Atlantic Petroleum produced 106,000 boe in Q1 2015. The Q1 result was a net loss of DKK 11.7MM


Tórshavn, Faroe, 2015-05-27 07:27 CEST (GLOBE NEWSWIRE) -- P/F Atlantic Petroleum (NASDAQ OMX: ATLA DKK & Oslo Stock Exchange: ATLA NOK) today announces its results for the first three months of 2015. This company announcement should be read in conjunction with Atlantic Petroleum’s Condensed Consolidated Interim Report attached to this announcement.

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HIGHLIGHTS & OUTLOOK

Atlantic Petroleum has demonstrated exploration value creation in the short term by monetising the Pegasus West discovery in the UK. On 7th May Atlantic Petroleum announced that Third Energy will purchase Atlantic Petroleum’s 10% working interests in the above Licences for a total potential consideration of £16.5 million of which £7.5 million will be paid on completion of the deal.  Remaining payments are conditional on production from Pegasus West and further development in the blocks.

In the first quarter this year Atlantic Petroleum was successful in the APA 2014 Licensing Round on the Norwegian Continental Shelf, with the Company being offered 2 licences. Atlantic Petroleum also made a post-tax cash deal with Statoil on the Norwegian shelf on PL 602 where a well was drilled resulting in a discovery on the Roald Rygg structure. The discovered resources have marginal economics on the basis of the costs and scheduled first production date provided by the operator, consequently Atlantic Petroleum have decided to leave the PL602 license and redirect its focus on adjacent licenses.

In March Atlantic Petroleum North Sea Limited announced that Nexen Petroleum UK Ltd, a wholly owned subsidiary of CNOOC Limited, on behalf of the Ettrick joint venture has signed a significant amendment agreement with Bluewater Ettrick Production (UK) Ltd, to secure the use of the Aoka Mizu FPSO beyond March 2016. The amendment will mean that the FPSO operating day rate will reduce after March 2016, extending the economic life of the fields and combined with other cost saving initiatives, result in a substantial reduction in the overall operating costs for the Ettrick and Blackbird fields.

Production for the first 3 months was 106,000 boe corresponding to an average of 1,178 boepd net which is lower than the target of 1,534 boepd. Production on the Chestnut field was impacted during the first quarter by planned scale squeeze operations. Production in January was also impacted by a planned well intervention on the Ettrick Field. Both production fields are now back on stream.

In March, the company reported the results of an updated Competent Persons Report (CPR) undertaken by Gaffney, Cline and Associates (GCA)

  • Net Remaining economic 2P reserves (including Kells), as reported by GCA, have moved from 8.6 mmboe to 7.6 mmboe, a 13% reduction. Over half the reduction was caused by production during 2014, with the remainder being due in-field adjustments and economic limit tests.
  • Net 2C Contingent oil resources have increased from 17.1 mmbls to 36.3 mmbls and 2C Contingent gas resources have increased from 21.3 bcf to 43.8 bcf. In terms of barrels of oil equivalent (boe), this results in overall an increase of 111% from 20.7 mmboe to 43.6 mmboe.
  • Net “Best” estimate of Prospective Risked Resources has increased from 50.7 mmboe to 53.6 mmboe, a 6% increase.

EBITDAX for the first 3 months was negative with DKK 28.2MM which was not within guidance. The guidance for the full year 2015 remains within the previous announced guidance of being positive. Revenue for 1Q 2015 was DKK 39.1MM and this was impacted by the lower than expected production and lower oil price. Net loss for 1Q 2015 was DKK 11.7MM. Cash and cash equivalents at end of 1Q 2015 was DKK 61.8MM and net assets/shareholders equity DKK 453.5MM. Bank debt excluding exploration finance facility was DKK 58.5MM. The lower than expected production in the first quarter and the reduced expenditure on projects that are no longer economic at current prices results in Atlantic Petroleum adjusting its full year guidance to 520,000 boe.

 

 

TARGETS 2015

 

  • Production - 520,000 boe
  • Financial – positive EBITDAX

 

Ben Arabo, CEO commented:

 

“In the current period of low oil prices we are focusing on capital discipline and on delivering the production potential of our portfolio. Our successful Pegasus sale in a very difficult market does illustrate that it is possible to create significant value from exploration in the short term. The sale has strengthened the company and our priority is now to secure the remaining funds for the ongoing Orlando development, which is set to more than double our oil production in 2016.”

 

 

 

 

Atlantic Petroleum in brief:

Atlantic Petroleum is a full cycle exploration and production (E&P) Group focused on North West Europe. Atlantic Petroleum currently holds around 37 oil and gas licences in the UK, Norway, and Ireland, and has three fields in production in the UK part of the North Sea. In addition to this, the Group has one field under development with first oil expected in 2016, two additional potential development projects and a substantial number of exploration prospects. Atlantic Petroleum participates in joint ventures with 30 reputable, international partners. Atlantic Petroleum’s head office is currently located in Tórshavn, Faroe Islands (to be closed in 2015). The Company has subsidiaries and technical offices in London, UK and Bergen, Norway. Atlantic Petroleum’s existing shares are listed on NASDAQ OMX Copenhagen and on Oslo Stock Exchange.

 

 

Further Details:

Further details can be obtained from Ben Arabo, CEO, tel +298 350100 (ben.arabo@petroleum.fo). This announcement will be available, together with other information about Atlantic Petroleum, on the Company's website: www.petroleum.fo.

 

On the website, it is also possible to sign up for the Company’s e-mail newsletter.

 

Announcement no.21/2015

Issued 27-05-2015

 

         P/F Atlantic Petroleum
         Yviri við Strond 4
         P.O. Box 1228
         FO-110 Tórshavn
         Faroe Islands
         
         Telephone +298 350 100
         Fax +298 350 101
         Website: www.petroleum.fo
         E-mail: petroleum@petroleum.fo


Attachments

150527 Webcast slides - Final.pdf 1Q 2015 Cond Cons Interim Report 31-03-2015.pdf