Atlantic Petroleum P/F - Financial Statement Release

Operating profit in 1Q 2011 of DKK 26.7MM (1Q 2010: DKK 22.3MM) and profit before taxation of DKK 16.2MM (1Q 2010: DKK 28.4MM)

Tórshavn, Faroe Islands, 2011-05-18 12:05 CEST (GLOBE NEWSWIRE) -- Operating
profit in 1Q 2011 of DKK 26.7MM (1Q 2010: DKK 22.3MM) and profit before
taxation of DKK 16.2MM (1Q 2010: DKK 28.4MM). Cash balance at end of 1Q 2011
was DKK 154.4MM (At year end 2010: DKK 74.3MM). 

P/F Atlantic Petroleum (OMX: FO-ATLA) today announces its results for the first
three months 2011. This company announcement should be read in conjunction with
Atlantic Petroleum's Condensed Consolidated Interim Report attached to this
announcement. 

Ben Arabo, Atlantic Petroleum's CEO, stated:

“Atlantic Petroleum generated DKK 108MM in net cash from operating activities
in the first quarter of 2011. Cash balance at the end of the quarter was DKK
154.4MM which means that Atlantic Petroleum is in a net cash position in
relation to bank debt by DKK 4.4MM by the end of the quarter. 

The strong cash position enables Atlantic Petroleum to invest in future growth.

With the recent farm in to the UK Orchid prospect and the acquisition of
Volantis Exploration adding 15 licenses, we have - including the Statoil
operated Brugdan II well on the Faroese shelf - 3 firm exploration wells to be
drilled within 12 months. This is just the first step in building an
exploration portfolio with the goal of participating in more than 10
exploration wells within the next 3 years. 

The Volantis acquisition adds a new core area for Atlantic Petroleum that can
bring significant upside to the company and the acquisition also brings
significant skills and resources to Atlantic Petroleum which will help the
company on its upward trajectory.” 

Highlights

 Operational



  -- Total production in 1Q 2011 amounted to 205,000 boe (barrels of oil
     equivalent) corresponding to an average of 2,277 boepd (barrels of oil
     equivalent per day) net to Atlantic Petroleum
  -- Production from the Ettrick field has been relatively stable and within the
     lower range of expectations. Ettrick production was influenced by technical
     issues related to gas compression at the beginning of the year
  -- The Chestnut field is producing at steady rates. Due to lack of water
     injection the field is producing under certain bottom hole pressure
     constraints in order to maintain stable conditions until water injection
     has been reinstated
  -- Perth field evaluation and development concept selection process is
     on-going as planned
  -- On 5th April Atlantic Petroleum´s equity increased from 8.27% to 9.40% in
     Blackbird. Atlantic Petroleum and Nexen are developing the Blackbird field
     on a Sole Risk basis after Dana Petroleum elected not to participate in the
     development.
  -- On 12th April Atlantic Petroleum farmed into UK licence P.1556, Block
     29/1c, Orchid, with a 10% working interest effective 1st March 2011. An
     exploration well is planned to be drilled in 3Q 2011
  -- On 13th May Atlantic Petroleum signed an agreement to acquire privately
     held Volantis Exploration Limited. Volantis holds 15 exploration licences
     containing the Pegasus and Fulham discoveries. The acquisition, when
     completed, more than doubles the number of Atlantic Petroleum licences from
     14 to 29. Six staff members from Volantis will join Atlantic Petroleum UK
     Limited. The deal is subject to completion.
  -- As a result of the Volantis acquisition Atlantic Petroleum will participate
     with a 35% working interest in the Tullow Oil operated Foxtrot exploration
     well on UK licence P.1716, Block 49/29e & 49/30b planned to be drilled
     in 3Q 2011

Financial



  -- Revenues in 1Q 2011 of DKK 112.0MM (1Q 2010: DKK 76.9MM). Average realised
     oil price in 1Q 2011 was 101.5 USD/bbl
  -- Operating profit (EBIT) in 1Q 2011 of DKK 26.7MM (1Q 2010: DKK 22.3MM) and
     earnings before interest, tax, depreciation and amortisation (EBITDA) in 1Q
     2011 of DKK 64.2MM (1Q 2010: DKK 44.0MM)
  -- Profit before taxation in 1Q 2011 of DKK 16.2MM (1Q 2010: DKK 28.4MM)
  -- Net cash from operating activities in 1Q 2011 of DKK 108.0MM (1Q 2010: DKK
     47.6MM)
  -- Cash position at end of 1Q 2011 was DKK 154.4MM (At year end 2010: DKK
     74.3MM)
  -- Total assets at end 1Q 2011 of DKK 670.5MM (At year end 2010: DKK 671.8MM)
  -- Total shareholder's equity at end 2011 of DKK 378.1MM (At year end 2010:
     DKK 377.9MM)
  -- The Company hedged 14% of average monthly production in 1Q and realised a
     loss of DKK 2.2MM
  -- Bank debt was DKK 150.0MM by the end of 1Q 2011 of which DKK 97.5MM was
     long term. A total of DKK 12.3MM was repaid in 1Q 2011

2011 Outlook

Operational



  -- Production is expected to be within the range of 2,100 - 2,600 boepd
  -- The Blackbird field development is on-going and during the summer the
     subsea infrastructure will be installed. It is estimated that first oil can
     be achieved by January 2012
  -- Options for reinstating water injection on the Chestnut field are currently
     being considered, and include the drilling of a sidetrack to the existing
     water injector well and recompletion of the reservoir section expected in
     3Q 2011
  -- On the Perth field, the plan is to complete the development concept
     selection process and to submit a Field Development Plan in 3Q 2011
  -- A water injector well is budgeted for 2011 on the Ettrick field and if
     recommended, dependent on final planning, it will be drilled in 4Q 2011
  -- Drill an exploration well on the Orchid prospect in 3Q 2011
  -- Drill an exploration well on the Foxtrot prospect in 3Q 2011

Financial



  -- Operating profit (EBIT) for the year 2011 is expected to be in the range
     DKK 90MM - 150MM for 2011. This is based on the initially estimated average
     oil price of 90 USD/bbl in 2011 and average currency exchange rates of
     USD/DKK 5.50 and GBP/DKK 8.70
  -- Investments in exploration and appraisal activities are estimated to be
     around DKK 47MM for the whole year 2011
  -- Investments in field developments are estimated to be around DKK 134MM for
     the whole year 2011
  -- The Company's debt is expected to be reduced by around DKK 50MM in 2011
  -- The Company has engaged in oil price hedging to secure a more stable
     revenue stream. Approximately 13% of current production has been hedged 12
     months ahead. Average oil price hedged at is USD 102 per barrel

Conference call

In connection with the publication of the 1Q 2011 Condensed Consolidated
Interim Report Atlantic Petroleum will host a webcast/conference call for
analysts and investors. 

The webcast/conference call will take place on Thursday 18th May, at 14.00
(CEST).  If you would like to participate in the conference call, please dial
the relevant number below a few minutes before the conference starts: 

- DK: +45 70140453
- UK: +44 (0) 2071086303


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. 20/2011

Issued 18-05-2011


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

Attachments:

1Q 2011 Condensed Consolidated Interim report 31-03-2011.pdf