Operator: AkerBP Investment programme driving value Two infill wells drilled and ready for production Artificial Lift project on schedule (TAL) Upward reserves revision with additional…
Oda development proving the model Faroes first full cycle discovery-to-development Faroe 15%, Operator: Spirit Energy Development summary Originally the Butch discovery (2011) Flexible water injection pipeline delivery Located in 66m…
Ula Area upsides Significant remaining potential Key areas of focus Ula infill targets, Ula North discovery Blane infill target Oselvar redevelopment Cassidy exploration well (2018) Additional exploration targets Slide 27
Blane (UK) infill target Add and accelerate production Revised Blane Faroe 44.5%, Operator: Repsol Norway subsurface layout Cross-border UK (82%)/Norway (18%) oil field development Faroes interest built through series of…
Oselvar redevelopment potential Faroe-led engineering solution Equipment New Oda production assigned to pipeline connects at Oda Faroe 55%, Operator Oselvar SSIV Oselvar anticipated to shutdown while still producing at economic…
Cassidy exploration well Oda license (PL405) Faroe 15% (Spirit 40% operator, AkerBP 15%, Suncor 30% ) Cassidy exploration well expected to be drilled in H2-18 back-to-back with Oda production wells Upper Jurassic Ula formation level…
Delivering Production Growth: Njord Future
Greater Njord Area Balanced ownership across major NCS (re)development projects Njord Unit Hyme Bauge Fenja: (Faroe 7.5%)1 Major redevelopment on NCS HCIIP of 1.5 billion boe in overall area Njord recovery factor 20% at shut down…
Njord Future Project Good progress on repair and upgrade of hub infrastructure 2017 Highlights Project sanction and PDO submission Q1 Njord A dry-dock work completed and successfully re-floated Q3 Njord B FSU is currently in cold…
Bauge Development Project Operator focused on cost reduction and value enhancement High return spoke in the Greater Njord Area Njord A Project sanction and PDO submission Q1 Njord B Synergies with nearby Hyme Field including…
Fenja development Moving into project execution alongside Njord Future Fenja sanctioned Subsea tie-back to Njord A Tie-in agreement signed and PDO submitted December 2017 Lumpsum SURF + SPS EPCI contract awarded to TechnipFMC Rig…
Greater Njord Area Summary Balanced ownership and risk key contributor to Faroe growth Three aligned development projects sanctioned in 2017 Njord Future Bauge Fenja Project execution on plan and budget Signifcant opportunities for…
Delivering Production Growth: Brasse
Brage field update On route to deliver 2018 production growth Faroe 14.3%, Wintershall operator Large STOOIP field STOOIP of 1Bn bbls Drilling rig allows cost effective infills Implementing Opex improvement projects Successful infill…
Brasse discovery summary Highlights Faroe 50% Discovered 2016 Successfully achieved 2017 milestones Successfully appraised summer 2017 Reserves increased on the back of appraisal well results Development project feasibility…
Brasse subsurface summary Reservoir 31/7-1 31/7-1 A 31/7-2 A 31/7-2 S N Slide 40
Brasse Extension area Capturing the wider prize PL740, PL740 B, PL740 C: Faroe 50% and Operator, Point 50% Brage Unit PL740 PL740 C Awarded in APA2014 Brasse discovery made in 2016 Appraisal well in 2017 PL740 B Awarded in…
Brasse development Feasibility phase completed Q4 2017 Subsea development Standard, off-the-shelf technology Multiple export routes for Brasse fluids Attractive returns Est 240 million capex (net) 25 30,000 boepd plateu rate Low…
Brasse reserves Matured to 2P reserves 18 months after discovery Fulfilling all requirements according to PRMS guidelines Positive Net Present value Commercial export options Favourable regulatory scheme for third party access to…
Brasse development Procurement strategy as a source of value Near term focus Procurement strategy aimed at reducing risk and increasing predictability Early engagement with Contractors Subsea Production System (SPS) & Subsea…
Exploration & appraisal: overview
Exploration a key value driver Exemplary exploration record Historical performance Track record Drilled over 40 exploration wells (+30 wells in Norway) Maintained 4 wells per year Key discoveries have driven corporate growth Maria…
