NCT.L Share News (NCT)

Recently floated US onshore oil and gas exploration outfit Northcote has today announced the creation of a development partnership - Northcote Drilling Partners LP - which will allow it to pursue its ambitious drilling programme and leverage its 'know-how' in the sector and in that region. Critically, as managing general partner in the new partnership Northcote will be able to bring investors on board to participate in the development of oil and gas assets located onshore US, initially in Oklahoma, in a non-dilutive manner for the firm. Almost as important as well, and as the company has pointed out to Sharecast on previous occasions, the above is possible thanks to the scalability of its model, as analysing and managing a larger number of properties is perfectly feasible despite the relatively small size of its management team, given their high degree of specialisation. In turn, the Partnership will benefit from the accumulated knowledge in sourcing, evaluating, acquiring and developing oil and gas properties held by the Northcote platform. Of note in this regard, perhaps, is the company's good track record to date in beating or exceeding its own targets. Northcote currently has in excess of 2,800 net acres of oil and gas leases in northern Oklahoma, primarily Osage County, Oklahoma, where it is developing multiple objectives including the Bartlesville, Layton and Mississippian formations. The firm will receive 20% of the cash distributions generated by the Partnership after 'capital pay-out (once tax benefits are taken into account).'Commenting on the announcement House analyst Craig Howie, from Shore Capital, highlights the strategic importance of this development, adding that "the company has made excellent progress since listing on AIM, in our opinion, and we expect to see further growth in both production and reserves."Shares of Northcote were rising by 1.64% to 1.55p as of 11:54. AB