Atlantic Petroleum P/f · OMXCOP:ATLA_DKK

Atlantic Petroleum P/f — Atlantic Petroleum — Shareholder Meeting (April 2014)

50 slides from Atlantic Petroleum P/f's shareholder meeting presentation, Apr 9, 2014

  1. Slide 1: Annual General Meeting

    Tórshavn – 9th April 2014 ANNUAL GENERAL MEETING

  2. Slide 2: Disclaimer

    DISCLAIMER  This presentation includes statements regarding future results, which are subject to risks and uncertainties. Consequently, actual results may differ significantly from the results indicated or implied in these statements  No representation or warranty (expressed or implied) is made as

  3. Slide 3: Chairman's Statement 2013

    CHAIRMAN’S STATEMENT 2013 ANNUAL GENERAL MEETING – 9TH APRIL 2014 3

  4. Slide 4: 2013 – Progress and Challenges

    AGENDA  2013 – Progress and Challenges  Production was roughly in line with expectations – unplanned production downtime towards the end of the year  Oil prices were stable at decent levels throughout the year  Reserves increased significantly  However, the financial result was not satisfactory

  5. Slide 5: Oil Production in 2013

    OIL PRODUCTION IN 2013 ANNUAL GENERAL MEETING – 9TH APRIL 2014 5

  6. Slide 6: Oil Prices in 2013

    OIL PRICES IN 2013 ANNUAL GENERAL MEETING – 9TH APRIL 2014 6

  7. Slide 7: The Market Price of Atlantic Petroleum

    THE MARKET PRICE OF ATLANTIC PETROLEUM ANNUAL GENERAL MEETING – 9TH APRIL 2014 7

  8. Slide 8: AP vs. Small Cap Denmark

    AP VS. SMALL CAP DENMARK ANNUAL GENERAL MEETING – 9TH APRIL 2014 8

  9. Slide 9: AP vs. Peer Group

    AP VS. PEER GROUP ANNUAL GENERAL MEETING – 9TH APRIL 2014 9

  10. Slide 10: E&A Write-downs per Asset

    E&A WRITE-DOWNS PER ASSET ANNUAL GENERAL MEETING – 9TH APRIL 2014 10

  11. Slide 11: The Oslo Listing and De-listing from Iceland

    THE OSLO LISTING AND DE-LISTING FROM ICELAND  The purpose of the Oslo listing and de-listing from Iceland  To finance exploration in Norway  To strengthen the balance sheet in preparation for Kells which improves borrowing terms for funding development assets  Increase liquidity in the stock  T

  12. Slide 12: Analyst Update – April 2014

    ANALYST UPDATE – APRIL 2014  Atlantic Petroleum is now covered by 3 analysts - Nordea - Carnegie - ABG Sundal  Huge dispersion in valuations - Nordea: 25/3-2014 (Sell – DKK 92) - Carnegie: 17/3-2014 (Buy – NOK 200) - ABG Sundal : 17/3-2014 (Buy – NOK 190) ANNUAL GENERAL MEETING – 9TH APRIL 2014 12

  13. Slide 13: The Current State of Affairs

    THE CURRENT STATE OF AFFAIRS  Atlantic Petroleum is still well placed with:  strong cash position  lots of oil in the ground – Largest reserves base ever  several high impact projects in the pipeline – set to double production over the next years  The way forward in 2014 – 2015  Atlantic Petro

  14. Slide 14: Operational Review 2013 & Forward Plans

    OPERATIONAL REVIEW 2013 & FORWARD PLANS ANNUAL GENERAL MEETING – 9TH APRIL 2014 14

  15. Slide 15: This is Atlantic Petroleum

    THIS IS ATLANTIC PETROLEUM NW Europe exploration and production company Licence overview  42 licenses on UK, Norwegian, Faroese, Irish and Chestnut: 965 boepd in 2013 Dutch continental shelves Ettrick: 810 boepd in 2013  Three producing fields Blackbird: 200 boepd in 2013 Orlando: (2,750 boepd 201

  16. Slide 16: Significant Achievements in 2013

    SIGNIFICANT ACHIEVEMENTS IN 2013  Acquired High Value Barrels through the  Listed on the Oslo Stock Exchange to completion of the acquisition of 25% working attract a broader investor base and wider interest in UK licenses P1606 and P1607 analyst coverage containing the development assets Orlando

