AOGL.L Regulatory News (AOGL)

NORTHCOTE ENERGY LIMITED - Final Results

PR Newswire

London, March 27

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

28 March 2013

Northcote (AIM: NCT), an onshore US oil and gas exploration and productioncompany, is pleased to announce its audited final results for the period ended31 December 2012 (`the Accounts'). The Accounts are for the period ended 31December 2012 and therefore have been compiled to a date before the Companycompleted its acquisition of Northcote Energy Limited (`the Acquisition'). TheAccounts containing an unqualified audit opinion are available on the Company'swebsite, www.northcoteenergy.com.

The Company, prior to the Acquisition, was an investing company and thereforethe Company also provides the following update on milestones achieved since theacquisition of Northcote Energy Limited and AIM Admission in January 2013.

Highlights since Admission

Northcote's Chief Executive Officer Randy Connally said, "Having establishedNorthcote as a highly active, low risk, asset backed oil producer in OklahomaUSA, over the coming months we plan to leverage our already bolstered positionin the Mississippi Lime formation to significantly build our production andreserve profile further. We now have interests in four projects in Oklahoma andour P1 PV10*, stands at US$61.94 million, based on the post completion WI of50.15% in the Horizon Project, which represents a very significant increasesince listing and highlights, in the Board's opinion, the undervalued nature ofthe Company. Our ambitions do not stop here and it is our intention to buildduring the course of the year and beyond through our extensive developmentprogrammes as well as through further regional consolidation. Our listing onAIM in January 2013 was pivotal for the Company and I look forward to providingregular updates to shareholders as we achieve our near term objectives during2013."

* Does not include the impact of the OKE acquisition which will be reported indue course

Everest Energy Limited was listed on PLUS markets (now ISDX) with the soleintention of securing an acquisition that had the potential to generateconsiderable value for shareholders and we are pleased to report that theperiod under review culminated in the Directors completing the reverseacquisition of Northcote Energy Limited and AIM listing on 14 January 2013. Wetake this opportunity to thank the outgoing Directors of Everest Energy Limitedfor their efforts in securing this transformational acquisition and welcome tothe board the Directors of Northcote.

Northcote is now an asset-backed, revenue-generating oil and gas producerfocussed on low risk development plays in the proven US onshore formations ofOklahoma including the Mississippi Lime. Much has been achieved in the shortspace of time since listing, we have achieved operator status in Osage Countyand by executing a number of corporate acquisitions we will be the majorityworking interest party in two Osage County projects substantially increasingour net production, reserves and ultimately cash flow ahead of time. We arefocussed on increasing production to at least 100boepd by the end of the yearand with a range of operational initiatives already underway and fully funded,including the drilling and completion of three new wells and the commencementof our first frack, I look forward to updating shareholders over the comingmonths regarding our progress towards this target.

Our portfolio consists of a balanced mix of producing assets and drillingleases (subject to the completion of transactions announced 25 March 2013)related to four projects in Osage and Woods Counties in Oklahoma: the HorizonProject, Osage County (50.15% WI and 39.8% NRI) which has on-going workover andhydraulic fracture stimulation programmes on its 10 producing wells to liftproduction; the recently acquired OKE Project, Osage County (100% WI) whichconfers operatorship status for Northcote, spans 1,040 acres and is held byproduction with potential to significantly increase existing shallow oilproduction complemented by plans to target the Mississippi Lime; the Bird CreekProject Osage County (3.125% WI) where the Company is participating in thedrilling of two new wells; and the DeAgua Project Woods County (average 0.348%WI) which provides exposure to 22 well locations and a 12 well drillingprogramme planned for 2013.

As evidenced by our recent acquisition of the OKE Project, we are alsocommitted to increasing our exposure to the Mississippi Lime and consolidatingour position in Osage County. We believe that we have a competitive advantagein terms of contacts and knowledge in this region and we continue to evaluatefurther potentially value accretive opportunities.

The Group's Horizon Project and Woods County Projects alone provide the Companywith a P1 PV10 of US$61.94 million (at average 50.15% WI) based on net oil andcondensate reserves of 1,181 Mbbl and net natural gas reserves of 3,107 MMcf,demonstrating the level of asset backing behind our market valuation. We alsohold interests in two further projects which are not included in this reservevaluation, and with our market cap (pre-issue of the placing and considerationshares in April 2013) currently standing at £13.44 million, the additionalupside potential available from our portfolio is clear.

