Atlantic Petroleum's Future Hinges on Q1 2026 Debt Deal Amid Repeated Delays

TÓRSHAVN, Faroe Islands – December 30, 2025

Atlantic Petroleum P/F announced today that the finalization of a critical debt restructuring plan, essential for its survival, has been pushed into the first quarter of 2026. This latest delay in a nine-month saga of negotiations prolongs the period of uncertainty for the Tórshavn-based oil and gas company, whose ability to continue as a “going concern” hangs precariously on both the successful completion of these agreements and the cash flow from a single asset, the Orlando field.

In a brief update, the company, which is listed on the NASDAQ Copenhagen exchange, stated that while work on the debt solution agreements “has been progressing well,” it now expects to complete and sign the deals within the first three months of the new year. This represents the third shift in the timeline since a framework agreement was first announced in April 2025, highlighting the complex and challenging nature of the negotiations with its creditors.

A Timeline of Shifting Deadlines

The company's financial tightrope walk became public in early 2025. After warning on March 31 that it might be unable to continue operations, Atlantic Petroleum announced a significant breakthrough on April 4, 2025. It had reached a framework agreement with its main creditors designed to slash its total debt by more than DKK 90 million. A key part of that proposed deal involved London Oil and Gas (in administration) converting a portion of its debt into equity, which would give it a 17.7% stake in the Faroese firm.

This initial agreement provided a crucial lifeline, allowing the Board to declare its intention to continue operations and prepare its 2024 annual accounts on a going concern basis. However, the company cautioned at the time that the relief was “subject to final agreements to be finalized.”

That finalization has proven elusive. In its first-quarter report on May 30, 2025, the company stated it anticipated the deal would be finalized by the third quarter of 2025. When that deadline passed, an update on September 30 pushed the target to the end of the calendar year. Today’s announcement moves the goalposts once again, into early 2026.

Throughout each communication, the company has been forced to repeat the stark warning: its ability to continue as a going concern remains dependent on the successful completion of this very restructuring. Failure to secure the deal could trigger defaults and potentially force the company into insolvency.

The Orlando Field: A Single Lifeline

Compounding the risk from the protracted debt negotiations is Atlantic Petroleum's critical dependency on a single source of revenue: its 25% working interest in the Orlando oil field. Located in the UK North Sea, the subsea field is operated by EnQuest, which holds the remaining 75% interest. Production from Orlando, which began in 2019, is tied back to the Ninian Southern Platform.

In every update regarding its financial restructuring, Atlantic Petroleum has explicitly linked its survival not only to the debt deal but also to the “cash flows generated from its interest in the Orlando field.” This heavy reliance on a single, non-operated asset exposes the company to significant operational and market risks beyond its direct control. Any unforeseen production shutdowns, geological disappointments, or a sharp downturn in oil prices could severely impact the revenue stream that is propping up the company while it attempts to finalize its financial rescue.

This concentration of risk is a precarious position for any publicly traded entity. The company’s financial state was already fragile entering these negotiations. Its Q1 2025 report, the most recent detailed figures available, showed negative shareholder equity of DKK -115.1 million and bank debt of DKK 59.4 million, underscoring the urgent need for the debt reduction plan.

Small Players in a Challenging Sea

Atlantic Petroleum's struggle is emblematic of the immense pressures facing smaller, independent exploration and production (E&P) companies in mature basins like the North Sea. While oil majors can leverage vast portfolios and economies of scale to weather market volatility and high operating costs, independents operate on much thinner margins.

The North Sea is characterized by aging infrastructure and declining output from legacy fields, requiring significant capital investment to maintain production and develop smaller, marginal discoveries. For companies like Atlantic Petroleum, which lack the deep pockets of their larger competitors, accessing capital for such projects can be exceedingly difficult, particularly when already burdened with significant debt.

This environment often forces smaller players into a cycle of high-leverage financing and dependency on a handful of assets. They are more vulnerable to commodity price swings and the increasing regulatory and environmental costs associated with operating in the region. The industry has seen a trend of consolidation, where financially robust companies acquire smaller, struggling operators. For those unable to secure a deal or a buyer, the path to insolvency is a constant threat.

As 2025 comes to a close, the fate of Atlantic Petroleum remains unresolved. The company, its investors, and its creditors now look to the first quarter of 2026 as the make-or-break period. The successful signing of the long-awaited debt agreements, coupled with sustained performance from the Orlando field, is the only clear path forward for the Faroese oil firm to navigate out of its current financial distress.