News

Mar 4, 2010 - 09:30 ET Antrim Sells 30% Interest in Causeway Field and Provides Operational and Strategic Update

CALGARY, ALBERTA--(Marketwire - March 4, 2010) -

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE U.S.

Antrim Energy Inc. (TSX:AEN)(AIM:AEY) ("Antrim") is pleased to provide an operational and strategic update, including:

  • the signing of a Conditional Letter Agreement to sell a 30% interest in its UK North Sea Causeway Field;
  • an update on the plans to develop the UK North Sea Fyne Field;
  • immediate drilling plans in Argentina; and,
  • the divestment of minor non-operated interests also in Argentina.

United Kingdom

Causeway Field

Antrim has signed a Conditional Letter Agreement ("CLA") with Valiant Petroleum plc to sell a 30% interest in the Northern North Sea Causeway property. In return, Antrim will receive US$21.75 million contributed to the development costs of bringing the field to production startup.

Completion of the transaction is subject to several conditions, including sanction of the Field Development Plan ("FDP") and the consent of the UK Department of Energy and Climate Change ("DECC").

As part of the transaction, Antrim will transfer related tax losses to Valiant, and, subject to formal DECC and partner consent, operatorship of the field. The CLA provides that Valiant will endeavour to finalize a revised FDP with respect to the development of the Causeway Field for submission to DECC during 2010. Following completion of the transaction, Antrim will remain a 35.5% working interest holder in the Causeway Field.

Fyne Field

The divestiture of an interest in the Northern North Sea Causeway property allows Antrim to concentrate on the development of its 'core' UK asset, the Fyne Area located in the Central North Sea in block 21/28a. In addition to the 21 million barrels of proved plus probable reserves (16 million barrels net to Antrim) in Fyne (McDaniel and Associates Consultants Ltd., 31 December 2008), Antrim holds 100% interest in three adjacent licences comprising the Greater Fyne Area. Antrim's strategy in this core area is to accelerate its development by working closely with industry partners.

Antrim is currently in discussion with FPSO providers as well as local existing infrastructure owners to select the most efficient production export route for the Fyne Field. An FPSO pre-qualification process has been conducted and engineering studies are being undertaken for an alternative subsea tieback scheme to nearby third party infrastructure. The production system is being engineered to handle up to 20,000 barrels of oil per day ("bopd") directly from the Fyne Field, with potential capacity add-ons to handle additional volume from the satellite fields. 

Antrim intends to select the optimum development scheme and progress FDP submission this year.

In addition to the Fyne development, Antrim is maturing drilling prospects on its surrounding licences (the 'Greater Fyne Area', Antrim 100%) with a view to drilling in 2011. These licences hold a best estimate of 54.9 million barrels recoverable prospective resources with a range of 29.7 million barrels (low estimate) to 105.5 million barrels (high estimate). These prospective resources have been risked for chance of discovery but not for chance of development. If a discovery is made, there is no certainty that it will be developed, or if it is developed, there is no certainty as to the timing of such development.

As previously reported, Antrim is in discussion with several potential industry partners to accelerate the development of the Fyne and Greater Fyne areas.

Argentina

Antrim's interest in Argentina has also shifted with a greater focus on its core assets in the southern region of Tierra del Fuego (Antrim 25.78%). An eight well drilling program commenced this week, with all wells planned in or nearby the Los Flamencos Gas Field. The wells will all be completed this year and are designed to increase gas and liquids production from the Los Flamencos pool.

The new wells, funded entirely from current cash flow, are intended to boost production from this field and any increased gas volumes will be shipped to the Argentine mainland. The Company has applied for "Gas Plus" pricing incentives for its new Los Flamencos gas production, which, if approved by the Federal authorities, will permit the Company to sell its gas in the higher-priced industrial market.

New gas production from the Los Flamencos Field will also allow the joint venture to conserve the gas cap currently being produced from the Los Patos Field and thus improve the Los Patos oil recovery.

Additional export capacity from the Tierra del Fuego area is anticipated later this year with the completion of a 600 million cubic feet per day capacity gas pipeline across the Straits of Magellan that will tie into the national gas network accessing the high demand Buenos Aries Province. Antrim, as part of a larger Tierra del Fuego consortium of companies, has contributed to the construction of the new pipeline.