  17. Slide 17: Reserves (CPR Numbers)

    RESERVES (CPR NUMBERS) MMBoe 60 Reserves 50 Contingent resources Prospective resources 40 30 20 10 0 2009 2010 2011 2012 2013 1) Source: Competent Person’s Reports by Fugro Robertson (year 2009-2012) & GCA (year end 2013) ANNUAL GENERAL MEETING – 9TH APRIL 2014 17

  18. Slide 18: Orlando Field Development

    ORLANDO FIELD DEVELOPMENT Orlando Field – UK Block 3/3b  Iona Energy 75% (Operator), Atlantic Petroleum 25% Acquired in 2013 for $30million plus future production payments of $7.25million CPR estimates  Orlando net 2P reserves of 3.8 Mmboe  NPV10 post tax stand alone $63.1mm High value barrels –

  19. Slide 19: Orlando Field Development

    ORLANDO FIELD DEVELOPMENT Orlando Field  Small field approximately 10km NE of Ninian Central Platform  1988 discovery by Chevron, appraised by two wells in 2011/2012  High quality Brent reservoir with 18% porosity and 50mD permeability  32 degree API oil  Large active underlying aquifer Straigh

  20. Slide 20: Kells Field Development

    KELLS FIELD DEVELOPMENT Kells Field - UK Block 3/8b  Iona Energy 75%, Atlantic Petroleum 25% Development plan  Subsea tieback of one or two wells to Ninian Central Kells Field Platform. UK Block  Second well 18 months after first production 3/8b  Utilises existing topside equipment and shares Or

  21. Slide 21: Indicative Production Profile

    INDICATIVE PRODUCTION PROFILE Production Profile 2014-2020 Assumptions boe/d  Production profile beyond 2014 based Chestnut Ettrick Blackbird Orlando Kells on Gaffney Cline & Associates 6000 (”GCA”) 2P reserves as of 31st December 2013 5000  Assumes Orlando first oil in 2015 and 4000 Kells first o

  22. Slide 22: Perth

    PERTH Comments Perth – P588 15/21b & 15/21c  Located in the UK sector of the Central North Sea JV partners and interests:  Parkmead Group (Operator) 52.13%  Faroe Petroleum Limited 34.62%  Atlantic Petroleum 13.35% CPR Estimates  5.1MMBbl 2C contingent resources Development Plans  Several sour

  23. Slide 23: Perth & Lowlander

    PERTH & LOWLANDER Source: Faroe Petroleum Unlocking the assets has potential to generate exceptional return ANNUAL GENERAL MEETING – 9TH APRIL 2014 23

  24. Slide 24: Chestnut

    CHESTNUT Comments Map Chestnut – P354, Block 22/2a  Located in the UK sector of the Central North Sea JV partners and interests:  Centrica Energy Upstream (Operator) 69.875%  Dana Petroleum (E&P) Limited 15.125%  Atlantic Petroleum 15.000% Wells  2 production wells – 22/2a -11X started producti

  25. Slide 25: Chestnut: Continued Performance Above Expectations

    CHESTNUT: CONTINUED PERFORMANCE ABOVE EXPECTATIONS  Production has increased over the last three years through increasing the choke size whilst monitoring for sand production  Water Cut has stabilised just below 50%  Ultimate Recoverable Reserves (URR) have consistently increased over field life

  26. Slide 26: Ettrick

    ETTRICK Comments Map Ettrick – P317 and P273, Blocks 20/2a and 20/3a  Located in the Moray Firth region of the UK North Sea JV partners and interests:  Nexen UK Limited (Operator) 79.73%  Dana Petroleum (E&P) Limited 12.00%  Atlantic Petroleum 8.27% Wells  7 production wells and 2 water injecti

  27. Slide 27: Blackbird

    BLACKBIRD Comments Map Blackbird – P317, P273 and P1580, Blocks 20/2a, 20/3a and 20/3f  Located in the Moray Firth region of the UK North Sea JV partners and interests:  Nexen UK Limited (Operator) 90.60227%  Atlantic Petroleum 9.39773% Wells  1 production well and 1 water injector – Subsea tie

  28. Slide 28: Ettrick & Blackbird – Field Extension Activities

    ETTRICK & BLACKBIRD – FIELD EXTENSION ACTIVITIES Blackbird Ettrick Well Intervention Ettrick 2nd water Ettrick Infill Planned Blackbird first oil campaign (3 wells) injection well production well Infill production well Continued Investment has extended the life of Ettrick and Blackbird ANNUAL GENERA

