The Press and Journal (Inverness, Highlands, and Islands)
Atlantic looks east but does not rule out North Sea
Eurasia is ‘better fit’
Atlantic Petroleum’s boss said yesterday the firm would “never say never” to investing in the UK North Sea again, despite it pressing ahead with plans to exit the area.
Chief executive Ben Arabo added the Faroebased company was currently focused on Eurasia and hoped to start snapping up assets there this year.
Atlantic is looking at onshore and offshore prospects in the Caspian Sea and Russia, but Mr Arabo said there was nothing “on the table yet”.
He said the decision to sell up in the North Sea was made by Atlantic’s board in cooperation with the firm’s backers, including London Oil and Gas (LOG). Atlantic unveiled plans to switch its focus east last year but progress was stalled by uncertainty surrounding the sale of the UK Orlando licence.
The company initially had an agreement with Bridge Petroleum for its 25% stake in Orlando but the deal fell through.
Earlier this month, Atlantic said it had agreed to sell its interests in Orlando to Decipher Energy – led by former First Oil managing director Steve Bowyer – for £822,300.
Atlantic’s move east is now “back on track”, Mr Arabo said yesterday, adding Eurasia was a “better strategic fit” for the company than the North Sea.
He said: “The desire to go east is driven by the board and our funders.
“This does not mean the North Sea is a bad place to invest – there are good opportunities there, as Orlando shows, but it’s just not right for us at the moment.
“The opportunities in the east are different. They are often bigger and the risk profile is different.
“The investment climate has improved in the North Sea but the oil price has improved everywhere else as well. A rising tide lifts all boats.”
Asked whether he could change his mind about exiting the North Sea, Mr Arabo said: “We do not want to exclude anything, but for the moment at least we’re looking east."
He said the eastern ventures would be possible because of an improved financial position, with the firm having recently refinanced £8million-worth of debt with lenderLOGanda loan of £7.8million from Eik Bank.
Reporting 2016 results, Atlantic said pre-tax losses narrowedto £3.5million after a deficit of £95million a year earlier.
Itnotcheduprevenuesof £1.2million last year, down from £22million in 2015.
Atlantic has already sold off most of its UK and Ireland exploration assets and expects to divest the rest this year.
As of yesterday, the company had stakes in about 10 licences in the UK and Ireland, including Ettrick and Blackbird, which ceased production in June 2016.
Its Norwegian subsidiary's assets were sold to M Vest Energy in January, marking the firm's exit from upstream activity in the Scandinavian country.