Meeting PSA 13 May 2015Company PresentationAnnual General Meeting London, 25 June 2015Faroe overviewIntroductionFaroes exploration-led and production-backed strategy is delivering exceptional results Significant recent exploration successes in Norway: Snilehorn and Pil Substantial potential being realised across portfolio Material, well balanced, tax efficient production with low operating costs Strong balance sheet, with low gearingFaroe has built an outstanding diversified portfolio High quality large exploration acreage position in Norway Ongoing multi-well drilling programme funded from cash flow Balanced portfolio of assetsFaroes world class sub-surface competence is at the heart of its success2Faroe well capitalised and on track to become a leading E&P player in the North SeaFaroes growth modelBuilding core value and scaleMaintain significant portfolio of Prospective Resources Participate in Licence Rounds excellent track record of awards Proactive approach to farm-ins/farm-outsGrow Contingent Resources (2C) High-graded, high-quality programme of E&A wells Optimumworking interests and better than 1 in 3 success rate Grow 2P Reserves Progress discoveries to FDP sanction Participate selectively in development projects Swap 2C contingent for 2P reserves where appropriateGrow Production Exploit market opportunities through acquisitions & swaps Invest in our producing fieldsPrudent financial management Ensure balance sheet strength at all timesFaroe successfully executing its strategy3Building core value and scale Faroes growth modelProspective to 2C contingent to 2P reserves4Prospective unriskedresource2P reserves 2C resources109 mmboe30.6 mmboe>1 bn boediscoveries FDP and dealsConverting exploration success to valueRobust company going forwardFaroe well positioned to grow in lower oil price environmentFinancially robust Uncommitted cash on the balance sheet (107m at 31 May-15) Significant head-room in existing debt facilities Production generating strong free cash-flow even at much lower oil price levels Production of 11,324 to 31 May-15 2015 (full year guidance 8-10,000 boepd (ca. 58% liquids and 42% gas)) Opex of $22/boe to 31 May-15 to 2015 (full year forecast to average approximately US$30/boe) Oil and gas hedges in place to underpin budget Production balanced between oil and gas and between Norway and the UKNo large capital commitments ahead No significant development costs in 2015 budgeted capex approx. 17m principally infill drillingE&A programme remains solid with potential for significant value creation 5 expected wells in E&A programme for 2015, on track and fully funded Shango (small discovery) Bister (dry well) Boomerang, Blink and Portrush (all in Greater Njord area, Norway) still to come in 2015 2015 exploration budget of 100m pre-tax and 26m post-tax, reflects advantage of Norwegian incentivesFaroe has strong balance sheet, near-term upside and real growth potential5Exploration and appraisal Drilling programme: another busy period of E&A All exploration wells being drilled in Norway benefiting from 78% tax rebate incentive Several prospects identified for possible 2016 and 2017 drilling, both operated and non-operated Screening work ongoing with emphasis on economic robustness ahead of drilling decisions Very active programme fully funded from cash flow with significant upside potential 6Prospect EquityQ1 Q2 Q3 Q4 Q1 Q2Shango (Skirne East) ** 20,0%Bister ** 7,5%Boomerang (Pil follow up well) * 25,0%Portrush 20,0%Blink (Pil follow up well) * 25,0%Kvalross * 40,0%Dazzler * 20,0%* committed** drilled2015 2016Exploration and appraisal Shango: near-field discovery (Norway) - April 2015 Faroe 20% - PL627 - Total operator Located on the northern part of prolific Utsira High 10 metre gas column in the high quality Middle Jurassic Hugin formation Preliminary volumetric gross estimate 3 to 10 mmboe recoverable potential to be of commercial size Potential tie-back development to Skirnefield (approx5 kms) Total-operated Atla field developed in 2012 (reserves 9mmboe)7Exploration and appraisalSignificant Pil and Bue discoveries (Norway) follow-up wells in 20152014 discovery Faroe 25% - significant success - March 2014 Gross columns ca 135m of oil and 91m of gas Well test flowed at a stable rate of 6,710 bopd of 37API oil, 56/64 choke Prolific reservoir - very high net to gross ratio Preliminary Pil and Bue estimated range of gross recoverable resource of 80-200 mmboe 2015 follow-up programme Two significant follow-up wells + side-track to the Pil and Bue discoveries: Boomerang and Blink Boomerang spudded 23 Jun-15 - Transocean Arctic semi-submersible rig Targeting estimated additional unrisked prospective resources of 93 490 mmboe2(gross) Added key new licences in recent APA award81 Estimate as per NPD2 Operators estimatesExploration and appraisalPortrush to drill in 2015 Faroe 20% - PL793 - Shell operator Located less than 10 km south east of the Njord field (Faroe 7.5%) Boomerang look-alike prospect along Vingleia fault Targeting prospective resources in analogous Upper Jurassic reservoirs to Pil, Bue and Draugen