|
|
|
|
Atlantic Petroleum: A New Optimism |
|
|
|
Archives -
2007 Archive
|
|
Written by J. Cresswell
|
|
Tuesday, 22 May 2007 |
With fresh capital raised and first oil flowing this year, Atlantic Petroleum is determined to farm into more prospects in the UK and Ireland while keeping an eye on potential company acquisitions — likewise intending to participate in the Third Licensing Round in the Faroes.
2006 was a highly eventful and successful year for Atlantic Petroleum — the kind of exciting ride that typifies exploration and production companies large and small around the world.
And chief executive Wilhelm Petersen sees 2007 being just as eventful. In fact it will be a rather special year as first oil is expected from the Ettrick field development in the UK North Sea.
So long as the reservoir performs as expected and oil prices remain around the $60 mark, this will pump valuable earnings into the company for the first time, so helping to underpin Atlantic’s ambitions beyond what is possible through raising capital via stock markets.
Not that Atlantic has been unsuccessful in that regard. One of the highlights of 2006 was the raising of 200 million dkk (26.8m eur / 18.2m gbp) in order to replenish coffers and enable the company to pay its way in the development of Ettrick in which it has an 8.25-percent share and another UK North Sea field, Chestnut of which it holds 15 percent.
Mr Petersen: “We’re now well funded and we’re set to generate our own cash flow through production … that’s really important. All this provides a strong platform for growth, with the added benefit that we also have a large network of partners.”
Unlike so many small European E&P companies, Atlantic Petroleum has avoided buying into tail-end production in the hope of wringing extra barrels out of depleted reservoirs, rather it will draw its first revenues from fresh assets, both of which offer the potential for upside, once they have settled into their production stride. In Chestnut’s case, the field is expected onstream early 2008.
Of course, this year Atlantic’s team and shareholders will be keenly watching as each of the four Ettrick wells is drilled. These are being constructed back-to-back, with three to be completed as producers and the fourth as a water injector. A further one or two development wells will be drilled as the Upper Jurassic reservoir depletes. All wells will be tied back to the floating production, storage and offloading vessel Aoka Mizu, which is being prepared for the role in Singapore.
Ettrick was discovered by the 20/2-1 well, drilled in 1981 by BNOC, and tested 4,358 barrels of oil per day. The field was appraised by seven further wells between 1982 and 1985, four of them successfully producing oil to surface. However, like many North Sea finds, the field’s potential was not realizable until the right mix of partners and technology was assembled. And Atlantic is proud to be a part of that team. As for Chestnut, this is being developed utilizing two sub-sea wells tied back to the innovative Sevan Marine SSP300 floating production vessel, which is shaped like a stubby cylinder.
The 22/2a-11x well, drilled in 2001 will be re-used along with a new water injection well.
Meanwhile, the West Lennox field discovery (another North Sea asset) is going to take rather longer to mature than originally anticipated. Appraised in Q3 2005, further steps are contingent on drilling the nearby Crosby prospect, which is scheduled for additional seismic acquisition prior to an exploration well being spudded in 2008.
Mr Petersen believes that, while there is emphasis on building a position outwith Faroese waters, such activities are vital to Atlantic’s ability to pursue its dream of one day finding and producing hydrocarbons from the Faroe Shelf. Clearly there is disappointment in the results of the Statoil-operated Brugdan probe on 2006, but this is frontier exploration and everyone understands the risks that go with.
A measure of his confidence in that regard is the forthcoming Faroese Third Licensing Round.
“Atlantic Petroleum intends to participate in this licensing round and establishment of a partnership is under way,” says Petersen.
As if the Faroes hunt for resources wasn’t challenging enough, Atlantic has forged a relationship with Irish company Providence Resources, which has a portfolio of exciting prospects within the Irish aquatory, both on the Atlantic Frontier and within the Celtic Sea.
“We have signed a 10 percent farm-in agreement with Providence covering Celtic Sea license 2/07,” says Petersen. “This contains the Ardmore gas discovery, Helvick oilfield, Hook Head oil and gas find, and the Dunmore oil discovery. This is a very good deal offering promising finds and there is currently one well commitment.”
He adds: “This really is an exciting time. Though we were careful at first — that was a necessity — we’re now more ready to expand. In any case, industry consolidation may present opportunities for small up and coming oil companies such as Atlantic.
“We’re expecting to increase the number of farm-ins and possibly acquire other companies. Our goal remains to become a mid-size oil company.”
Link to pdf presentation...
|
|
|
Archives