Horizon Project, Osage County (expected 50.15% average working interest)

The Horizon Project, in which we expect to assume a controlling 50.15% averageworking interest, is our flagship project and we currently produce from 10wells with one further well pending completion. Of these, nine are unfrackedhorizontal wells which produce from the Mississippian formation and one is avertical well producing from the shallower Layton formation (Burkhart #3).

For a relatively low cost, hydraulic fracturing techniques can lift productionby between 2 and 30 times and therefore our nine unfracked wells represent alow cost high impact development opportunity. Starting with the Big Hill #1well, we have initiated the first of our 2013 frack programme and once completewe plan to move straight on to Big Hill #2. With between 4 and 6 frack'splanned for this year, this is an exciting time for the Company and we lookforward to announcing the results on the first 30 day average production rateafter injected water volumes have been recovered in due course. This typicallytakes around 35 to 45 days after stimulation.

Upon listing, we immediately commenced a workover programme focussed on fourwells not scheduled for fracture stimulation in the near term. This decisionwas based on the evaluation of wells and bottomhole pressure tests run inDecember 2012 in preparation for the fracture stimulation programme. Dependingon the well, workover programmes consist of increasing water disposal capacity,re-acidizing, pumping down fluid levels and in some cases installing largersubmersible pumps.

We also elected to participate in the deepening of the Burkhart#1 well andrecently announced that this has successfully reached its target depth of 4,226feet. Originally drilled to and produced from the Mississippi Chat formation,the decision was made to deepen it to evaluate further formations. The wellintercepted oil shows in multiple objectives and the Company is now evaluatingcompletion options in the Viola and Mississippi Lime formations. We are pleasedthat the Burkhart #1 well highlighted the multiple pay zones that can betargeted for production on our leases and that it illustrates that all oilbearing zones with a strong investment case will be considered for development.

OKE Project, Osage County: (100% working interest)

We recently announced the acquisition of 100 per cent. of the outstandingmembership interests of Oklahoma Energy LLC (`OKE') which is the operator andholder of 100% WI in the OKE Project. This is comprised of 1,040 acres inOklahoma that are currently held by production and, in the Board's view, havesignificant potential to produce from the proven Mississippi Lime formation.Once completed this represents a milestone transaction for the Companyresulting in it achieving operator status in a very short space of time sincelisting.

The OKE Project currently has an average gross current production rate of 12bopd from the shallow Bartlesville formation, which generates average grossrevenue of over US$30,000 per month and of this, we are currently entitled to a41.5% net revenue interest in production. Prior to Northcote agreeing topurchase OKE, BlueRock Capital LLC (`BlueRock') acquired a 41.5% termoverriding royalty interest in the OKE Project. BlueRock's royalty will expirewhen it has received $1.23 million and an internal rate of return on thatamount of 15% from its share of the Project revenues. On expiry of BlueRock'sroyalty our net revenue interest will increase to 80% and leave us wellpositioned to develop all zones within our tenure.

Naturally we are dedicated to increasing production from the OKE Projectsignificantly, particularly as this will enable the Company to accelerate theBlueRock payout. Accordingly, our first step will be the commencement ofworkover programmes at the existing wells which will be low cost at aroundUS$150,000.

The project also benefits from having infrastructure in place to supportexisting and increased production from the Bartlesville and other formationsincluding the Mississippi Lime and Cleveland Sands. With this in mind, we areplanning a 3D seismic programme for the project which will assess targets inthe highly prospective Mississippi Lime which will provide us with a solidbasis for drilling going forward.

Bird Creek Prospect, Osage County: (average 3.125% working interest)

We acquired a 3.125% working interest in the Bird Creek Prospect shortly afterlisting in line with our stated strategy to increase our acreage in OsageCounty. We have already elected to participate in the drilling of two wells,one of which, the Bray #1, has been drilled to target depth of 1,820 feetresulting in good oil shows being encountered across 10 feet of pay from 1,704to 1,714 feet. We now plan to drill the Keese #1 well which is currently beingpermitted, following which we can commence drilling later in March/ April 2013.Once the Keese #1 is drilled to target depth, the better of the two wells willbe completed as a producer and the other well will be completed as a salt waterdisposal well to support future production.

