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

5 June 2015

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

Strategic Relationship to Examine Indonesian Oil and Gas Opportunities

Northcote (AIM: NCT) is pleased to announce that it has added to its portfolio of high impact interests through entering into a Participation Agreement and equity investment in CEB Resources plc ('CEB'), the AIM listed investment vehicle focused on resource opportunities. This provides a third area of interest for Northcote, alongside its existing opportunities in the reopening Mexican energy sector and its onshore US asset base.

Highlights:

· Agreement with CEB whereby Northcote will be entitled, at its option, to participate in up to 12.5% of CEB's participation in any concessions or other oil and gas transactions that it secures in Indonesia for a period of 5 years ('the Participation Right') 

· CEB has today signed an agreement with Corsair Petroleum (Singapore) Pte Ltd ('Corsair') whereby Corsair has agreed to assign a participating interest in a vehicle to CEB which intends to consider and, if applicable, apply for two oil and gas concessions in Indonesia

· In addition, Northcote has subscribed for 50,000,000 ordinary shares of CEB at a placing price of 0.4p per share representing an investment of GBP200,000

· Northcote earned the Participation Right in connection with introductions and assistance provided to CEB and its new management team in connection with this transaction

· Addition to Northcote's expanding international portfolio, alongside the existing interests onshore USA and Mexico

Northcote Managing Director Randall Connally said, "We are excited to have secured the right for Northcote to participate with a world class team of oil and gas professionals in Indonesia. CEB, together with Corsair, is looking at oil and gas production and low cost development assets in one of the premier oil and gas regions in South East Asia and this Participation Right could offer further significant upside and diversification to our portfolio on favourable terms to Northcote. We have also varied our exposure through our equity investment in CEB. This decision was made in consideration of the region's potential and the calibre of CEB's management team, and we look forward to building value through both our investment and participation to create substantial value for our shareholders."

Participation Agreement

The Participation Right has been granted to the Company in return for introductions and assistance provided to CEB and its new management team in connection with its agreement with Corsair. Northcote and CEB have agreed that Northcote shall be entitled to participate in any of CEB's investments, at its sole discretion, in Indonesia for a term of five years from the date of the Agreement. Northcote's participation is up to 12.5% of CEB's participation and NCT must pay its proportional share of all costs and documented prior acquisition costs. 

Equity Investment

CEB, in conjunction with the transaction, has raised £1.5 million at 0.4p in which Northcote has subscribed for 50,000,000 ordinary shares of CEB at a placing price of 0.4p per share representing an investment of GBP200,000 resulting in a 6.6%% shareholding on completion of the placing, which is expected on or around 11 June 2015.

Corsair and CEB

CEB has today announced an agreement with Corsair whereby Corsair has agreed to assign to CEB an interest in a contract it has with PT Wangsa Energi Prakarsa ('Wangsa') to consider and if applicable, apply for two oil and gas concessions in Indonesia. Pursuant to the agreement, Corsair has agreed to assign to CEB, interests in Bid Group Agreements in respect of two assets in Indonesia. The initial two projects which CEB may bid for are highly prospective and with production on one, CEB believes they have the potential to provide an excellent platform for developing a substantial oil and gas business.

CEB intends to conduct initial due diligence on the two projects before making a decision as to whether to proceed with submitting bids. Should CEB be successful in its application for a concession, the transaction will represent a fundamental change in its business and thus be treated as a reverse under Rule 14 of the AIM Rules.

Under the agreement, if either or both applications are successful and are approved by shareholders, CEB shall fund 100% of agreed due diligence, acquisition and development costs (together the 'Investment'). CEB is entitled to receive 90% of all distributions to participating interests from the projects until the total distributions paid to it and Corsair are equal to the Investment and the Company has received a 9% internal rate of return on the Investment. Thereafter, CEB will have a 70% participating interest in the assets, of which Northcote will have the option over 12.5%.

In tandem, David Whitby, who is a highly successful oil and gas specialist with in excess of 18 years' experience in the region, will join the CEB Board as CEO. David has an exceptional regional pedigree having been involved with a significant percentage of the areas' major projects and has a proven track record of building oil and gas businesses, as demonstrated with ASX listed company, Nido Petroleum. 

To view the CEB announcement in full, please go to CEB's website at www.cebresources.com.

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For further information visit www.northcoteenergy.com or contact the following:

Notes:

Northcote Energy Limited is an entrepreneurial energy company with diverse interests. The Company combines a portfolio of US exploration and production assets in Louisiana and Oklahoma with the development of new business opportunities in the US and also in Mexico, such as its participation agreement with MX Oil PLC and agreement with Gaia Ecologica.