Atlantic to Acquire Volantis

P/F Atlantic Petroleum announced that its wholly owned subsidiary, Atlantic Petroleum UK Limited, on Friday signed a share purchase agreement to acquire the entire issued share capital of the UK-based private exploration company, Volantis Exploration Limited.

Volantis Exploration holds equity in a total of 15 licenses in the Southern North Sea on the UK continental shelf including equity in the Centrica (Venture) operated gas discoveries Fulham and Pegasus. Centrica operates 9 of the 15 Volantis assets. Please refer to the attached table to this announcement for a complete overview of the licenses, including the respective equity percentages for each license as of 13th May 2011, to be acquired by the Atlantic Petroleum Group via the acquisition of Volantis Exploration. In addition to the current assets Volantis has outstanding license applications in the UK and Dutch sectors.

The Atlantic Petroleum Group will, subject to completion of the share purchase agreement, as a result of the transaction participate with a 35% working interest in the drilling of the exploration well, Foxtrot, on blocks 49/29e and 49/30b operated by Tullow Oil plc. Tullow Oil plc farmed into this Volantis license earlier in the year. The Foxtrot well is expected to be spudded in the summer of 2011.

As part of the transaction, six staff members from Volantis Exploration's team will join the Atlantic Petroleum Group, including Nigel Thorpe, Managing Director of Volantis Exploration, who will take up the role of Business Development Director of Atlantic Petroleum. The entire issued share capital of Volantis Exploration was previously owned by the four founders and directors of Volantis Exploration.

Commenting on the acquisition Ben Arabo, CEO of Atlantic Petroleum, said:

"We are delighted to announce the acquisition of Volantis Exploration and look forward to working with Centrica, Tullow, SEQ and GDF in the Southern North Sea. Volantis Exploration has successfully built up an attractive portfolio of exploration and appraisal licenses in the UK Southern Gas Basin, and we look forward to unlocking the potential of these assets. The Volantis Exploration team brings a wealth of knowledge and experience to Atlantic Petroleum and will form an important part of our endeavors going forward."

In a joint statement the Directors of Volantis Exploration, Nigel Thorpe, Andrew Mortimer, David Marsden and Alex Strong said:

"We are very pleased with the Atlantic Petroleum acquisition. We believe that the combined assets and the combined teams of Volantis Exploration and Atlantic Petroleum will create a good foundation for accelerating the future growth of the Atlantic Petroleum Group."

The acquisition of Volantis Exploration and its equity stakes in 15 licenses is in line with Atlantic Petroleum's strategy to further expand the Group's exploration pipeline and activities in North West Europe. Atlantic Petroleum will continue to evaluate potential asset and corporate transactions in the future development of the Group.

Atlantic Petroleum will acquire 100% of the shares in Volantis Exploration Limited for a consideration of up to GBP 8 MM in cash and shares.

Atlantic Petroleum is a Faroese independent exploration and production (E&P) company. Its group has oil and gas interests in the North Sea, East Irish Sea and Celtic Sea and on the Faroese Continental Shelf. The Group, on completion of the acquisition of Volantis Exploration, will have interests in 29 licenses containing around 50 fields, discoveries, prospects and leads. Furthermore, Atlantic Petroleum will have partnerships with 27 international oil companies operating in North West Europe. The objective of Atlantic Petroleum is to develop offshore oil and gas potential in North West Europe on a commercial basis, and presently the Group engages in activities ranging from exploration, through appraisal, to development and production.