P/F Atlantic Petroleum announces that the Standard Exploration Licence (SEL) 2/07 licence partners have agreed to farm down up to 65% equity interest in the Nemo heavy oil discovery in the Celtic Sea, Offshore Ireland to Nautical Petroleum plc.

The Nemo heavy oil accumulation underlies the Ardmore gas field in SEL 2/07 and is situated approximately 60 kilometers offshore Ireland in the North Celtic Sea Basin in about 90 meters water depth. Discovered in 1974, this approximately 16 degree API heavy oil accumulation is estimated by the operator to have an in place resource potential of up to 230 MMBbls.

In return for an initial 25% stake, Nautical will fund and carry out a focused work programme on the development feasibility of the Nemo discovery. Nautical has an option to increase its stake to 65% and assume operatorship should it elect by the end of 2011 to drill an appraisal well on Nemo. Nautical is currently involved in a number of similar heavy oil field developments in the UK North Sea including the Kraken discovery, which it operates, and Mariner, which is operated by Statoil. In addition, Nautical recently farmed into the Baltimore heavy oil discovery in nearby block 48/19(p) where a development feasibility study is ongoing.

Atlantic Petroleum currently holds 18.3% interest in Nemo with operator Providence (72.5%) and partner Sosina Exploration (9.2%). In the event that Nautical exercises its option and drills a well, the participating interests would be Nautical (65%), Providence (25.3%), Atlantic Petroleum (6.4%) and Sosina Exploration (3.2%). The farm-out transaction is subject to Irish governmental approval.

Ben Arabo, Atlantic Petroleum's CEO, stated 'We are pleased to be collaborating with a company that has heavy oil expertise that will help unlock the potential of the Nemo discovery and other heavy oil discoveries in the Celtic Sea.'

Tags: Atlantic Petroleum