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28 July 2016 Northcote Energy Limited (‘Northcote’ or ‘the Company’) Corporate Update Northcote Energy Limited is pleased to provide the following update regarding its ongoing development of the Shoats Creek Field in Beauregard Parish, Louisiana (‘Shoats Creek’). Shoats Creek Development Inc (‘SCDI’), the operator at Shoats Creek, has agreed a sales agreement to sell natural gas from Shoats Creek which should provide additional revenue from both existing and new wells drilled at Shoats Creek. HIGHLIGHTS: Delivery of an additional significant revenue stream in the near term via the sale of natural gas following execution of a sales contract with a subsidiary of Enerfin Resources Company Lutcher Moore #14 well (‘LM#14’) which produced 40 bopd and 2.5 mmcf of natural gas in testing will be the first to be tied in to the natural gas line; this is expected in September 2016 with first revenues in November 2016 LM#14 is expected to increase Northcote’s current net production at Shoats Creek by over 450% (Northcote has a 70% working interest and 52.8% net revenue interest in LM#14) Decision to test LM#14 was based on 2001 study which estimated LM#14 has unrecovered reserves of up to 120,000 gross barrels of oil and 750,000 gross Mcf of natural gas US$7.1 million gross undiscounted life of well revenue at current prices for LM#14 or US$3.8 million net to Northcote 52.8% NRI based on exploitation of up to six pay zones Northcote Chairman Ross Warner said, “We are pleased to secure a contract with Enerfin allowing us to sell natural gas from the Shoats Creek Field. As the LM #14 demonstrates, there are multiple existing well bores with tremendous potential for low cost near term revenue generation that could not be previously exploited without having the ability to monetise natural gas. With natural gas prices in the US having increased by over 30% during the last few months to $2.75 per thousand cubic feet, the revenue potential from natural gas is well worth exploiting in addition to oil.”
Excellent - LM14 was as I expected the underrated news "LM#14 is expected to increase Northcote’s current net production at Shoats Creek by over 450% "
"This represents gross undiscounted life of well revenue at current prices of US$7.1 million or, net to Northcote, US$3.8 million based on a 52.8% working interest." Not bad for a workover! And more gaseous zones identified..... Note also gas sales will be monthly : )
One workover well - worth $3.8M NET to NCT - what is our market cap........err £2.7M.... re-rate about to start; excellent news......it was all in the original LM14 RNS update but not spelt out the way RC would have.....