DeAgua Project, Woods County: (average 0.348 % working interest)

While we currently have only a small working interest in the DeAgua Project, itnevertheless allows us to participate in wells alongside Chesapeake andMidstates, two of the leading operators in the Mississippi Lime. As payingparticipants in the 12 well drilling programme planned for 2013, NorthcoteEnergy will have access to key well data and information that will deepen ouralready extensive knowledge of the play. If the opportunity arises, we willlook to increase our interest in the Project. In preparation for the drillingcampaign, the salt water disposal well that will service the Woods Countywells, the Busse #1H and the Bouziden #1H-17, is complete. These first twowells will be added to production starting in April 2013 with initialproduction rates to be announced in due course.

Financial Review

As at 31 December 2012, the Group had cash of £356,000, since the year end thishas since been supplemented by the completion of a fundraising totalling £1,000,000 for the issue of 100,000,000 at 1 pence per share.

Furthermore on 25 March 2013 the Company announced that it has raised £1.5million (before expenses) by way of a placing 100,000,000 new Ordinary Shares(`Placing Shares') at a price of 1.5 pence per share. The Placing isconditional, inter alia, on admission of the Placing Shares to trading on AIMand it is expected that trading in the Placing Shares will begin, at 8.00 a.m.on Wednesday 3 April 2013. The Placing Shares will rank pari passu in allrespects with the Company's existing Ordinary Shares.

The Company made a pre-tax loss of £212,314 for the period (30 April 2012: £108,939), which was principally related to expenses incurred in connection withthe AIM IPO that was completed post year end on 14 January 2013.

Conclusion

This has been a successful period for the Company during which we havedelivered value through our projects targeting the Mississippi Lime formation.In order to maintain this momentum and build Northcote into a substantial oilcompany, we continue to implement our strategy focussed on rapidly growing ouracreage, well participation and interests, particularly in Osage County wherewe have a strong understanding of the industry and geology.

Major milestones for the Company over the coming weeks include the results fromour first frack at Big Hill #1 closely followed by the commencement of oursecond frack, and the continuing development activity at our other projects aswell as evaluating the acquisition of further working interests and assets toexpand our acreage and status in this proven region.

I look forward to providing regular updates regarding these initiatives and Iwould like to thank our shareholders and dedicated team for their support andhard work over the period.

STATEMENT OF COMPREHENSIVE INCOME

STATEMENT OF FINANCIAL POSITION

STATEMENT OF CHANGES IN EQUITY

PERIOD ENDED 31 DECEMBER 2012

PERIOD ENDED 31 DECEMBER 2012

Major Non Cash Transactions

During the prior period shares were issued in exchange for services provided,with a fair value £10,000.

NOTES TO FINANCIAL STATEMENTS

PERIOD ENDED 31 DECEMBER 2012

1. General Information

The principal activity of Northcote Energy Limited (`the Company') for theperiod under review was that of an investment company. Since the period end theCompany and its subsidiaries (together "the Group") have as their principalactivity the exploration and extraction of Oil & Gas in the United States. TheCompany's shares were listed on the Alternative Investment Market ("AIM") ofthe London Stock Exchange on 14 January 2013.

The Company was incorporated in the British Virgin Islands on 13 May 2010 as aprivate limited company with the name Everest Energy Limited. The Companychanged its name from Everest Energy Limited to Northcote Energy Limited on 29November 2012 and as at the period end was domiciled in the British VirginIslands.

2 Summary of significant accounting policies

2.1. Basis of Preparation

The financial information is presented in UK Pounds Sterling (£'000).

The financial information has been prepared in accordance with InternationalFinancial Reporting Standards (IFRSs) and International Financial ReportingInterpretations Committee (IFRIC) interpretations, as adopted by the EU.

The financial information has also been prepared under the historical costconvention. A summary of the significant accounting policies, which have beenapplied consistently, are set out below.