If successful, could be developed as a subsea tie-back to Njord or Draugen 9Producing assetsBuilding production base and growing reservesDiversified production base with infill and near-field upside potential to boost productionBrage(Faroe: 14.26%) Oil field in Norwegian Sea Wintershall-operated Infill programme two-well programme for 2015 underwayBlane(Faroe: 18.0%) Oilfield in Central Graben UK, Talisman-operated Low operating cost, stable productionRinghorne East(Faroe: 7.8%) Oilfield in Norwegian North Sea, Exxon-operated Low operating cost, stable productionNjord/Hyme(Faroe: 7.5%) Prolific oil and gas field in the Norwegian Sea Statoil-operated Hyme subsea satellite performing above expectationsSchooner & Ketch(Faroe: 60%) Gas fields in the UK Southern Gas Basin Faroe-operated Stable gas production sold to the UK marketSnilehorn(Faroe 7.5%) Undeveloped oil field in Norwegian Sea 2013 discovery Statoil-operated, tie-back candidate to NjordStrong balanced production, well performing assets, low opex level2P Reserves (1 Jan-15)10Total: 30.6 mmboeNjord/Hyme (N)Schooner/Ketch (UK)Brage (N)Snilehorn (N)Ringhorne East (N)Blane (UK)OthersProducing assetsProduction performance exceeds forecast in H1 2015Diversified production base delivering stable performanceStrong 2015 first half production performance11J anFeb Mar Apr MayProductionSchooner & Ketch gas fields (UK) stable production with upsideApproximately 48% of Faroes production is gas12Acquisition in 2014 added production and 2P reserves Current combined production at around 3,000 boepd (net) Potential to boost further production, grow reserves and extend field lifeProduction portfolio diversified Faroe 60% operated interests in two good quality producing gas fields developed by Shell/Esso Improved balance between oil and gasImproved tax efficiency Utilisation of Faroes carried forward tax losses accelerates payback Provides tax shelter for future investments in the UK sectorFaroe settled in as operator Operating model based on duty holder principle (Petrofac contract)Programme to mature and increase reserves and production through investment programme Phase 1: operational efficiencies 2015 wireline programme successful in increasing Schooner production, programme investment paid back in 15 days Phase 2: infill well drilling programme (no current commitments)Greater Njord Area (Norway)Outstanding development opportunity - strategically valuable position Njord and Hyme: Currently producing in excess of forecast Njord A facility needs lifetime extension to exploit existing and new resources in area - scenarios under assessmentFaroe very well positioned in one of Norways most sought after new exploration, appraisal & development areas Njord, Hyme and Snilehorn overall remaining 2P Reserves in excess of 170 mmboe (gross) Pil and Bue estimated 2C Resources 80-200 million boe (gross) Pil follow-up wells and Portrush offer potential for significant further resource additions Faroe recently awarded key licences in the APA Round in joint ventures with both Shell and StatoilSignificant infrastructure in the area Draugen and Njord large field developments sgard transportation gas trunk line to European gas marketDraugen Shell operated Njord Statoil operated13NjordHymeSnilehornPortrushRosapennaSeychellesPil and BueBlink and BoomerangSlyngeDraugenContingent ResourcesConverting 2C Contingent Resources to 2P ReservesField WI OperatorFaroe ObservationsButch(Norway)15% Centrica 2011 discovery Concept selection underway Tie back development options being assessedPil(Norway)25% VNG 2014 discovery Prolific reservoir Tie-back or stand-alone Significant additional prospectivity targeted Fogelberg(Norway)15% Centrica 2010 discovery Proximity to infrastructure Awaiting export capacityLowlander / PerthDolphin (UK)>50% Faroe / Parkmead 2011 / 2013 acquisitions Technical definition maturing Commercial framework for jointdevelopment being agreed ahead of FDPRodriguez / Solberg(Norway)20% Wintershall 2013 / 2014 discoveries Lower Cretaceous Lange Channel system extends across several licences2C Resources (1 Jan-15)Total: 109 mmboe14Lowlander/Perth/Dolphin (UK)Pil/Bue (N)Fogelberg (N)Rodriguez/Solberg (N)Butch (N)OthersMaximise project values through low-cost pre-development activitiesButch (Norway)Excellent development opportunityButch discovery (Faroe 15%) Southern North Sea; 66m water depth Close to infrastructure:Ula and Gyda Excellent quality reservoir, light oil Centrica operatorDevelopment project planning work ongoing Subsea and drilling costs major part of capex to benefit from reduced market rates Three options being matured in parallel commercial negotiation ongoing: Subsea tie-back to Ula (direct or via Oselvar) Subsea tie-back to Gyda Standalone leased jack-up rig with PDQFDP submission planned for 2016152014 Results Revenue 129.2m (2013: 129.4m) EBITDAX 59.1m (2013: 80.1m) due to lower realised boe price of $71 boe (2013: $105) 38.5m pre-tax impairments of D&P assets and 131.7m exploration write off Loss after tax 55.0m (2013: Profit 14.1m)Production 2014 economic production approximately 9,106 boepd 2015 production guidance 8-10,000 boepd (approx. 