Atlantic Petroleum sells Pegasus gas discovery stake

Atlantic Petroleum, an independent oil company based in Faroe Islands, has decided to sell its share in the Pegasus gas discovery in the UK North Sea.

The company has signed a sale and purchase agreement with Third Energy Offshore Limited for the sale of Atlantic Petroleum’s interests in P1724 (UK Block 43/13b which contains the Pegasus West Gas Discovery), P1727 (UK Blocks 43/17b and 43/18b) and P2128 (Block 43/12).

Under the sale and purchase agreement, Third Energy will purchase Atlantic Petroleum’s 10% working interests in the above Licences for a total potential consideration of £16.5 million ($25.08 million) of which £7.5 million ($11.4 million) will be paid on completion. Remaining payments are conditional on production from Pegasus West and further development in the blocks.

The Pegasus West well (43/13b-7) was drilled and tested at a combined rate of 91 MMscfpd (million standard cubic feet per day) in late 2014. The well is approximately 7 km WSW of the 43/13b-6Z Pegasus North discovery well. Both wells are in P1724, close to the producing Cavendish Field. The licences are operated by Centrica North Sea Gas which holds 55% equity. Atlantic Petroleum holds 10% equity and the remaining equity 35% is held by Third Energy Offshore.

CEO, Ben Arabo, comments: “The sale of the Pegasus discovery and its surrounding acreage is a part of our strategy to realise value at an early stage from our exploration successes. The proceeds from the sale will be used to strengthen our balance sheet during the current period of low oil prices. The price achieved clearly demonstrates the value of our exploration portfolio.”

Not including this transaction the Pegasus well is operated by Centrica Energy which holds a 55% interest in the licence. Atlantic Petroleum holds 10% equity and the remaining equity 35% is held by Third Energy Offshore.

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