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Northcote Energy Ltd / Index: AIM / Epic: NCT / ISIN: VGG6622A1057 / Sector: Oil & Gas

14 October 2013

Northcote Energy Ltd ('Northcote' or 'the Company')

Acquisition of 78% WI in 1,520 net mineral acres in Osage County

Northcote (AIM: NCT), an onshore US oil and gas exploration and production company, is pleased to announce that it has acquired, for a cash consideration of US$1 million (£625,000), an average 78% working interest ('WI') and 54% net revenue interest ('NRI') in 1,520 mineral acres ('North Cleveland'), held by production, in Osage County from Northam Oil Company ('Northam Oil') in line with its strategy to rapidly increase its production and reserves in Oklahoma.

Highlights

· Producing asset with significant drilling inventory acquired, with immediate potential to increase production through:

o Workover programme at the existing producing wells

o Targeting 18 proven behind pipe objectives, either through workover or re-entry, to be perforated and fracked

o 10 additional drilling locations, which if successful could lead to 10 more offset wells

· Production through 15 producing wells with average gross daily production of circa 20 barrels of oil per day ('BOPD') and 60MCF gas per day from the Skinner Formation generating net revenues to our interest of over US$30,000 per month

· Structurally high field which has not experienced over-production - majority of the wells are producing from one zone and only a few of them have ever been fracked

· Company's total land position in Osage now 4,080 net acres increased from 462 acres at IPO, representing significant progress towards Northcote's target of 5,000 acres by the end of 2013

· Potential of North Cleveland property highlighted by activity in neighbouring properties

o Five new locations staked in neighbouring properties after well perforated a Bartlesville zone yielded 6,000 BO in the first 90 days of production and now maintains 28 BOPD average

Northcote's Chief Executive Officer Randy Connally said, "This acquisition, facilitated by our recent £1.75 million fundraising, fits perfectly with our strategy of acquiring productive acreage with extensive low cost/high impact development opportunities. The North Cleveland properties significantly elevate and consolidate our regional position, being located close to our OKE properties. They also have strong pay-back credentials based on existing production alone. We are very confident that we can substantially improve on this in the near term, as there are numerous opportunities to rapidly maximise our revenues through workovers, new wells and hydraulic fracture stimulation campaigns.

"Importantly, in line with our model to target de-risked properties with significant growth potential, the quality of this acreage is underpinned by the drilling inventory that we have acquired and we are keen to commence our development programme at North Cleveland as soon as possible.

"This will be conducted alongside the drilling of a new well at our recently acquired Mathis property, our on-going fully funded, four well 2013 frack programme at Horizon, as well as continuing workovers at OKE. With this in mind we are ideally placed to hit our target of 250 BOEPD by the end of 31 July 2013 and at the same time build on our proven reserves, which currently stand at 2.49 million BOE."

North Cleveland Property

The Company has acquired, for a cash consideration of US$1million (£625,000), an interest in a producing asset with significant drilling inventory. The North Cleveland asset is 9 ½ quarter sections totalling 1,520 gross acres in Osage County, Oklahoma, which is intended to be operated by Glenn Supply Limited. Northcote's interest in the field is approximately 78% WI and 54% NRI across 15 producing wells and 1 permitted disposal well. The acquisition has been completed.

The development potential of the property and the drilling inventory acquired provides Northcote with the ability to significantly increase production through a number of well defined workover and drilling opportunities. The asset complements the Company's strategy of being cash flow generative and held by production, but through a progressive work programme this asset has the potential to add to Northcote's already growing production.

The acquired leases have not been over produced. Most of the wells are producing from one zone and only a few have been fracked.

As part of its due diligence on the property, the Company has identified at least 18 proven behind pipe work overs to perforate and frack and a further 10 drilling locations, which could lead to 10 more with off setting wells.

Initially, Northcote expects to undertake a workover programme to boost production and cash generation. The Company will provide further information on the commencement of this programme in due course.

The Company is further encouraged by initiatives from the neighbouring operators and it looks forward to clarifying the potential of the acquired acreage for similar programmes. A well in the neighbouring acreage was perforated in the Bartlesville zone and yielded 6,000 barrels of oil in the first 90 days of production and maintains 28 BOPD average now. The neighbouring operator has since staked five new locations, which directly offset the acquired acreage.

**ENDS**

For further information and the full Admission document visit www.northcoteenergy.com, see below or contact the following:

Notes:

Northcote Energy Ltd is a revenue generative US onshore oil and gas production company focussed on the rapidly emerging Mississippi Lime formation in Oklahoma. The Company participates with leading operators, including Midstates Petroleum and Chesapeake Energy, in low risk development plays where advanced techniques, such as horizontal drilling and fracing, are used to unlock known oil accumulations and dramatically improve recovery rates. Management is focused on increasing production through a multi-well drilling and fracking campaign in 2013.