As part of the Company's re-focus in Argentina, Antrim has sold its non- operated 40% working interest in the Puesto Guardian Concession, Salta Province effective 1st January 2010, for a consideration in the form of a US$ 1.36 million promissory note. In Antrim's assessment, the Puesto Guardian Field was reaching the end of its economic life, with net production to Antrim in the first nine months of 2009 averaging 229 bopd compared to 261 bopd for the same period in 2008. The purchaser, a subsidiary of Tripetrol Petroleum SA, will retain responsibility of all abandonment and environmental remediation work on the concession.

Effective 25th February, 2010, Antrim also relinquished its non-operated 70% working interest in the Medianera Concession and its non-operated 70% working interest in the adjacent Tres Nidos Sur Exploration Permit located in Rio Negro Province. The Medianera Concession, as previously reported, was shut-in early in 2009. Well abandonment and work obligations on the properties have been assumed by the operator of both concessions.

Following the sale of the Puesto Guardian interests, Antrim's daily production in Argentina is expected to average approximately 1,800 net barrels of oil equivalent per day ("boepd"). Production volumes are expected to increase again to in excess of 2,000 boepd with continued drilling in Tierra del Fuego.

Future strategy

With the expectation that Causeway will be funded to production and with the intention to acquire a development partner for Fyne, the Company's other North Sea activity will be weighted towards adding value by exploring for new hydrocarbons and appraising existing discoveries.

Antrim expects to be active in the recently announced 26th UK offshore licensing round, building on the success already established in the Greater Fyne Area.

In South America, the Company will also concentrate on the high value production assets in Tierra del Fuego with a view to increasing production in a rising price commodity market. The Antrim team intends to expand the Argentine operation primarily through new in-country exploration opportunities using the cash flow from existing Argentine operations. Antrim is also considering further development of its South American business and is in discussion on several growth opportunities.

Antrim views the bilateral strategy as central to its corporate development, balancing longer term and capital-intensive investments in the UK North Sea with shorter investment cycle on-shore exploration and production opportunities.

Antrim is in a strong financial position with USD $31 million in unrestricted cash and no debt.

Forward-Looking Statements

Some of the statements in this announcement are forward-looking. Forward-looking statements include statements regarding the intent, belief and current expectations of Antrim Energy Inc. When used in this announcement, the words "expects," "believes," "anticipate," "plans," "may," "will," "should", "scheduled", "targeted", "estimated" "intends to", "endeavour to" and similar expressions, and the negatives thereof, whether used in connection with the completion of the transaction contemplated by the CLA, the development of Causeway, the development of Fyne, drilling activity, future production or otherwise, are intended to identify forward-looking statements. Such statements are not promises or guarantees, and are subject to risks and uncertainties that could cause actual outcome to differ materially from those suggested by any such statements. The reader is cautioned that assumptions used in the preparation of such information may prove to be incorrect. All such forward looking statements involve substantial known and unknown risks and uncertainties, certain of which are beyond Antrim's control. Please refer to Antrim's Annual Information Form for the year ended December 31, 2008 and dated March 30, 2009 and available for viewing at www.sedar.com, for a list of risk factors. Antrim's actual results could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that Antrim will derive therefrom. All subsequent forward-looking statements, whether written or oral, attributable to Antrim or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Furthermore, the forward-looking statements contained in this news release are made as at the date of this news release.

The term "boe" may be misleading, particularly if used in isolation. A boe conversion of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

Qualified Person Review

In accordance with AIM guidelines, Mr. Terry Lederhouse , P. Eng and Vice President Commercial of Antrim, is the qualified person that has reviewed the technical information contained in this news release.


FOR FURTHER INFORMATION PLEASE CONTACT:

Antrim Energy
Stephen Greer
President & CEO
(403) 264-5111
(403) 264-5113 (FAX)
greer@antrimenergy.com
or
Antrim Energy
Scott Berry
Manager, Investor Relations
(403) 264-5111
(403) 264-5113 (FAX)
berry@antrimenergy.com
or
Antrim Energy
Terry Lederhouse
Vice President Commercial
(403) 264-5111
(403) 264-5113 (FAX)
lederhouse@antrimenergy.com
www.antrimenergy.com
or
Nominated Adviser on AIM:
RBC Capital Markets
Martin Eales
+44 (0) 20 7029 7881