The preparation of the financial information in conformity with IFRSs requiresthe use of certain critical accounting estimates. It also requires managementto exercise its judgement in the process of applying the Company's accountingpolicies. The areas involving judgements or where estimates and assumptions aresignificant are disclosed in Note 2.9.

b) Standards, amendments and interpretations that are not yet effective andhave not been early adopted:

IAS 28 (Amendment Investments in associates and joint 1 January 2013*12011)

IFRS 7 (Amendment Disclosures - offsetting financial assets 1 January 20132011)

IAS 32 (Amendment Offsetting financial assets and financial 1 January 20142011)

*1 Effective date 1 January 2014 for the EU. *2 Not yet endorsed by the EU

The Group is evaluating the impact of the above pronouncements and willconsider the potential impact of IFRS 11. No other pronouncement is expected tohave a material impact on the Group's earnings or shareholders' funds.

2.2. Going Concern

In forming its opinion as to going concern, the Board prepared a workingcapital forecast based upon its assumptions as to trading and current availablecash resources.

The Board also prepares a number of alternative scenarios modelling thebusiness variables and key risks and uncertainties. Based upon these, the Boardremains confident that the Company's current cash on hand, current productionand future anticipated revenues from the wells to be drilled, fracked or workedover under the Company's development programme will enable the Company to fullyfinance its future working capital discretionary expenditures beyond the periodof 12 months of the date of this report.

However whilst the Board take the necessary steps to reduce the key risksassociated with oil development activity, there can be no guarantee of thesuccess of future wells, consequently further capital may be required in theevent that the Company's expectations are not achieved. The Board believesthat, despite this lack of guarantees, the Company will continue in theforeseeable future and therefore continues to adopt the going concern basis forpreparing the Financial Statements.

2.3. Segmental Reporting

Due to the current nature of the Company's operations, all costs are incurredwithin one segment. As a result, the format of the financial statements showingthe Company's operations complies with the requirements of IFRS 8.

2.4. Financial instruments

Financial assets

The Company classifies its financial assets into trade and other receivablesand cash and cash equivalents, which comprise the categories discussed below,depending on the purpose for which the asset was required. The Company has notclassified any of its financial assets as held to maturity or available forsale. The Company has not classified any of its assets at fair value throughprofit and loss.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, deposits with a maturity ofthree months or less and other short-term highly liquid investments that arereadily convertible into known amounts of cash and overdrafts repayable ondemand. Bank overdrafts, if appropriate, are shown within borrowings in currentliabilities on the statement of financial position.

Financial liabilities

The Company classifies its financial liabilities into categories depending onthe purpose for which the liability was acquired. The Company has notclassified any of its liabilities at fair value through profit and loss.

The Company's accounting policy for each category is as follows:

Held at amortised cost

Trade payables and other short and long-term monetary liabilities are initiallyrecognised at fair value and subsequently carried at amortised cost using theeffective interest method.

Borrowing Costs

Interest on borrowings is capitalised where the related proceeds are clearlyallocated to the development of a qualifying asset. Capitalisation of interestis suspended once the qualifying asset is bought into production.

2.5. Equity

Equity comprises the following:

2.6. Related Parties

Parties are considered to be related to the Company if the Company has theability, directly or indirectly, to control the party or exercise significantinfluence over the party in making financial and operating decisions, or viceversa, or where the Company and the party are subject to common control orcommon significant influence. Related parties may be individuals (being membersof key management personnel, significant shareholders and/or their close familymembers) or other entities and include entities which are under significantinfluence of related parties of the Company where those parties areindividuals, and post-employment benefit plans which are for the benefit ofemployees of the Company or of any entity that is a related party of theCompany.

2.7. Foreign Currency Translation

* Functional and presentational currency

Items included in the financial information are measured using the currency ofthe primary economic environment in which the entity operates ("the functionalcurrency"). The Financial Statements are presented in Sterling (£), which isthe Company's functional and presentational currency.

* Transactions and balances

Foreign currency transactions are translated into the functional currency usingthe exchange rates prevailing at the dates of the transactions. Foreignexchange gains and losses resulting from the settlement of such transactions,and from the translation at period-end exchange rates of monetary assets andliabilities denominated in foreign currencies, are recognised in the Statementof Comprehensive Income.

2.8. Share Based Payments

The Company issues equity-settled share-based payments to certain employees.Equity-settled share-based payments are measured at fair value at the date ofgrant. The equity-settled share-based payments are expensed to the consolidatedstatement of comprehensive income or capitalised to investments or intangiblesin the statement of financial position over a straight line basis over thevesting period based on the Company's estimate of shares that will eventuallyvest.

