Atlantic Petroleum: Orlando Field Production Update
Tuesday 18 June 2019
P/F Atlantic Petroleum announced the initial Orlando field production results following the disclosure of production information from the Licence Operator under the terms of the associated Sale and Purchase Agreement (SPA).
Orlando Update
Production from the Orlando field began at a lower rate than expected. Production over the first two months has averaged approximately 4,500 BOPD, below the Licence Operator's target of 10,500 BOPD. As it remains early in the life of the field and due to the limited operational data available to Atlantic Petroleum under the terms of the SPA, Atlantic Petroleum's Management and Board remain optimistic that production rates will improve and progress in line with Decipher's published production target and base case reserve estimate of 8 MMBOE. Atlantic Petroleum’s management is currently in the process of re-evaluating the asset and expects to downgrade the asset’s value in the 2019 Q2 Consolidated Interim Report; previously valued based on the 2014 Gaffney, Cline and Associates CPR reserve estimates (published by P/F Atlantic Petroleum on 17th March 2015).
Despite low initial production the Board and Management still hold the view that Orlando deferred consideration will start to be realised in the second half of 2019.
Orlando Overview
The Company has retained an economic interest in the Orlando Field; sold in 2017 to Decipher Energy. Under the Sale and Purchase Agreement, the Company, via APNS, is due to receive deferred considerations from the sale proceeds of the first 5.0 MM barrels of Orlando petroleum after the first USD 50.0 MM in gross field revenue and an amount equalling 4.35% of the Orlando petroleum in excess of the first 5.0 MM barrels. Production from the Orlando field began on the 29th March 2019.