Licensing rounds ground floor entry Faroe consistently top quartile in Norwegian APA Norway APA - yearly applications and relinquishments Faroe Norway APA Round Awards (Licenses) APA area for applications constantly expanding Faroe…
Norway APA 2017 Another successful year Very competitive Highest number of awards made in the APA 75 licences 45 North Sea, 22 Norwegian Sea and 8 Barents Sea awards 34 companies awarded licences out of 39 applicants Five firm…
Faroe APA 2017 awards PL 926 Blue Libelle Near Field opportunity Summary Faroe operator (40%), Concedo (30%), DNO (30%) 7 year initial period (2 + 2 + 2 + 1) Drill-or-drop after 2 years Firm work program: Acquire and/or reprocess…
Faroe APA 2017 awards (contd) PL 908 Aarhus Near Field Frontier opportunity Summary Statoil operator (70%), Faroe (30%) 7 year initial period (2 + 2 + 2 + 1) Drill-or-drop after 2 years Firm work program: Acquire 2D seismic and…
Faroe Exploration Summary Maintaining a consistent strategy Drill 4-5 wells per year Above average success rate Good reputation Maintaining a balanced portfolio Licensing rounds Adding Near Field opportunities Adding Near Field…
Exploration & appraisal: driving value
Fogelberg discovery Background Fogelberg: (Faroe 28.3%, Operator Spirit Energy)1 Existing gas discovery Original discovery drilled in 2010 Encountered gas condensate in the Garn and Ile Formations Appraisal follow-up Currently…
Rungne prospect Faroe Operated Exploration Well in 2018 PL825: Faroe 40% and Operator, Spirit 30%, Lundin 30% Attractive exploration prospect in a core area Located around 35km from Faroe operated Brasse development Awarded to Faroe…
Regional Setting Prolific hydrocarbon producing area Rungne area exploration success rate Huldra 1970s to present day Highly prolific area Veslefrikk Rungne Three closest fields (Oseberg, Veslefrikk & Huldra) have produced over 3…
Rungne prospect summary Proven play concept Analogous to Oseberg field located immediately to the south Highly prolific reservoir Oseberg Formation highly effective in several nearby fields Thick, high net to gross reservoir with…
Exploration & appraisal: new prospectivity
Gomez prospect and SE Tor discovery Possible Faroe operated exploration/appraisal well in 2019 PL006C: Faroe 85% and operator, Aker BP 15% Low risk accretive exploration potential in Gomez Proven HC bearing sandstones with significant…
SE Tor discovery background Material interest in highly productive Chalk oil discovery Chalk discovery 1972, appraised in 1980s and 2008 Four wells drilled on the field since 1972 Crestal well tested high quality, undersaturated oil…
SE Tor discovery Appraised oil discovery to provide incremental volumes Faroe increased to 85% since 2008 Tor Acquired further 75% and operatorship in 2015 to take control and Gomez progress Gomez and a future possible development SE…
Pabow Prospect Near field frontier PL870: (Statoil 80% and operator, Faroe 20%) License with several opportunities: Awarded February 2017 North Sea asset Located in the Stord Basin Close to the producing Skirne, Jotun and Ringhorne…
Yoshi Prospect Close to infrastructure Asset name: PL836S: (Wintershall (Faroe x%40% andand operator) operator, Faroe 30%, Spirit 30%) License higlights: Awarded in February 2016 Norwegian Sea asset Robust structure Good…
Canela Prospect Down-faulted from producing field Heidrun PL888: (Faroe 40% and operator, ConocoPhillips 30%, Wellesley 30%) License highlights: Awarded in February 2017 Drill or drop decision by February 2019 Norwegian Sea asset…
M&A: Themes and focus
Key business development focus Faroe goals Remain active in M&A market Business development has proved a crucial foundation for continued organic growth Both a buyer and a seller depending on market sentiment and portfolio…
Competitive Landscape North Sea Companies Active in M&A Developments Production Increasingly competitive landscape 18% 48% North Sea M&A active companies 45 Estimated 40% of universe PE/Private Focus by Majority chasing production…
Fenja sale analysis Proving the model Structured process Formal process at the right time Realistic timeline, full data set Run internally, targeted universe, competitive Has agreed to purchase 17.5% in Fenja (PL586) on the NCS…
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