58% liquids and 42% gas) to be reviewed after summer maintenance programmeLiquidity Cash at 31 Dec-14 of 92.6m net cash 69.6m (31 Dec 13: 40.6m cash and net cash) $250m Reserve Based Lending facility (RBL) approx. 23.0m drawn at 31 Dec-14 Exploration Financing Facility (EFF) of approx. 130m (NOK 1.5bn plus NOK500m accordion) 2015 hedging: predominantly 268,000 bbls of oil, $90/bbl puts and 52.6 mm therms (approx. 835,000 boe) 50p/therm puts.Limited swaps at $67/bblCapex 2014 pre-tax exploration and appraisal programme of approx. 85m (23m post-tax) 2015 pre-tax expected exploration and appraisal programme of approx. 100m (26m post-tax) 2015 expected development and production capex approx. 17m (2014: 23m)Tax efficiency UK tax losses of 67.5m (31 Dec 14); production provides tax shield for UK exploration Norway: utilisation of 78% exploration tax rebate; EFF funds 75% of net exploration expenditureStrong balance sheet, low gearing, good hedging, robust cash flow - headroom Economic production for 2014 includes Schooner and Ketch, where Faroe received the economic benefit from the associated production from 1 Jan-14 but can only account for it from the completion of the acquisition on 9 Oct-14. Accounting production for 2014 was 6,579 boepd162014 Full Year ResultsFinancial highlightsSummary and outlookSolid and proven business model delivering sustainable value growth, through drill-bit and transactions Exploration-led strategy continues to deliver material success, underpinned by strong cash flow Balanced portfolio and world-class technical teamFinancially robust and operationally strong even at low commodity prices Robust balance sheet Strong cash flowForward programme is material yet relatively low cost and benefits from Norwegian State refund Multi-well high impact E&A programme in Norway for 2015 on track, fully funded est. 26m post tax Modest production and development capex in 2015 est. 17m post taxPlanned growth Continued focus on progressing 2C to 2P transitions Headroom ensures we are well positioned to pursue both organic development and value accretive opportunities Aim to grow significantly in the near termStrength at low oil price, high upside, funded 2015 programme, growth planned17DifferentiatorsExcellent asset monetisation track recordProduction field operatorFinancial strengthExcellent exploration track record - multi-well programmeExperienced management& clear strategyStrong Norway position18Graham StewartChief Executive Officer Instrumental in founding Faroe Petroleum in 1998 Over 25 years experience in oil and gas technical and commercial affairs Previously finance director and commercial director at Dana Petroleum 1997 to 2002 Experience with Schlumberger, DNV Technica, Petroleum Science & Technology Institute Offshore Engineering degree (Heriot-Watt University) and MBA (University of Edinburgh )Helge Hammer Chief Operating Officer Joined Faroe Petroleum in 2006 Over 25 years technical & business experience, incl. Shell (Norway, Oman, Australia and Holland) Managing Director of wholly owned Norwegian subsidiary, Faroe Petroleum Norge AS Previously Asset Manager and Deputy Managing Director at Paladin Resources Economics degree (Institut Franais du Ptrole, Paris) Petroleum Engineering degree (NTH University of Trondheim)Jonathan Cooper Chief Financial Officer Joined Faroe Petroleum as Chief Financial Officer in July 2013 Former Finance Director of Gulf Keystone Petroleum and Sterling Energy and CFO of Lamprell plc Former Director of the Oil and Gas Corporate Finance Team of Dresdner Kleinwort Wasserstein Broad range of experience from mergers and acquisitions, public offerings and financing Chartered accountant by training having qualified with KPMG PhD Mechanical Engineering (University of Leeds)Executive team19These materials do not constitute or form any part of any offer or invitation to sell or issue or purchase or subscribe for any shares in Faroe Petroleum plc (the Company) nor shall they or any part of them, or the fact of their distribution, form the basis of, or be relied on in connection with, any contract with the Company relating to any securities. Any decision regarding any proposed acquisition of shares in the Company must be made solely on the basis of public information on the Company. These materials are not intended to be distributed or passed on, directly or indirectly, to any other persons. They are available to you solely for your information and may not be reproduced, forwarded to any other person or published, in whole or in part, for any other purpose. No reliance may be placed for any purpose whatsoever on the information contained in these materials or on their completeness. Any reliance thereon could potentially expose you to a significant risk of losing all of the property invested by you or the incurring by you of additional liability. No representation or warranty, express or implied, is given by the Company, its directors or employees, or their professional advisers as to the accuracy, fairness, sufficiency