Faroese oil and gas company Atlantic Petroleum has completed the sale and purchase agreement with Decipher Energy for its 25 percent interest in the Orlando field in the UK North Sea.
Atlantic said on Monday that the consideration is a two percent revenue share of the total Orlando production revenue until the field has produced five million barrels of oil.
After that, the revenue share to Atlantic Petroleum increases to 4.35 percent of the total Orlando field revenue. Also, $1 million of the initial two percent revenue has been prepaid to Atlantic Petroleum.
The company added that it would not be participating in or funding the development of Orlando, and the only involvement for the company would be receiving its share of the sale proceeds when the field starts production.
Ben Arabo, CEO of Atlantic Petroleum, said: “We are very pleased to complete the agreement with Decipher Energy and we look forward to the field commencing production. There is significant upside to Atlantic Petroleum from the Orlando sales proceeds if the field performs as expected or better.”
The two companies agreed to the 25 percent interest sale back in mid-March. This was the second time the Orlando development had been put up for sale. Atlantic had agreed to sell its interest for the first time last year but the buyer, Bridge Petroleum, backed out of the deal.
According to the most recent Competent Persons’ Report prepared for Atlantic by Gaffney Cline and Associates announced in March 2015, Orlando holds between 8.5 and 15.3 million barrels of recoverable reserves. Initial production rates on Orlando are expected to be in excess of 10.000 barrels per day.
Decipher Energy is now a sole owner of the Orlando field, as it in April 2017 completed the acquisition of Iona Energy Company (UK), which held a 75% interest in both Orlando and Kells fields.
Offshore Energy Today Staff