Where equity instruments are granted to persons other than employees, theconsolidated statement of comprehensive income is charged with the fair valueof goods and services received over a straight line basis over the vestingperiod based on the Company's estimate of shares that will eventually vest,except where it is in respect to costs associated with the issue of securities,in which case it is charged to the share premium account.

2.9. Critical Accounting Estimates and Judgements

Use of Estimates and Judgements

The preparation of the Financial Statements in conformity with IFRS requiresmanagement to make judgements, estimates and assumptions that affect theapplication of policies and reported amounts of assets and liabilities, incomeand expenses. The estimates and associated assumptions are based on historicalexperience and various other factors that are believed to be reasonable underthe circumstances, the results of which form the basis of making the judgementsabout carrying values of assets and liabilities that are not readily apparentfrom other sources. Actual results may differ from these estimates.

As at 31 December 2012 there were no critical accounting estimates andjudgements to disclose. In light of the acquisition completed on 14 January2013 the 2013 Financial Statements will include further disclosure asappropriate for the acquired business.

3. Loss per Share

Basic loss per Share is calculated by dividing the loss attributable toordinary shareholders by the weighted average number of ordinary sharesoutstanding during the period.

In accordance with international accounting standard 33 `Earnings per share',no diluted earnings per share is presented for the effect of allotting Sharesto Be Issued as the effect would be to decrease the loss per share. Details ofshares to be issued that could potentially dilute earnings per share in futureyears are set out in Note 5.

Options outstanding at 31 December 2012 and 30 April 2012:

On 6 June 2011 the Company granted 1,000,000 warrants to Beaumont CornishLimited. The warrants have an exercise period of two years from the date thatthe Company listed on PLUS, 8 June 2011, and exercise price of 1 pence. None ofthe warrants had been exercised at the period end. The Directors have valuedthe warrants using the Black Scholes method and the resulting fair value isimmaterial. In addition see note 15 for further details on share capital andwarrant issues since the period end.

7. Staff costs (including Directors)

There were a total of 4 (2012: 4) directors during the period. Note that one ofthe Directors, Ross Warner, waived their accrued salary totalling £6,000. Theremaining amounts of £30,000 remained outstanding as at 31 December 2012. Seenote 15 for details of post period end settlement of these fees.

Key management of the Company are considered to be the Directors of the Companyand their remuneration of those in office during the period was as follows:

1 resigned as a director on 14 January 2013

8. Financial Risk Management

The Company's activities expose it to a variety of financial risks: market risk(including currency risk, fair value interest rate risk, cash flow interestrate risk and price risk), credit risk and liquidity risk. The Company'soverall risk management programme seeks to minimise potential adverse effectson the Company's financial performance.

Risk management is carried out by the Board.

(a) Market Risk

Foreign exchange risk

The Company operates internationally, and is exposed to foreign exchange riskarising from various currency exposures, primarily with respect to the USDollar. Foreign exchange risk arises from future commercial transactions andrecognised assets and liabilities.

As at 31 December 2012 the exposure to this risk is not considered material tothe Company's operations and thus the Directors consider that, for the timebeing, no hedging or other arrangements are necessary to mitigate this risk.The Company has become more exposed to foreign exchange risk as a result of thereverse acquisition completed since the period end and further details will bedisclosed in the annual report of the Group.

(b) Credit Risk

Credit risk arises from cash and cash equivalents.

The Company considers the credit ratings of banks in which it holds funds inorder to reduce exposure to credit risk. The Company will only keep itsholdings of cash and cash equivalents with institutions which have a minimumcredit rating of `A'.

(c) Liquidity Risk

Management of liquidity risk is achieved by monitoring budgets and forecastsagainst actual cash flows.

Capital Risk Management

The Company's objectives when managing capital are to safeguard the Company'sability to continue as a going concern, in order to provide returns forshareholders and benefits for other stakeholders, and to maintain an optimalcapital structure.

In order to maintain or adjust the capital structure, the Company may adjustthe amount of dividends paid to shareholders, return capital to shareholders orissue new shares.

The Company monitors capital on the basis of the equity held by the Company,which at 31 December 2012 was £356,382 (30 April 2012: £442,697).

