Atlantic to exit Norwegian Sea license

May 27, 2015
Atlantic Petroleum has decided to relinquish its 7.5% stake in license PL602 in the Norwegian Sea.

Offshore staff

TORSHAVN, Faroe Islands – Atlantic Petroleum has decided to relinquish its 7.5% stake in license PL602 in the Norwegian Sea.

This follows receipt of a further drilling proposal from operator Statoil for the Gymir prospect. A well earlier this year on the same license found gas in the Roald Rygg structure, within tieback range of theAasta Hansteen development.

Ben Arabo, CEO of Atlantic, said: “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 ourUK Pegasus West project.”

Additionally, Atlantic has agreed to transfer half its 20% stake in PL802 in the Norwegian Sea to Statoil.

Repsol operates the license, awarded this February, the other partners being EON and OMV. The location is northeast of the Asterix discovery. According to Atlantic, the acreage includes various prospects within the Upper Cretaceous play system that has proven successful in the area.

The PL602 withdrawal means that the company will relinquish its 7.5% interest in PL602 including theRoald Rygg discovery. A non-cash pre-tax write down of an estimated NOK 20 million ($2.6 million) will be taken in 2Q 2015.

Atlantic’s production for the first three months of this year averaged 1,178 boe/d, below its target of 1,534 boe/d. Production from the Chestnut and Ettrick fields in the UK central North Sea was affected respectively by scale squeeze and well intervention operations, although both fields are now back onstream.