Butch strike maintains Faroe’s high success rate

ANALYSTS yesterday hailed Faroe Petroleum’s “excellent” drilling record after the Aberdeen-based explorer struck oil in its Butch well in the Norwegian sector of the North Sea.

Finding so-called “light oil” off the side of the main well means Faroe has enjoyed six successes out of its past eight attempts, according to Matthew Lambourne at Numis Securities.

Scottish Gas-owner Centrica, which operates the Butch well, said the early indications showed there were 30-60 million barrels of oil in the well. By comparison, the UK’s giant Brent field held about 2.5 billion barrels when it was discovered in the 1970s.

The British pair’s partners in the well are Suncor Norge and Spring Energy Norway.

Faroe chief executive Graham Stewart said the group would now proceed with a second side-track well at Butch and confirmed that the drilling of his firm’s T-Rex well off the coast of Norway was on schedule.

The explorer’s plans for 2012 include a further four wells in Norwegian waters and the North Uist well, to the west of Shetland. News of the Butch discovery comes just days after Faroe completed an asset swap with Norwegian producer Petoro.

Lambourne, who carries an “add” recommendation and 183p target price on the firm, said: “Faroe remains one of the highest-quality explorers and producers in the sector, in our view, with strong management and an excellent exploration track record – six successes from its last eight attempts.”