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North Sea oil explorer Faroe gains major new investor after bumper gas discovery

North Sea oil minnow Faroe Petroleum has boosted its Norwegian ties after welcoming a new investor and making a major new gas discovery.
The Aim-listed minnow's shares jumped to their highest level since the oil price crash in late 2014 to 117p, up more than 11pc from the day before, after Norwegian oil producer Det norske oljeselskap (DNO) said it would buy a 15pc stake in the business from Israel’s Delek for ?70m.
Delek bought its stake in Faroe just 15 months ago, but is understood to have made a ?23.3m profit from the sale.
The deal came as the Aberdeen-based explorer said that the Iris and Hades gas fields it owns alongside European oil majors OMV and Norway’s Statoil revealed better than expected gas reserves after drilling to depths of more than two miles.
Graham Stewart, Faroe’s chief executive, said the Iris and Hades discovery bolstered the group’s successful track record as an oil and gas explorer.
“It is extremely gratifying to see both of these prospects delivering significant discoveries, further confirming Faroe's consistent and industry-leading exploration track record,” he said.
“These discoveries are located in one of our core areas and build on Faroe’s already significant position in the Norwegian Sea.”
The Iris and Hades fields lie just five miles from Faroe’s Morvin Field and 10 miles from the Asgard Complex, where large volumes of gas are already produced for transport to hubs across Europe.
The fields will be operated by the Norwegian arm of OMV, which holds 30pc of the project alongside Statoil, which owns 40pc, and Spirit Energy, which has 10pc. Faroe owns the remaining one-fifth stake.
North Sea oil explorer Faroe gains major new investor after bumper gas discovery

Faroe Petroleum boss Graham Stewart
DNO's investment marks part of its return to the North Sea after a six-year investment hiatus from its home waters in favour of more lucrative operations in the Middle East.
The group snapped up Origo Exploration last year and said it now plans to build a long-term strategic shareholding in Faroe by supporting its North Sea strategy.
Faroe has become something of an investor favourite after it emerged from the global oil market downturn of 2014 with no debt and an appetite for further exploration and acquisitions.
However the Hades and Iris discoveries are a welcome return to form for the explorer after it lost a three-year bet on a new oil and gas frontier this time last year.
Faroe admitted last spring that its Bone exploration well unearthed only seawater after it drilled to a depth of more than two miles below sea level off the northern coast of Norway. The well has since been plugged and abandoned.
Mr Stewart said the group continued to appraise its Fogelberg well and results were expected shortly. The company's exploration programme will continue over the remainder of the year with three further exploration wells in Norway at the Rungne, Cassidy and Pabow wells.
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