Venture Turns on Taps at South Chestnut Well

Atlantic Petroleum has provided an operations update on the Chestnut Field, for which Venture Production is the field operator and holds a 69.875% working interest in the part of block 22/2a containing the Chestnut.

The South Chestnut well has now been connected to the main Chestnut Field. This new producer will increase the daily production significantly and imply only marginal extra opex costs.

The Chestnut Field was brought on stream on September 20, 2008 with a horizontal production well, the 22/2a-11X, tied back to the Hummingbird FPSO. By January 31, 2009, this well had produced 1.4 million barrels of oil of which 225,000 barrels are net to Atlantic Petroleum. This is an average daily production rate of approximately 10,500 barrels, of which approximately 1,600 barrels is net to Atlantic Petroleum. Water injection started from the 22/2a-12 well on December 24, 2008.

In the autumn of 2008, the South Chestnut field extension was successfully appraised. The 22/2a-16Y well was completed across 64 ft of oil bearing sand which production tested up to 9,000 boepd. The 22/2a-16Y well significantly adds to the field reserves and is conservatively estimated to have increased reserves net to Atlantic Petroleum from 1 MMBbls to 1.5 MMBbls. The success of the South Chestnut extension gives the partnership confidence in finding further upsides to the Chestnut Field as our understanding of the field

Production was stopped on February 7th to facilitate hook up of the new producer to the FPSO. This work is now completed and production from the 22/2a-11X has resumed. Final subsea work is expected to be completed within the next two weeks, after which the 22/2a-16Y well will be brought on stream, with a significant increase in daily production and only marginal extra operating costs.

The Hummingbird FPSO, the second of the SS300 type in operation worldwide, and the first in the North Sea, has performed as expected, with no weather downtime and only minor technical problems since first oil.

For Atlantic Petroleum, the Chestnut Field is very important. It is satisfying that a field discovered in 1986 and for a long time considered to be a marginal field, has been developed though innovative concepts, despite low oil prices, and is the first cash generator for the company.