  29. Slide 29: Faroes Exploration

    FAROES EXPLORATION  Through its regional knowledge, AP is pursuing the East Faroe ridge, the next ridge across from the Corona/Westray ridge system in the UK  Significant discoveries in the UK play include Rosebank/ Lochnagar, Cambo, Tobermory  The Brugdan II well will be a key data point in dete

  30. Slide 30: Faroes L006 - Brugdan

    FAROES L006 - BRUGDAN JV partners & equities:  Statoil (operator) 35%  ExxonMobil 49%  OMV 15%  Atlantic Petroleum 1% Area:  Faroe Shetland Basin  Extremely large four way dip closure with prognosed Palaeocene Vaila Formation reservoir History:  Brugdan I drilled in 2006:  Failed to reach Va

  31. Slide 31: SNS Carboniferous Play Fairway

    SNS CARBONIFEROUS PLAY FAIRWAY  Atlantic Petroleum accessed considerable expertise and exposure to SNS, especially the emerging Carboniferous play fairway through its purchase of Volantis  Several TCF of gas have been discovered in the Carboniferous play in recent years including the Pegasus (AP10

  32. Slide 32: UK P1724 - Pegasus

    UK P1724 - PEGASUS JV partners & equities:  Centrica (operator) 55%  Viking UK Gas (Third Energy) 35%  Atlantic Petroleum (Volantis) 10% Area:  Southern North Sea, close to Cavendish Field and export routes  Intra-Carboniferous structures, reservoirs & seals Appraisal of 2011 Discovery:  Pegas

  33. Slide 33: Norway Entry

    NORWAY ENTRY  Atlantic Petroleum’s entry into Norway is for the long term PL659  Atlantic Petroleum fulfils the stringent requirements set by the Norwegian authorities to become a licensee in Norway  A remote approach where a company does not build the proper organization and allocates the approp

  34. Slide 34: PL659 Langlitinden

    PL659 LANGLITINDEN Blocks 7221/12, 7222/10,11,12, and parts of 7121/3, 7122/1,2 Det Norske 20% (Op), Petoro 30%, Lundin 20%, Tullow 15%, Langlitinden oil discovery Rocksource 5%, Atlantic 10% Caurus gas  Well 7222/11-2 was spudded January 14th and completed on discovery 27th February 2014. The well

  35. Slide 35: Building a Position Around New Infrastructure

    BUILDING A POSITION AROUND NEW INFRASTRUCTURE PL5228 Ivory (Blocks 6707/8,9,11 and 6707/10 (part)) – Farm in 2013  See next slide PL 763 Karius (Blocks 6606/2,3) – APA 2013 award Repsol 40% (Op), Rocksource 30%, Atlantic 30%  Several prospects and leads, and the main target is a robust structure a

  36. Slide 36: PL528/528B Norwegian Sea – Ivory

    PL528/528B NORWEGIAN SEA – IVORY Blocks 6707/8,9,11 and 6707/10 (part) Centrica 40% (Op.), Statoil 35%, Rocksource *20% (10-25%) Atlantic *5% (5-15%)  Gross recoverable resources up to 306 MMboe  Gas prone area with possibility for oil  Adjacent to Aasta Hansteen field (2017 first gas)  Seismic

  37. Slide 37: Exploration Portfolio – High Potential Projects

    EXPLORATION PORTFOLIO – HIGH POTENTIAL PROJECTS 300 250 200 mm boe 150 100 net resources net risked resources 50 0 2014 2015 2016 2017 Significant portfolio inventory targeting material volumes ANNUAL GENERAL MEETING – 9TH APRIL 2014 37

  38. Slide 38: Exploration Portfolio – High Potential Projects

    EXPLORATION PORTFOLIO – HIGH POTENTIAL PROJECTS • It takes time to build up an exploration portfolio • It takes resources – capital and human resources – to get into the right assets with the right partner companies – Largest operator of Atlantic Petroleum assets is Centrica • Atlantic Petroleum has

  39. Slide 39: Market Price vs Cash + NPV per Share

    MARKET PRICE DKK/Share Cash + NPV (10)/Share Assumptions Exploration potential • Exploration  NPV(10) Data from Gaffney Cline & potential not Associates (”GCA”) CPR as at 31st valued December 2013 (prepared for AP, • Perth not valued March 2014)  2P Oil and Gas profiles Cash and Oil/Gas Reserves K

