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Northcote Energy Ltd / Index: AIM / Epic: NCT / ISIN: VGG6622A1057 / Sector:Oil & Gas 1 July 2013 Northcote Energy Ltd (`Northcote' or `the Company') Operations Update - Oklahoma Energy Northcote (AIM: NCT), an onshore US oil and gas exploration and productioncompany, is pleased to announce a positive update on its operations at thenewly acquired 1,040 acre Oklahoma Energy project (`OKE' or `the Project'), inwhich Northcote is the operator with a 100% working interest. Key Highlights * First stage of workover programme completed increasing gross production by 150% to 37 bopd from 12 bopd at acquisition. * Second stage of workover programme underway targeting increase in gross production at OKE to 50 bopd by year end to accelerate the pay-out of the BlueRock royalty arrangement * First oil sales from OKE post acquisition were made in May * Evaluation of high impact Mississippian opportunities to significantly enhance production and reserves with at least one well scheduled to be drilled as part of our 2014 programme. * Area prospectivity highlighted by successes of Encana Corporation and Chaparral Energy in developing Mississippian * Previously published P1 PV10 of US$61.94 million does not include the OKE Project - Northcote focusing on enhancing P1 PV10 through increased production and reserves at OKE and across portfolio Northcote's Chief Executive Officer Randy Connally said, "The increasedproduction at OKE following electrification of the lease is highly positive andfollows swiftly on the back of the exciting initial results from our firstfrack at the majority owned Horizon Project. We are now moving to re-enter andworkover other existing well bores and we expect these initiatives to increasethe gross OKE production from the shallower Bartlesville formation from thecurrent 37 barrels to 50 barrels of oil per day gross by year end, which willhelp accelerate the payout of the BlueRock production royalty. Assumingachievement of our target of 50 gross barrels a day by year end, we expect toretire the BlueRock facility before year end 2015 at which point, the NRI toNorthcote will increase from 41.5% to 80%. Of course, this timetable would besignificantly accelerated by the drilling of new wells. "Importantly, both Encana Corporation and Chaparral Energy have experiencedrecent success through Mississippian development to the north and south of theOKE project. This, along with the positive results from our continuedevaluation of a range of Mississippi Lime targets in the project area, at leastone of which we anticipate including in our 2014 drill programme, underpins ourconfidence that we can significantly bolster our existing production andreserves through development at OKE over the next 12 months." OKE Project The OKE Project comprises 1,040 acres in Osage County, Oklahoma. Due to thehistoric lack of investment, Northcote was able to significantly increase itsacreage position within the Mississippi Lime play on attractive terms. Thisoffered the Company an opportunity to apply its strategy of optimisingunderperforming assets. The recent successes experienced by Encana Corporationand Chaparral Energy, which have completed Mississippi wells on leases to thenorth and south of OKE, has strengthened the Company's confidence further. Upon acquisition the property was producing an average of 12 barrels per day ofoil (gross) from seven wells targeting the shallow Bartlesville formation. Thefirst stage of the workover programme, designed to optimise the mechanicaloperation of the field, has now been completed increasing production from 12bopd to 37 bopd. Prior to the acquisition of OKE, the field was partiallyoperated using internally generated power from surplus gas production. Thismeant that production was constrained by the gas volumes produced and were onlyproducing intermittently. The workover involved connecting the field to the electrical grid to establisha consistent power source and also to upgrade pumps and motors at a number oflocations. The installation of new pumps and motors, in conjunction with theelectrification, has resulted in enhanced recoveries and constant 24/7operating capacity. In parallel to the aforementioned workover OKE offers further production andreserve enhancement opportunities, which are expected to lead to an increase inBartlesville production to 50 bopd gross by the end of the year. The Company plans to include at least one prospective location on this propertyin its high impact 2014 drilling programme. Our 2014 programme is anticipatedto include the completion of the current frac programme at our Horizon projectand also the participation in the drilling of operated and non-operated wellsincluding Mississippi Lime targets at Oklahoma Energy. A successful Mississippiwell at OKE can be expected to lead to a significant production and reserveincrease because the current P1 PV10 of $61.94million does not include anyreserves in connection OKE or the recently completed Matthis acquisition. BlueRock Royalty The former owner of OKE entered into the agreement with BlueRock Capital, LLC(`BlueRock'), whereby OKE sold a term overriding royalty interest (`Royalty')to BlueRock to finance the acquisition and development of the Project. It isNorthcote's objective to boost production in the short term in order toaccelerate the payout of the Royalty. As from the date of the acquisition OKE has an obligation to pay at least 41.5%of the gross revenues generated from the OKE project to BlueRock. Thisobligation will be extinguished once BlueRock has received in cash an amountequal to the facility balance, plus an internal rate of return of 15%. Duringthe term of the facility, Northcote earns a maximum of 41.5% of the grossrevenues in the project. After pay-out, the Royalty expires and the company'sNRI increases to 80 per cent. **ENDS** For further information and the full Admission document visitwww.northcoteenergy.com, see below or contact the following: Randy Connally Northcote Energy Ltd +01 214 675 7579 Ross Warner Northcote Energy Ltd +44 7760 487 769 Dan Jorgensen Northcote Energy Ltd +44 (0) 20 7024 8391 Roland Cornish Beaumont Cornish Ltd +44 (0) 20 7628 3396 Jerry Keen Shore Capital Stockbrokers +44 (0) 20 7408 4090 Limited Bidhi Bhoma Shore Capital Stockbrokers +44 (0) 20 7408 4090 Limited Hugo de Salis St Brides Media and Finance +44 (0) 20 7236 1177 Ltd Elisabeth Cowell St Brides Media and Finance +44 (0) 20 7236 1177 Ltd Notes: Northcote Energy Ltd is a revenue generative US onshore oil and gas productioncompany focussed on the rapidly emerging Mississippi Lime formation inOklahoma. The Company participates with leading operators, including MidstatesPetroleum and Chesapeake Energy, in low risk development plays where advancedtechniques, such as horizontal drilling and fracing, are used to unlock knownoil accumulations and dramatically improve recovery rates. Management isfocused on increasing production through a multi-well drilling and frackingcampaign in 2013.