2018 Interim Results

18 September 2018 

FAROE PETROLEUM PLC 

("Faroe Petroleum", "Faroe", the "Company" or the "Group") 

Unaudited Interim Results for the six months ended 30 June 2018 

Faroe Petroleum, the independent oil and gas company focusing on exploration, appraisal and production opportunities in Norway and the UK, announces its unaudited Interim Results for the six months ended 30 June 2018. 

Highlights

Operations - significant resource upgrade following the Iris Hades discovery 

• Successful Iris Hades discovery (Faroe 20%), adding 42 mmboe 2C resources net to Faroe - appraisal well planned for H1 2019 
• Fogelberg (Faroe 15%) appraisal well and production testing completed in June 2018 
• Fenja field development part-divestment (Faroe 7.5%, previously 25%) raised $54.5 million, reduces capex 
• Average H1 2018 production of 12,402 boepd from existing portfolio (H1 2017: 14,800 boepd) - lower rate reflects   temporary production shut-ins on Trym and Tambar in Q1 2018 
• Farm-in to Plantain/Agar well in UKCS announced in August 2018 - drilling operations underway 

Finance - strong cash generation from producing assets and robust balance sheet 

• Adjusted revenue £102.2 million (H1 2017: £95.5 million) - reflecting higher commodity prices, partially offset by lower production during period. Statutory revenue of £67.8 million (H1 2017: £80.1 million) - excludes produced but not lifted hydrocarbons (underlift) of £37.3 million (H1 2017: £15.6 million) 
• EBITDAX £77.2 million (H1 2017: £44.0 million) - includes pre-tax net income of £21.3 million in relation to Oselvar     compensation payments 
• Operating profit of £82.5 million (H1 2017: loss £0.3 million) and profit after tax of £42.5 million (H1 2017: loss £2.9 million) - reflecting higher EBITDAX and £24.5 million post-tax gain on Fenja part-divestment 
• Unrestricted cash and net cash at 30 June 2018 £158.6 million and £82.6 million (31 December 2017: £149.1 million and £75.0 million) 
• $250 million reserve based lending ("RBL") facility, undrawn at 30 June 2018 (31 December 2017: £nil) 

Outlook - E&A drilling programme ramp-up and ongoing development investments, fully funded 

• Full year 2018 production guidance 12,000-14,000 boepd, approximately two thirds of which is oil 
• Fully-funded near to medium term organic growth target of 35,000 boepd on schedule 
• Ongoing significant multi-field development programme across our portfolio 
• Fully-funded net Group capital expenditure for 2018 is estimated at c. £225 million pre-tax 
• Flagship Brasse development concept selection underway with field sanction scheduled for H2 2019 
• Exploration programme continues with six firm wells targeting unrisked resources in range 80 to 150 mmboe (net) 
• Long term growth to be sustained through continuing annual exploration licence participation 

Graham Stewart, Chief Executive of Faroe Petroleum, commented: 

"I am pleased to announce the results for H1 2018 - a period of strong profitability, effective portfolio management and material exploration success. The significant Iris Hades discovery announced in April 2018 is our largest discovery to date and adds an estimated 42 mmboe of 2C oil equivalent net to the Company, substantially increasing our resource base.  

"We remain one of the most dynamic and successful explorers in the sector and have a very active drilling programme underway. Seven E&A wells will be drilled over the coming months including appraisal of Iris Hades, the Agar/Plantain exploration well in the UK currently drilling and the Faroe-operated Rungne exploration well, due to spud soon. The unrisked resource potential net to Faroe targeted by the firm six well exploration campaign programme is estimated to be in the range of 80-150 mmboe. 

"In the medium term we are targeting material increase in shareholder value and cashflow with our fully funded investment programme across the portfolio, encompassing exploration, appraisal, development and production. I remain confident in our ability to deliver our stated near to medium term production growth target of 35,000 boepd, and wish to express my sincere gratitude to all our stakeholders for their ongoing support and to our staff and colleagues for their hard work and commitment to delivering the best possible results for all of our shareholders." 

Ends 

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