  40. Slide 40: Keeping the Balance from Short Term to Long Term

    KEEPING THE BALANCE FROM SHORT TERM TO LONG TERM Production Profile 2014-2020 Assumptions Short Term Mid Term Long Term Possibilities boe/d  Production profile beyond 2014 based Chestnut Ettrick Blackbird Orlando Kells on Gaffney Cline & Associates 6000 (”GCA”) 2P reserves as of 31st • New • Orland

  41. Slide 41: Market Context - Oil Price

    MARKET CONTEXT - OIL PRICE Source: Pareto, March 2014 ANNUAL GENERAL MEETING – 9TH APRIL 2014 41

  42. Slide 42: 2014 Activity Outlook & Summary

    2014 ACTIVITY OUTLOOK & SUMMARY 2014 LICENCE 1Q 2Q 3Q 4Q UK P1724 Pegasus West (Committed) Exploration well Exploration PL528 Ivory (Committed) Exploration well Norway PL659 Langlitinden (Committed) Exploration well Faroe L006 Brugdan II (Committed) Exploration well Islands Production P317, P273, &

  43. Slide 43: Financials

    FINANCIALS ANNUAL GENERAL MEETING – 9TH APRIL 2014 43

  44. Slide 44: 2013 Highlights (Group)

    2013 HIGHLIGHTS (GROUP)  Revenues of DKK 417.4MM in 2013 (2012: DKK 596.7MM) - Average realised oil price in 2013 was USD 109.2 per barrel (2012: USD 112.3)  Operating profit (EBIT) of DKK -1.6MM in 2013 (2012: DKK 246.8MM)  Profit before taxation of DKK -11.6MM in 2013 (2012: DKK 227.7MM)  Net

  45. Slide 45: 2013 Income Statement (Group)

    2013 INCOME STATEMENT (GROUP) DKK 1,000 2013 2012 Revenue 417,421 596,745 Cost of sales -221,767 -274,888 Gross profit 195,655 321,857 Exploration expenses -119,647 -27,209 Pre-licence exploration costs -11,064 -7,962 General and administration costs -66,572 -39,930 Other operating income 0 14 Opera

  46. Slide 46: 2013 Income Statement (Group)

    2013 INCOME STATEMENT (GROUP) DKK 1,000 2013 2012 Revenue 417,421 596,745 Cost of sales -221,767 -274,888 Gross profit 195,655 321,857 Exploration expenses Admin of Norwegian -119,647 -27,209 Pre-licence exploration costs assets subject to 78% -11,064 -7,962 General and administration costs tax refu

  47. Slide 47: 2013 Balance Sheet and Cash Flow (Group)

    2013 BALANCE SHEET AND CASH FLOW (GROUP) DKK 1,000,000 End 2013 End 2012 Balance sheet Total assets 1,237.2 1,121.8 - Cash and cash equivalents 184.6 242.5 Equity 597.3 537.1 Bank debt 103.1 78.0 - Long term 58.5 58.5 - Short term 44.6 19.5 2013 2012 Cash flow Net cash from operating activities 219.

  48. Slide 48: 2013 Income Statement (Parent)

    2013 INCOME STATEMENT (PARENT) DKK 1,000 2013 2012 Revenue 0 0 Cost of sales 0 0 Gross profit 0 0 Exploration expenses -124 -9,080 Pre-licence exploration costs -90 -703 General and administration costs -20,593 -17,294 Other operating income 15,422 15,854 Operating profit -5,386 -11,223 Interest rev

  49. Slide 49: 2013 Balance Sheet and Cash Flow (Parent)

    2013 BALANCE SHEET AND CASH FLOW (PARENT) DKK 1,000,000 End 2013 End 2012 Balance sheet Total assets 557.4 426.9 - Cash and cash equivalents 100.4 8.5 Equity 384.1 283.4 Bank debt 78.0 78.0 - Long term 58.5 58.5 - Short term 19.5 19.5 2013 2012 Cash flow Net cash from operating activities 1.6 -0.8 N

  50. Slide 50: Contact

    CONTACT Headquarters, Faroe Islands P/F Atlantic Petroleum Yviri við Strond 4 P.O.Box 1228 Faroe Islands Tel +298 350100 Norway office, Bergen Atlantic Petroleum Norge AS Edvard Griegsvei 3c 5059 Bergen Norway Tel +47 99205989 UK office, London Atlantic Petroleum (UK) Limited 26/28 Hammersmith Grove

Atlantic Petroleum — Shareholder Meeting (April 2014) on 6ix