P/F Atlantic Petroleum says that net production in 2009 amounted to 510,000 boe (barrels of oil equivalents) from the Chestnut field and 164,000 boe from the Ettrick field, totalling 674,000 boe. This compares with the Company's guidance issued on 6th November 2009 in connection with results for the first nine months of 2009, where total production for 2009 was estimated at the lower end of the range of 700,000 to 740,000 boe.

The lower than expected production in 2009 was caused by delayed commissioning of the production facilities onboard the Ettrick FPSO, Aoka Mizu, and in particular the gas compression system. In combination with limits on gas flaring imposed by the British energy authorities, DECC, this restricted the oil production from the Ettrick field.

It should, however, be noted that the lower than expected production in 2009 does not impact the expected reserves or total production over the lifetime of the Ettrick field.

Total revenues amounted to DKK 219 million in 2009.

Operational update

UK Production from the Ettrick field is currently running at 1,100 boe per day net to Atlantic Petroleum and is expected to increase to between 1,500 to 1,800 boe per day in the near future. The field performance has been positive and is expected to contribute significantly to the Company's cash flow in the coming years. The drilling of additional production wells on the Ettrick field will commence shortly. One well is a sidetrack of the 20/2a-E3 production well, drilled in 2007 at a location near the eastern pinchout of the reservoir, which will target a more favourable bottom hole location. It is expected that an additional production well will be drilled in the northern part of the field. Atlantic Petroleum has an 8.27% interest in the Ettrick field.

The Blackbird discovery was made in 2008 and an appraisal well is being planned for 2010. It is anticipated that development of the field can be initiated later in the year, and be on production by late 2011 as a subsea tieback to the Ettrick field. The resources for the Blackbird discovery are currently estimated at around 1.1 million boe net to Atlantic Petroleum.

Production of the Chestnut field is stable at around 1,300 boe per day. The field has produced 4.6 million boe to date from two producers supported by one water injection well. The field's performance has been very positive and is expected to continue production for a further three to four years. Atlantic Petroleum has a 15% interest in the Chestnut field.

Tags: Atlantic Petroleum