Atlantic Petroleum has farmed into UK License P1047, by purchasing the 17.5% equity held by Enterprise Oil Limited, an affiliate of Shell U.K. Limited for a consideration of £1.2 million, plus a deferred payment of £200,000.
The deferred consideration is payable upon first production from the block, or upon Atlantic Petroleum's transfer of interest of the block. The acquisition will be funded with cash. The farm-in is subject to approval by the UK Department for Business, Enterprise and Regulatory Reform and to partner consent.
The license contains the Marten discovery well, 20/3-4, drilled in 1984 by Amoco (U.K.) Exploration Company. The well discovered oil in Jurassic Buzzard aged sands and the operator currently quotes total reserves in the order of 9 MMBbls oil plus 8 BCF gas for the Marten structure.
The license covers Block 20/3c and is operated by Nexen Petroleum U.K. Limited and was awarded in the 20th Round in July 2002. After the farm-in, the license partnership will consist of Nexen 40%, Bow Valley Petroleum (UK) Ltd 25%, Summit UK Oil Limited 17.5% and Atlantic Petroleum 17.5%.
The block lies in the Moray Firth area of the North Sea, around 12km southeast of the Ettrick Field, in which Atlantic Petroleum has an 8.27% equity. The Ettrick Field is currently being developed with first oil expected in 2008.
Development options are currently being investigated and include tying a number of small sour discoveries, including Bright (also part of the Atlantic Petroleum portfolio in Block 20/3a), Polecat and Marten, to the Ettrick FPSO or Buzzard FPSO.
Commenting on the farm-in Wilhelm Petersen, Managing Director of P/F Atlantic Petroleum said: "We are very pleased with the addition of the Marten discovery to our portfolio, particularly as it adds substantial reserves to our Ettrick 'core area'. Building on our strong relationship with operator Nexen and the other partners we look forward to this discovery becoming a development within the next few years."
