Atlantic Petroleum P/F - Ársreikningur

Operating profit (EBIT) was DKK 35.8MM in 2Q and DKK 58.1MM in 1H 2010.

Operating profit (EBIT) was DKK 35.8MM in 2Q and DKK 58.1MM in 1H 2010. Profit
before taxation was DKK 76.7MM in 2Q and DKK 105.1MM in 1H 2010. Best interim
result since company inception. Expected production for the year 2010 increased
to 850,000 - 930,000 barrels of oil equivalents (boe) and expected EBIT
increased to the range DKK 90MM - DKK 110MM. 


Tórshavn, Faroe Islands 18th August 2010 - Atlantic Petroleum (OMX: FO-ATLA)
today announced its results for the first six months 2010. This company
announcement should be read in conjunction with Atlantic Petroleum's Interim
Consolidated Financial Statement attached to this announcement. 


Solid Foundation for Growth

Ben Arabo, Atlantic Petroleum's CEO, stated:
“With two fields now in production and an operating profit of DKK 58.1MM for
the first half of 2010, Atlantic Petroleum is very well positioned to grow from
the strong base that the two producing assets provide. The success on Blackbird
during the last quarter is a very important step in securing Atlantic
Petroleum's near term growth. The company's debt position has changed
dramatically since 2009. This strengthened position will provide a momentum for
growth in the near term, and will enhance the company's options going forward.
Atlantic Petroleum will use the current momentum to acquire reserves to secure
near term growth and stability whilst building the exploration portfolio to
provide the longer term upside. In summary, the 2Q results presented today
provide a solid foundation for growth and the future of Atlantic Petroleum. ” 

Highlights

Operational 

•	Total production in 1H 2010 was 419,600 boe corresponding to an average
production of 2,318 boepd (barrels of oil equivalents per day). The production
in 2Q 2010 amounted to 245,635 boe (1Q 2010: 173,966 boe), corresponding to an
average of 2,699 boepd (1Q 2010: 1,933 boepd) net to Atlantic Petroleum.
Production in 1H 2010 was associated with stable production from the Chestnut
field while production from the Ettrick field was lower than expected,
especially in Q1, due to technical problems with the production facilities 

•	Two production wells have been drilled and completed successfully on the
Ettrick field. The 20/2a-E3Z well was a sidetrack of the 20/2a-E3 well drilled
in 2007, and was drilled to optimise the location of the wellbore within the
reservoir. The other production well was the 20/2a-E7Z well, drilled in a
location north of the main Ettrick field. The addition of these two wells has
markedly improved the production potential of the field 

•	The Blackbird appraisal well has been drilled over the summer and a well test
was carried out during July and August to evaluate the quality of the
discovery. The results to date suggest that Blackbird will probably be
developed and tied back to the Ettrick production facilities. The final
decision for development is anticipated to be taken later this year 

•	On Faroes licence 016, the seismic data acquired in 2009 have been processed
and interpretation is ongoing. A sea bed sampling programme will be conducted
during the next few months 

•	In the Irish Licence SEL 2/07 various projects have been initiated to
evaluate whether it is possible to develop the Helvick and Hook Head fields via
an unmanned buoy facility and whether the low API oil accumulation at Ardmore
can be commercialised 