or completeness of the information, opinions or beliefs contained in these materials. Save in the case of fraud, no liability is accepted for any loss, cost or damage suffered or incurred as a result of the reliance on such information, opinions or beliefs. Certain statements and graphs throughout these materials are forward-looking statements and represent the Companys expectations or beliefs concerning, among other things, future operating results and various components thereof, including financial condition, results of operations, plans, objectives and estimates (including resource estimates), the Companys anticipated future cash-flow and expenditure and the Companys future economic performance. These statements, which may contain the words anticipate, believe, intend, estimate, expect and words of similar meaning, reflect the directors beliefs and expectations and involve a number of risks and uncertainties as they relate to events and depend on circumstances that will occur in the future.Forward-looking statements speak only as at the date of these materials and no representation is made that any of these statements or forecasts will come to pass or that any forecast results will be achieved.The Company expressly disclaims any obligation to update or revise any forward-looking statements in these materials, whether as a result of new information or future events. If you are considering buying shares in the Company, you should consult a person authorised by the Financial Conduct Authority who specialises in advising on securities of companies such as Faroe Petroleum plc. Disclaimer20Appendices21Producing fieldBrage - Norwegian North Sea Faroe (14.3%), Wintershall (35.2% and operator), VNG (4.4%), Core Energy AS (12.3%), Talisman (33.8%) On streamin 1993 Fixed jacket integrated (PDQ) with 40 well slots, 17 active oil producers Oil transport to Sture terminal via Oseberg Gas transport via Statpipe/Norpipe systems Opex approx. $35/boe Significant opportunity for reserves and production growth: Infill drilling programme ongoing New 4D seismic acquired to mature furthertargets Brage North possible tie-back project22Producing fieldRinghorne East - Norwegian North Sea Faroe (7.8%), ExxonMobil (77.4% and operator), Statoil (14.8%) Excellent quality oil field located in Norwegian North Sea at 125m water depth Four horizontal production wells drilled from the Ringhorne Fixed jacket facility (24 slots) Oil production transported to Balder FPSO Gas transported to Jotun facilities for processing, storage and export via Gassled system High uptime stable production Opex$10-15/boe23Producing fieldBlane - UK Central North Sea Faroe (18%), Talisman (43% and operator), Roc Oil (12.5%), Nippon (14%), Dana (12.5%) Prolific Palaeocene Upper Forties sands reservoir, structural closure High quality 42API oil Two horizontal producers with gas lift and one water injection well 34 km subsea tieback to BP-operated Ula platform Oil is exported to the Ekofisk II infrastructure and then onward to Teesside via the Norpipe system Excellent historic production performance Work is currently ongoing to mature infill well Opex in range of $10-15/boe24Development opportunityPerth, Dolphin & Lowlander significant upside HOA enabling future joint development of Perth (Faroe 34.6%), Dolphin (34.6%) and Lowlander (100%) Lowlander, Dolphin and Perth estimated to contain 270 mmboe of oil in place fully appraised, 80 mmboe recoverable (100%) Previous barrier to development - no existing facilities in area for production of sour crude oil1 Rig and contracting markets offer opportunity for improved economics Commercial framework being finalised ahead of joint field development planning1 Tartan is able to handle only limited amount of low-H2S crude25Exploration/appraisal Kvalross frontier exploration well scheduled for 2015/2016 Faroe 40% - PL611 - Wintershall operator Awarded in May 2011 in the Norwegian 21st Licensing Round Located in the Barents Sea to the south of OMVs significant Wisting discovery The well is planned to test two targets: the Lower Triassic Kvalross prospect with very significant gas resources potential in Klappmyss clinoformreservoirs within a mega-closure the Early Triassic Kvaltann prospect, a Snadd Formation sandstone channel sitting directly above the Kvalross Prospect with substantial oil potential as proven in the Wisting shallow discovery to the north Scheduled to be drilled with the Transocean Arctic drilling rig in H2 2015 H1 2016 Targeting estimated unrisked prospective resources of 108-1,173 mmboe* (gross)26* CPR 2015 (Senergy)Exploration/appraisal Dazzler frontier exploration well scheduled for 2016 PL716, ENI operator, Faroe 20% Awarded in June 2013 in the Norwegian 22ndLicensing Round Dazzler is located on the flank of the Stappen High and adjacent to the deep Bjrnya Basin Distance to shore is 315km and distance to Castberg is about 85km Jurassic/Triassic reservoirs similar to the Castberg area are targeted Targeting estimated unrisked prospective resources of 59 1,246 mmboe* (gross) Well scheduled for 201627 * CPR 2015 (Senergy)