Shares digital

A weak share price after the oil price fall belies the explorer’s strong project pipeline

by Tom Sieber

A recent sell-off represents an opportunity to invest in oil explorer Faroe Petroleum (FPM:AIM), which has continued its aggressive drilling campaign with the spudding of a well on the Marsvin oil prospect in the Norwegian North Sea.

This well, which will take around 80 days to drill, is targeting a ‘substantial upper jurassic oil prospect’. Faroe has a 14% stake in the project.

In addition to Marsvin, the £153 million market cap is also currently drilling the Topaz gas field appraisal well and the East Breagh exploration well, both in the UK southern North Sea. Last month the Wissey gas field came onstream, adding the equivalent of 2,175 barrels of oil to the company’s production profile. The West Breagh appraisal well is programmed to start drilling imminently and there are plans to drill three more wells before the end of the year – Hyme, South East Tor and Grosso – giving plenty of potential catalysts for the stock.

At 146p the company’s share price has come off around 6% in the past week or so as the price of oil has continued the retreat begun in mid-July. Faroe is now some 30% off its 209.5p 12-month high.

Shares says: This is among the most active drillers in the Aim exploration and production universe and recent weakness offers a good entry point. Buy