Faroe's Anne Marie field results disappoint City

Faroe Petroleum, the Aberdeen-based oil and gas exploration firm, disappointed the market yesterday with an update from its Anne Marie prospect in the Faroe Islands.

Although the company said it found hydrocarbons, the update was not as positive as had been hoped for and shares in the company fell by more than 9 per cent.

Graham Stewart, chief executive of Faroe Petroleum, said : "Whilst we did not encounter thick reservoir sands at the Anne Marie well location, the discovery gives us significant encouragement to continue exploration efforts in this licence."

Faroe Petroleum has been the focus of speculation over a possible takeover approach, particularly following the acquisition by the Korea National Oil Corporation of Dana Petroleum which held a stake of 27.5 per cent in Faroe.

Faroe is seen as attractive given its interests in parts of the UK continental shelf where a significant share of future oil production is expected to come from. The company holds more than 40 exploration licenses.

"It's going to take a lot of companies a huge amount of time to build up a portfolio of acreage in the North Sea, which they get readymade with Faroe," said Peter Hitchens of Panmure Gordon.

Shares in Faroe closed down 18p at 177p although they are still up more than 55 per cent this year.