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Faroe Petroleum (FPM)

Business description

Faroe Petroleum is an AIM-listed E&P with operations in Norway, UK and Ireland. Production in FY18 is expected to be 12–14kboed from an end-2017 reserve base of 98mmboe.

Stock data

Market cap.£566.8m
Last close152.00p
High / Low (52 weeks)170.6p / 91.2p
Stock market listingLN
Forecast net cash (£m)44
Forecast gearing ratio (%)N/A
TeamResources - Oil & Gas
SectorOil & Gas

Price performance

%1m3m12m
Actual(4.6)7.055.9
Relative *(0.3)17.067.0

* % Relative to local index

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Investment summary

Faroe has successfully established a 98mmboe reserve base through an exploration-led organic growth strategy. Norwegian exploration tax incentives, combined with recent success at Iris/Hades, underpin finding costs of c $1/boe (post-tax) and have delivered a portfolio of development projects with point-forward IRRs ranging from 21% to 41% at $70/bbl. With a RENAV of 185.2p/share, we believe that the market is not fully valuing the risked value of Faroe’s upcoming seven-well E&A programme that targets net un-risked prospective resource of 144mmboe, or is not fully taking into consideration the positive cash flow impact of tax depreciation carry-forwards/consolidation in Norway. Based on current debt availability, we believe Faroe is fully funded for current development commitments at an oil price down to $40/bbl.

Last updated on 01/10/2018

Y/E Dec Revenue (£m) EBITDA (£m) PBT (£m) EPS (p) P/E (x) P/CF (x)
2016A 94.8 (33.5) (61.6) (10.6) N/A 8.6
2017A 152.9 44.0 (21.0) (5.1) N/A 4.2
2018E 236.3 121.5 62.3 24.2 6.3 3.2
2019E 225.0 131.2 37.7 14.9 10.2 3.3

Last updated on 01/10/2018

Latest research

DNO - Norway Jose

Initiation | Oil & Gas | 01/10/2018

Latest video

Bitesize briefing - Faroe Petroleum

Key management

John Bentley, Chairman
Graham Stewart , CEO
Jonathan Cooper, CFO
Helge Hammer, COO

Company address

55 Strand
London
WC2N 5LS
United Kingdom
+44 (0)20 7839 9720
View website