Atlantic Petroleum farms down one licence, withdraws from another

Atlantic Petroleum has announced that Statoil will exercise their option to take 10% of the PL802 licence in the Norwegian Sea.

This will leave Atlantic Petroleum with 10% equity in License PL802.

To remind, in February 2015, Atlantic Petroleum entered into farm-down agreement with Statoil for three licences including PL802 where Statoil gained the right to acquire up to ten percent participating interest in the licence.

In addition, following receipt of a further drilling proposal on the Gymir prospect on Licence PL602, Atlantic Petroleum has submitted a notice of withdrawal from the License.

Ben Arabo, CEO, commented: “After initial encouragement, our current view on the marginal economics on Roald Rygg combined with expected long lead time to start of production has led to the decision to withdraw from PL602. The further drilling of small accumulations scheduled for production in 2024 is a marginal project at the current time and an inefficient use of funds and resources in the current period of low oil price. We will continue to focus on our larger opportunities in the Norwegian Sea Aasta Hansteen area, where we retain a strong footprint, and on projects that can be monetized more quickly, such as the recently announced sale of our UK Pegasus West project.”

PL802 was awarded in February 2015 (APA 2014 award). The partnership consists of Repsol (operator, 40%), Eon (20%), OMV (20%) and Atlantic Petroleum (20%). The licence is sitting just north east of the Asterix discovery, and contains several prospects within the Upper Cretaceous play system that has been proven successful in this area.

The PL602 withdrawal means that the company will relinquish its 7.5% interest in PL602 including the Roald Rygg discovery. A non-cash pre-tax write down of an estimated NOK 20M will be taken in Q2 2015.

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