TØRSHAVN, Faroe Islands – Atlantic Petroleum subsidiary Atlantic Petroleum Norge AS has entered into a sale and purchase agreement with M Vest Energy AS for the sale of its Norwegian activities for NOK 1 ($0.11).
The Norwegian activities include all of its assets and licenses, the liabilities of the licenses, the employees and a cash balance of about NOK 19 million ($2.2 million) to be adjusted for costs and expenses from the date of the transaction, Jan. 2, 2016, to closing.
M Vest Energy AS is a company partially owned by the existing management of Atlantic Petroleum Norge.
CEO Ben Arabo said: “Following a formal sales process last year failing to solicit bids for the company or parts thereof, Atlantic Petroleum has over the past months been reviewing a range of strategic alternatives and the sale of its Norwegian activities is a step in the process of trying to resolve the issues facing the group in the current oil and gas industry market conditions.
“We believe the transaction is in the best interest of all stakeholders of the company and we are pleased that the activities in APN will be continued through M Vest Energy.”
The proposed transaction is conditional upon certain conditions including the approval from the Ministry of Petroleum and Energy and the Ministry of Finance.
In addition, Atlantic Petroleum North Sea Ltd. remains in default on the Ettrick, Blackbird, and Chestnut fields. The Ettrick and Blackbird fields are subject to forfeiture by the operator of these fields, Nexen. This is subject to certain regulatory and contractual conditions.
Also, the company has lost the rights to petroleum from the Chestnut field while in default and has a certain period in which to remedy the default.
Atlantic Petroleum is still in dialogue with a London-based group on potential solutions for the company. Discussions continue with its key creditors and stakeholders including the UK Oil & Gas Authority. If no satisfactory outcome is forthcoming, Atlantic too will likely have to undergo restructuring or face administration.
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