Atlantic Petroleum Sells its 25% Interest of Orlando for Cash and a Share of the Sale Proceeds from Future Orlando Production
Wednesday 15 March 2017
Atlantic Petroleum (NASDAQ Copenhagen: ATLA DKK & Oslo Stock Exchange: ATLA NOK) announces that it has entered into a Sale and Purchase Agreement with Decipher Energy for its 25% interest in the Orlando development.
The consideration is a 2% revenue share of the total Orlando production revenue until the field has produced 5 million barrels of oil. After that the revenue share to Atlantic Petroleum increases to 4.35% of the total Orlando field revenue. USD 1MM of the initial 2% revenue share is prepaid on completion of the Sale and Purchase Agreement.
When the transaction completes Atlantic Petroleum will not be participating in or funding the development of Orlando, and the only involvement for the company will be receiving its share of the sale proceeds when the field starts production.
According to the most recent Competent Persons’ Report prepared for Atlantic Petroleum by Gaffney Cline and Associates announced in March 2015, Orlando holds between 8.5 and 15.3 million barrels of recoverable reserves. Initial production rates on Orlando are expected to be in excess of 10.000 barrels per day.
Ben Arabo CEO said:
“We are very pleased with the agreement with Decipher Energy. The Orlando development is a good project and we are very glad to see that it will be developed with a planned first oil date in 2018. If the field performs as expected and the oil price remains at current levels or recovers further, there can be significant upside to Atlantic Petroleum from the Orlando sales proceeds."