9. Taxation

As the Company is BVI incorporated, no tax is payable on profits. As such, notax losses have arisen in the period.

10. Trade and Other Receivables

Receivables are all due within one year and relate entirely to prepaid IPOcosts which will be capitalised against share premium when the shares areissued. The fair value of all receivables is the same as their carrying valuestated above.

There were no capital commitments authorised by the Directors or contracted forat 31 December 2012 (30 April 2012: None).

13. Related party transactions

During the period the Company was charged rent of £Nil (30 April 2012: £6,306)by Ortac Resources Limited, a Company of which Charles Wood is also a Director.At the period end £nil was due and outstanding.

The Directors charged fees of £Nil (30 April 2012: £36,000) of which £30,000(30 April 2012: £36,000) is outstanding at the period end. In addition,Directors were reimbursed for expenses incurred during the course of business.See note 15 for details of post period end settlement of these fees.

14. Ultimate controlling party

The directors believe there to be no ultimate controlling party.

15. Events after the reporting date

On 14 January 2013 the Company acquired 100% of the issued share capital ofNorthcote Energy Limited, Cayman Islands ("Northcote CI"), a US focussedon-shore oil and gas company, for a consideration of US$10 million to besatisfied by the issue of 645,084,519 new Shares to the Sellers. The Companywas incorporated as an investment vehicle focussed on the completion of anatural resources acquisition. The Directors identified and completed theacquisition of Northcote CI in line with this strategy and to further thebusiness interests of the Company.

In accordance with IFRS 3 (Revised) the acquisition represents a reverseacquisition and the details of the reverse acquisition are below:

Equity instruments in issue (5,995,841 ordinary shares at 17.012p 1,020each)

In a reverse acquisition the acquisition date fair value of the considerationtransferred by Northcote Energy Limited is based on the number of equityinstruments that Northcote CI would have had to issue to the owners ofNorthcote Energy Limited to give the owners of Northcote Energy Limited thesame percentage of equity interests that results from the reverse acquisition.The cost of the combination was calculated using the fair value of all thepre-acquisition issued equity instruments of Northcote Energy Limited at thedate of acquisition. The fair value of the share consideration was based on thelatest share transaction of Northcote Energy CI from October 2012 of £0.17immediately prior to the acquisition.

The costs of the reverse acquisition of Northcote CI totalled £430,000; of thisamount £190,000 was recorded in the period under review of which £165,000 wasexpensed and £25,000 was prepaid to be carried forward against the completionof the acquisition in 2013.

Goodwill of £789,000 will be expensed immediately on acquisition and all theacquisition related costs will also be expensed in accordance with IFRS 3(Revised).

About Northcote CI

Northcote CI was established in 2009. It acquired an interest in Oil & Gasproducing assets at various stages during the year ended 31 December 2012. Inaccordance with IFRS, as agreed with AIM at the time of the Company's admissionto AIM in January 2013, the Company sets out below the primary FinancialStatements of Northcote CI for the year ended 31 December 2012 (with 2011comparatives):

The Statement of Comprehensive Income' of Northcote CI for the period ended 31December 2012 is presented below:

The major non-cash transactions in the period related to £294,000 of promissorynotes and £558,000 of shares granted in respect of the acquisition of Oil & Gasassets.

Other share, options and warrant issues

On 14 January 2013 certain investors were allotted and issued 100,000,000Shares pursuant to the Placing at a price of 1 pence per share to raise grossproceeds of £1million.

Furthermore on this date the Company issued 3,025,612 Shares in satisfaction ofthe aggregate accrued but outstanding fees of £30,000 due to former Directors,Ross Marsh and Lincoln Moore and to current Director Charlie Wood.

Also on 14 January 2013 the Company discharged the $250,000 debt to RandallConnally with the issue of 15,923,567 shares. Between 10 October and 11December 2012, Mr Randall Connally loaned the sum of US$250,000 to Northcote CIto fund immediate working capital requirements for its group on an interestfree basis and repayable on demand.

In addition on 14 January 2012, the Company granted a warrant to Shore Capitalto subscribe for 14,669,046 at a price of 1 pence per warrant. Furthermore onthe same date the Company agreed to vary the terms of the existing 1,000,000 1pence warrants with Beaumont Cornish dated 6 June 2011 such that the warrantcould be exercised up to 14 January 2016.

