Tórshavn, Faroe Islands, 2016-03-30 08:50 CEST (GLOBE NEWSWIRE) -- P/F Atlantic Petroleum (NASDAQ OMX: ATLA DKK & Oslo Stock Exchange: ATLA NOK) today announces its results for the full year of 2015. This company announcement should be read in conjunction with Atlantic Petroleum’s Condensed Consolidated Interim Report attached to this announcement.
MAIN EVENTS & OUTLOOK
The result after tax for 2015 was a net loss of DKK 564,0MM (2014: Loss of DKK 218,3MM) and loss of DKK 424,2MM for the last quarter of 2015 (4Q 2014: Loss of DKK 141,8MM). The loss in 2015 was principally caused by impairment charges of DKK 389,2MM on our producing and development fields, arising from current low oil price environment and the exploration expense of DKK 337,3MM related to unsuccessful exploration and relinquishment of licences. In 2015 net oil production to Atlantic Petroleum from the Ettrick, Chestnut and Blackbird fields was 486,000 boe (2014: 586,000 boe).
As a response to the low oil price environment the company closed the Faroes Office in July 2015 and curtailed exploration where possible and rationalised its portfolio. A sales process and farm out process of certain assets was launched, and the company ran a strategic options process from August 2015 with Pareto Securities acting as advisor attempting to either sell corporate entities or raise new sources of finance. This process failed to achieve an integrated solution for the company.
Iona, the operator of the Orlando Field (AP interest 25%), announced on the 18th November that their financing for the field had fallen through and that they were likely to enter administration; subsequently confirmed on the 6th January 2016. The field development stalled on the 18th November.
On 3rd December Atlantic Petroleum North Sea Limited announced that the company was under default under the Ettrick and Blackbird Joint Operating Agreement for failing to make payments. The default has not been cured and the asset is as of the 26th January 2016 subject to forfeiture.
Atlantic Petroleum North Sea Limited was served a Default Notice on the 19th January 2016 in respect of the Chestnut Field. The Group has been unable to settle this default; the interest in the Chestnut Field is now liable to forfeiture under the terms of the Joint Operating Agreement
On 9th March 2016 Atlantic Petroleum announced its intention to cease all activities in Norway through the sales of its activities to M Vest Energy AS. whereupon a further 12 staff will leave the Group; making a total staff reduction of 85%.
The Group expects no production in 2016, and the EBITDAX for 2016 is expected to be negative. On 24th March 2016 Atlantic Petroleum signed Heads of Terms with London Oil and Gas where London Oil and Gas stated its intention to inject a minimum of GBP 8MM in assets or funds into P/F Atlantic Petroleum through a convertible instrument. Part of the conditions for such a transaction is resolving issues with the Group’s creditors and partners, and Management will work towards achieving that and to progress the Orlando & Kells projects to the benefit of Creditors and other stakeholders. Whilst the potential transaction with London Oil and Gas offers hope of some value for shareholders there is no guarantee that the Management will be able to reach satisfactory terms with its Creditors to allow the transaction to proceed.
Ben Arabo, CEO commented:
“2015 provided perhaps the most difficult trading conditions for Atlantic Petroleum and for the Oil and Gas Industry as a whole in many years, almost without precedent. The oil price continued to decline throughout 2015 and the start for 2016 has seen the lowest oil price for more than a decade.
The current situation is serious, as the company’s equity is a deficit of DKK-102,0MM. This means that an equity injection or a creditor solution is required to keep the group solvent.
On 24th March 2016 Atlantic Petroleum signed Heads of Terms with London Oil & Gas where London Oil and Gas states its intention to inject a minimum of GBP 8MM in assets or funds into P/F Atlantic Petroleum through a convertible instrument. Part of the conditions for such a transaction is resolving issues with our creditors and partners and a transaction will also require General Assembly Approvals. We are still working towards achieving that. If we do succeed and get an injection of assets or funds we will undertake with the London Oil and Gas investors to look at the company’s strategy and look at wider geographical areas for oil & gas and expand the areas of business of Atlantic Petroleum in line with the areas of business of The London Group.”
Atlantic Petroleum in brief:
Atlantic Petroleum is a full cycle exploration and production (E&P) Group focused on North West Europe. Atlantic Petroleum participates in joint ventures with 30 reputable, international partners. Atlantic Petroleum P/F is based in Tórshavn, Faroe Islands, and the Company has subsidiaries and 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 550100 (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.07/2016
Issued 30-03-2016
P/F Atlantic Petroleum
Yviri við Strond 4
P.O. Box 1228
FO-110 Tórshavn
Faroe Islands
Telephone +44 208 834 1045
Fax +44 208 834 1125
Website: www.petroleum.fo
E-mail: petroleum@petroleum.fo
