LONDON (Alliance News) - Northern Petroleum PLC shares rose strongly early Thursday after it said it has sold an 80% stake in the company's Cascina Alberto permit in Italy to a subsidiary of Royal Dutch Shell PLC.
Northern Petroleum shares were up 17.4% to 6.34 pence per share on Thursday morning.
Under the terms of the deal, Shell will become the operator of the permit and pay Northern Petroleum a total of USD850,000 for the 80% stake. Northern Petroleum will retain the remaining 20% stake in the permit.
In addition, Shell will carry Northern Petroleum for the costs of exploration on the permit, consisting up to USD4 million on acquiring new seismic data and a carry on any exploration wells until costs reach USD50 million, it said.
Northern Petroleum also said that Shell has a "pre-emptive right over the company's remaining interest in the Cascina Alberto permit in the event of any change in control of the asset or corporate level".
"This farm in demonstrates the value inherent in Northern's Italian asset portfolio. Northern will continue to progress its permits and applications with the Italian authorities and partner with companies with larger resources, where appropriate, to maximise their value," said Chief Executive Keith Bush.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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