Furthermore on 25 March 2013 the Company announced that it has raised £1.5million (before expenses) by way of a placing 100,000,000 new Ordinary Shares(`Placing Shares') at a price of 1.5 pence per share. The Placing isconditional, inter alia, on admission of the Placing Shares to trading on AIMand it is expected that trading in the Placing Shares will begin, at 8.00 a.m.on Wednesday 3 April 2013. The Placing Shares will rank pari passu in allrespects with the Company's existing Ordinary Shares.

Other events

Horizon Project additions

On 13 February 2013 Northcote CI's wholly owned subsidiary, Northcote USA Inc,exercised an option to acquire an additional 10% working interest in the nineunfracked horizontal wells and surface infrastructure in Osage County fromHorizon Drilling Partners, LP (`Horizon') for US$800,000. The outstandingconsideration (after cash pre-payments of US$107,500) was agreed to besatisfied as follows:

1. US$500,000 by the issue of 18,083,183 fully paid Shares in Northcote at aprice of 1.75p per Share to rank pari passu with existing Shares in issue; and

2. US$192,500 by the issue of a promissory note on the terms set out below.

WCR Royalty Option

On 13 February 2013 Northcote CI's wholly owned subsidiary, Northcote USA Inc,exercised an option to acquire a 2.2% royalty interest in the nine unfrackedhorizontal wells in Osage County from WCR Royalties LLC (`WCR') for US$300,000.The outstanding consideration (after cash pre-payments of US$51,000) was agreedto be satisfied as follows:

1. a cash payment of US$50,000;

2. US$150,000 by the issue of 5,424,955 fully paid Shares in Northcote at aprice of 1.75p per Share to rank pari passu with existing Shares in issue; and

3. US$49,000 by the issue of a promissory note on the terms set out below.

Promissory Notes terms

The promissory notes are unsecured and shall mature five years from the date ofdelivery of the assignment of the relevant interest. Interest shall accrue at4.5 per cent per annum and is payable monthly. After three years, monthlypayments of 2 per cent of the original principal shall be payable. Theoutstanding principal and interest is payable at maturity.

Eagle Option

As more fully described in paragraph 13.2(g) of Part V of the Company's AIMadmission document, Eagle Production & Development LP (`Eagle') grantedNorthcote's wholly owned subsidiary, Northcote Oklahoma, LLC, an option (the`Eagle Option'), since admission Eagle has assigned the interests to OsageEnergy Holdings, LLC.

On 22 March 2013, Northcote Oklahoma LLC has exercised this option and expectsto enter into a sale and purchase agreement with Osage Energy Holdings, LLC toacquire an average 7.25% working interest in 10 wells at the Company's HorizonProject for consideration of US$600,000 to be satisfied by the issue of22,857,143 new Ordinary Shares at a price of 1.75 pence per new share. The saleand purchase will be entered into shortly.

Horizon Acquisition

Additionally on 22 March 2013 the Company entered into an agreement withHorizon to acquire a further 6 per cent. Working interest in the HorizonProject for US$480,000 payable in cash. The acquisition is contingent upon thetransfer of the working interest to the Company and the settlement of theconsideration, which is expected to complete during the course of April 2013.

Acquisition of Oklahoma Energy ("OKE")

On 22 March 2013 the Company entered into the OKE acquisition agreement toacquire from Mr. Vince Coble ("Seller") 100 per cent. of the outstandingmembership interests of OKE. Oklahoma Energy is the operator and holder of a100% working interest in 1,040 acres in Oklahoma that are currently held byproduction and, in the Board's view, have significant potential to produce fromthe proven Mississippi Lime formation. The consideration for the acquisition isas follows:

1. US$50,000 in cash (`OKE Cash Consideration');

2. US$250,000 to be settled by the issue of 9,523,809 new Ordinary Shares at1.75 pence per new Ordinary Share (`OKE Consideration Shares'); and

3. up to a maximum payment of US$200,000 in cash payable at the rate of US$10per boed produced up until 4 March 2020.

The OKE Acquisition will complete on payment of the OKE Cash Considerationwhich is expected to occur prior to 3 April 2013. Under the OKE Agreement, theOKE Consideration Shares must to be issued to the Seller within 120 days fromcompletion of the OKE Acquisition.