Antrim Energy Inc. (TSX:AEN) (AIM:AEY) ("Antrim" or the "Company") Antrim Energy, an exploration and production company with interests offshore in the UK North Sea, Ireland and Tanzania, today provided an operational update of its interests in the UK North Sea.
Completion of water injector to increase production from Causeway Field underway - field currently producing 4,500 bopd (1,600 bopd net to Antrim)
Resumption of production from Cormorant East Field following a precautionary shutdown of the Cormorant Alpha platform and Brent Pipeline System - currently performing production diagnostic testing
Submission of Draft Field Development Plan ("FDP") for Fyne Field to DECC on January 14, 2013 - approval expected by 2Q 2013
Antrim election to not participate in further development work on the Fionn Field - retains 35.5% interest in remainder of P201 Block 211/22a South East Area
Rig operations are currently underway to complete the water injector for the Causeway Field in licence P1383 Block 211/23d (Antrim 35.5% interest). The operations, on the previously drilled well (211/23d-18), are expected to be finished in February 2013. Startup of both the water injection and the electrical submersible pumps are scheduled for the second half of 2013, following the completion of topside modifications on the Taqa Bratani Limited ("TAQA") operated North Cormorant Production Platform. Currently, the Causeway Field is producing approximately 4,500 bopd (Antrim net 1,600 bopd) under primary depletion.
Projected costs associated with the development of the smaller Fionn Field, adjacent to the Causeway Field in licence P201 Block 211/22a South East (Antrim 35.5% interest), have risen to the extent that the project no longer meets Antrim's economic criteria. Antrim has therefore elected to opt out of the Fionn Field development, in accordance with the previously announced agreement (January 23, 2012) with operator Valiant Petroleum plc ("Valiant"). Subject to all necessary approvals from the UK Department of Energy and Climate Change ("DECC"), Antrim will withdraw from the Fionn Field subarea and retain no further liabilities, including no remaining decommissioning or well abandonment liabilities. Valiant has paid 100% of the costs to date associated with the field. Antrim remains a 35.5% interest owner of the remainder of P201 Block 211/22a South East Area.
Cormorant East Field
Production from Cormorant East Field (licence P201 Block 211/22a Contender Area, Antrim 8.4% interest) resumed January 20, 2013 following a precautionary shutdown of the Cormorant Alpha platform and Brent Pipeline System. Currently, production is temporarily shut in to assess well integrity and reservoir potential via downhole pressure monitoring. The field is initially being produced under primary depletion via a single production well tied directly to and accessible from the North Cormorant Platform, with the potential to install water injection at a later date. Under the terms of a farm-out agreement, TAQA funded Antrim's working interest share of the drilling, completion and tie-in costs of the discovery well. Antrim's share of the completion and tie-in costs will be recovered by TAQA from Antrim's share of initial production revenue. Future drilling locations are being considered by the partners.
A draft FDP for the Antrim-operated Fyne Field in licence P077 Block 21/28a (Antrim 100% interest) was submitted to DECC on January 14 2013, with approval expected by April 2013. Front end engineering design ("FEED") work for the subsea facilities and the modifications of the floating production, storage and offloading vessel ("FPSO") is underway. As previously announced on November 13 2012, a Heads of Terms agreement has been signed with Hummingbird Production Limited, a subsidiary of Teekay Corporation, for an option to lease the "Hummingbird Spirit" FPSO for use in the development of the Fyne Field. First oil is expected in Q4 2014, contingent on the timing of the redeployment of the Hummingbird Spirit from its current location. Proved plus Probable oil reserves in the Fyne Field are estimated at 11.7 million barrels (McDaniel and Associates Consultants Ltd., as of September 30, 2012).
In addition to the foregoing operational update, Antrim announces that it has appointed London, U.K. - based Buchanan Ltd. to act as financial and investor relations advisor to the Company. The account will be led by Tim Thompson and supported by Tom Hufton.
Stephen Greer, Antrim President and CEO, commented:
"The pace of Antrim's activity in the UK North Sea continues to grow. The completion of the water injector is an important step towards enhancing production rates and recovering the optimum reserves from the Causeway Field. On the adjacent licence, the initial flow rates and pressure data from the Cormorant East Field suggest the possibility of further appraisal and development drilling, and may open up the possibility of further exploration and appraisal work in adjacent fault compartments and in the area of the 2007 Kerloch oil discovery.
"Antrim's decision to opt out of further development work on the Fionn Field allows the Company to focus on the more attractive Cormorant East and Fyne developments. Antrim's commitment to growth in the UK North Sea was recently underscored by the option to lease the Hummingbird FPSO, breaking the log jam created by the lack of available production infrastructure in the Fyne area.
"Antrim will continue to fast track this development, which is expected to receive government approval in Q2 2013 with first production scheduled for late 2014. As Fyne is 100% owned by Antrim, this will represent a significant step change in the profile of the Company and we look forward to further establishing ourselves as a quality North Sea Operator."
Additional information concerning Antrim Energy Inc. is available at www.antrimenergy.com. Investor inquiries may be directed to [email protected] or 1-403-264-5111.