•	The Marten Licence has been granted a two year extension to the summer of 2012

Financial 

•	Revenues of DKK 104.2MM in 2Q 2010 (2Q 2009: DKK 50.0MM) and DKK 181.1MM in
1H 2010 (1H 2009: DKK 76.6MM). Average realised oil price increased to 77.64
USD/bbl in 2Q 2010 from 76.96 USD/bbl in 1Q 2010. The average realised oil
price for 1H 2010 was 77.34 USD/bbl 
•	Gross profit of DKK 39.5MM in 2Q 2010 (2Q 2009: DKK 15.2MM) and DKK 65.5MM in
1H 2010 (1H 2009: DKK 11.0MM) 
•	Operating profit (EBIT) of DKK 35.8MM in 2Q 2010 (2Q 2009: DKK -97.5MM) and
DKK 58.1MM in 1H 2010 (1H 2009: DKK -112.9MM) 
•	Profit before taxation of DKK 76.7MM in 2Q 2010 (2Q 2009: DKK -56.9MM) and
DKK 105.1MM in 1H 2010 (1H 2009: DKK -48.2MM) 
•	Net cash flow from operating activities in 1H 2010 of DKK 132.8MM (1H 2009:
DKK 28.1MM) 
•	Total assets of DKK 708.7MM (At year end 2009: 646.8MM)
•	Total shareholder's equity of DKK 362.6MM (at year end 2009: 279.0MM)
•	General and administration costs reduced to DKK 3.5MM from DKK 4.5MM in 2Q
2009 
•	The bank debt as of 31st December 2009 was DKK 283.7MM of which DKK 118.7MM
was short term and DKK 165.0MM was long term debt. The Company has paid down
short term bank loans of DKK 71.7MM during the first half of 2010. By the end
of 1H 2010 the bank debt was DKK 212.0MM of which DKK 47.0MM was short term and
DKK 165.0MM long term debt. As of 18th August 2010, bank debt is DKK 187.0MM of
which DKK 22.0MM is short term and DKK 165.0 long term debt. A total of DKK
96.7MM in short term bank loans have been repaid during 2010. 

2010 Outlook

Operational

•	Production in the first half of 2010 amounts to 419,000 barrels of oil
equivalents (boe), and total production to this date is approximately 550,000
boe. Based on improved production from Ettrick the total production for the
year is now expected to be between 850,000 - 930,000 boe 

•	The Blackbird appraisal well results will be evaluated in order to make a
decision later in the year whether to develop the field. It is expected that
the field will be tied back to the Ettrick field, which is located 6 km to the
north 

•	A Pre-FEED study (Pre-Front End Engineering and Design) has been initiated on
the Perth field to determine whether it is feasible to develop Perth over
existing infrastructure 

Financial 

•	EBIT is expected to increase to DKK 90 - 110MM for the year 2010 compared to
DKK 70 - 90MM previously announced. The guidance is based on an oil price of 76
USD/bbl in 2010 and an average currency exchange rate of DKK/USD of 5.60 

•	Company's debt is expected to be reduced by DKK 120MM in 2010. To this date
debt is reduced by DKK 96.7MM 

•	Investments in exploration and appraisal activities are estimated to be
around DKK 40MM for the whole year 2010 

•	Investments in field developments are estimated to be around DKK 57MM for the
whole year 2010 

•	The majority of the short term bridge loan facilities have been rolled into a
five year senior loan facility 

•	The Company has engaged in oil price hedging to secure a more stable revenue
stream. Approximately 6 per cent of current production has been hedged 12
months ahead. Average oil price hedged is 87 USD/bbl 


Audio cast/Conference call
In connection with the publication of the 2Q 2010 interim report Atlantic
Petroleum will host a conference call for analysts and investors. 
The conference call will take place on Wednesday 18th August, at 14.00 (CET). 
If you would like to participate in the conference call, please dial the
relevant number below a few minutes before the conference starts: 
- Danish  +45 32 71 47 67
- Other international +44 207 509 5139
More details about the conference call can be found on the Company's website
www.petroleum.fo. 


Further Details:

Further details can be obtained from Ben Arabo, CEO, tel +298 350100
(ben.arabo@petroleum.fo). This announcement will be available, together with
other information about Atlantic Petroleum, on the Company's website:
www.petroleum.fo. 

On the website, it is also possible to sign up for the Company's e-mail
newsletter. 

Announcement no 20/2010		                             Issued 18-08-2010

P/F Atlantic Petroleum 		                        Telephone +298 350 100
Gongin 9		                                                Fax +298 350 101
P.O.Box 1228 		                              Website: www.petroleum.fo 
FO-110 Tórshavn		                         E-mail: petroleum@petroleum.fo
Faroe Islands

Attachments:

ap 2q 2010 interim report 30-06-2010.pdf