Atlantic Petroleum expects to write off nearly all remaining Orlando-related assets after Serica Energy shut the field permanently following an ESP failure. The Faroese company holds royalty and deferred consideration from a 2017 sale.
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Atlantic Petroleum said it expects to write off substantially all remaining assets tied to the Orlando Field after Serica Energy permanently shut the North Sea project. The Faroese company holds royalty and deferred consideration from the 2017 sale of its stake in the field.
Serica reported that production from Orlando ceased in May after a failure of the electrical submersible pump. The field is a subsea tie-back to the Ninian platform, which is scheduled to close in 2027. Serica said the remedial work needed to restore production was not economically justified given the short remaining life of the host platform.
Atlantic Petroleum's economic interest was structured as a stream of payments tied to continued output. With production now permanently stopped, the company said it expects the carrying value of its Orlando-related assets to be reduced to a level close to nil. The impairment will be booked in its forthcoming financial statements.
The company said it is still assessing the precise accounting consequences but does not expect any material future value from the interest.
Orlando is a small field in the UK central North Sea, brought online in 2014. Its early shutdown fits a broader pattern in the basin. As large platforms age, operators are increasingly reluctant to spend on repairs for subsea satellite fields that have only a few years of production left. The North Sea has seen a wave of early field closures, removing barrels that were still in official reserves but became uneconomic at the margin.
For Atlantic Petroleum, the write-off closes a chapter that began when it sold its operated stake to Serica eight years ago. The company retains no other producing assets of material size. Its shares trade on the Nasdaq First North in Copenhagen under the ticker ATLA.
The final impairment amount will be determined as part of the company's financial reporting process, Atlantic Petroleum said.
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