23 Apr 2007 07:00
Embargoed for release: 0700 on 23rd April 2007
Northern Petroleum Plc ("Northern" or "the Company")
Northern receiving ¢â€š¬32 million and gas production in deals with Dyas B.V. involving partial transfer of certain Dutch licences. An International Strateg ic Alliance established.
Northern Petroleum Nederland B.V., a subsidiary of Northern, has signed a binding Heads of Agreement (HOA) with Dyas B.V. under which Dyas B.V. will acquire a quarter of the Northern Petroleum Nederland B.V. interests in six oil and gas discoveries and three exploration wells. In exchange, Dyas B.V. will transfer a 23.6% interest in the producing gas field in block P12, a 30.4% interest in two gas discoveries in the Zuid Friesland permit and pay ¢â€š¬18million in cash. Northern Petroleum Nederland B.V. will retain a 5% overriding oil production royalty over part of the transferred oil reserves in the Ottoland and Papekop oil fields.
Under a separate Strategic Alliance Agreement ("Strategic Alliance") both companies will work together to identify and pursue new business opportunities in mutually agreed regions of the world excluding all existing licences and applications. Northern Petroleum Plc will be the management company, Operator, for the Strategic Alliance. Under the terms of this agreement in addition to the Dyas pro-rata share of costs, Northern will receive payments of ¢â€š¬14 million commencing on signature and over a period of three years, for Northern's proprietary knowledge.
Dyas B.V. - Northern Petroleum Nederland B.V. Agreement Highlights:
* Dyas B.V. ("Dyas") will transfer to Northern Petroleum Nederland B.V. ("NPN") its participating interest in the offshore P12 production licence (23.6%) Dyas will retain full economic rights to the prospect MB3 in P12. * Dyas will transfer the onshore Zuid Friesland II Exploration Licence (30.4%). retaining a net profits interest of 50% after 130% pre-tax payback of all capital costs in two gas discoveries in Zuid Friesland II. * Dyas will pay a cash consideration of ¢â€š¬18 million to NPN. * NPN will transfer to Dyas 25% of its post-State participation licence interests at effective date. NPN will additionally retain an over-riding royalty of five percent (5%) commencing when the gross oil production exceeds 90% of the NPN Proven oil reserves; namely over 6 million barrels on Papekop and over 4.6 million barrels on Ottoland. * The P12 interest, for which Wintershall Nordzee is the operator, initially adds 1.6 mmscfd (280 boed) production and 1.2 bcf of proven developed reserves to NPN. The forecasted 2007 revenues and pre-tax cashflow are ¢â€š¬2.6 million and ¢â€š¬1.6 million respectively at present gas prices. Additionally, a drill-ready prospect exists 8km from the P12 platform with an un-risked gross gas in place calculated at 38 bcf.
The two onshore discoveries in Zuid-Friesland II have a combined gas in place of 108 bcf (32.8bcf or 5.5 million boe net to the interest) and are well suited to a gas-to-electricity development similar to those planned for NPN's other gas fields in The Netherlands.
* The NPN properties in which a 25% interest is being transferred to Dyas are
Andel III Exploration Licence (Andel VI, Brakel and Ottoland discoveries)
Papekop Production Licence (Papekop discovery)
Drenthe Production Licence Part Area (Geesbrug and Groloo discoveries)
* The effective date of the Agreement is 1st January 2007
Dyas - Northern Strategic Alliance Highlights:
* Dyas and Northern have agreed to combine efforts to target new business opportunities by licence applications, farm-ins and acquisitions in an agreed geographical area excluding existing licences and licence applications and the Netherlands. * Northern has for some years been deploying its skills and resources on new business development and will take the operator and management company role. * The Strategic Alliance will have an initial period of 4 years and in consideration for the provision of know-how, database value and opportunities Dyas will make a total payment of ¢â€š¬14 million over the alliance period to Northern and cover the Dyas pro-rata share of all costs.
Derek Musgrove, Managing Director of Northern, stated:
"The Netherlands HOA gives NPN a further 280boed to add to the 330boed acquired from Wintershall and two further onshore gas discoveries holding an estimated 32.8 bcf in place net to the 30.4% interest.
"I am sure that our ongoing development of the six oil and gas fields will benefit from having in Dyas another strong Dutch partner. It is pleasing that an experienced local company has recognised the value and potential of the N orthern projects at this stage of development and made a clear demonstration of their confidence in the NPN team's capabilities to put the fields into production.
"The Strategic Alliance combines two companies with complimentary skills and strengths that will enable Northern to seize opportunities to grow in other areas. The additional financial resources, added to approximately ‚£ 13.5 million of cash currently in hand, ensures that we can readily continue to undertake the field development works in The Netherlands as soon as approvals are obtained and start to bring forward our activities in Italy."
In accordance with the AIM Rules - Guidance for Mining and Oil & Gas Companies, the information contained in this announcement has been reviewed and signed off by the Exploration Manager of Northern, Mr Graham Heard BSc (Hons), who has over 30 years experience as a petroleum geologist.
For further information please contact:
Northern Petroleum Plc Tel: +44 (0) 20 7743 6080
Derek Musgrove, Managing Director
Chris Foss, Finance Director
Graham Heard, Exploration Manager
Investec Tel: +44 (0) 20 7597 5000
Michael Ansell / Patrick Robb
Panmure Gordon & Co Tel: +44 (0) 20 7459 3600
Katherine Roe/ Ashton Clanfield
Bishopsgate Communications Limited Tel: +44 (0) 20 7562 3350
Nick Rome / Maxine BarnesNotes to Editors:Northern Petroleum Plc
Northern Petroleum Plc is an AIM listed oil and gas production, development and exploration company with core interests under its management in The Netherlands, Italy and the United Kingdom.
Northern is currently embarked upon a programme to place two oil fields and four gas fields into production with works on the first two, Ottoland and Brakel starting in March and April 2007.
The Company has recently acquired the management interests in the producing Waalwijk gas field where it intends to implement plans to increase late phase gas, production and move to develop a 30 Bcf underground gas storage facility alongside Star Energy and Essent. The NPN deal with Dyas is the second gas production acquisition in 2007 to date.
Northern's Netherland partner list is impressive.
The Company has the second largest exploration position in Italy of licences under management where activities can be expected to pick-up as the result of the extra funds now available. In addition the Company has announced plans to drill a projected eastward extension of the producing Horndean oil field in West Sussex and another exploration well in the county.
Further information on Northern is available at www.northpet.com.
Dyas B.V.
Dyas is an active investor in oil and gas exploration, development and production joint ventures, always as a non-operator, with a focus on onshore the Netherlands and the North Sea. The size of Dyas equity in joint ventures ranges from 1 - 50%, and is normally between 10 - 20 %. Net 2006 developed oil and gas reserves are some 43 million bbl oil equivalent, split approximately 50 /50 in oil and gas, with a daily production level of 17,500 bbl oil equivalent. For more details, please see at www.dyas.nl
The company is a 100 % subsidiary of the privately owned SHV Holdings NV. In 1896 a group of leading Dutch coal importers founded the Steenkolen Handels Vereeniging NV (Coal Trading Association), which was a merger between a number of large coal trading companies, some of which had been active since the 18th century. Today SHV's activities involve trade and distribution in LPG (SHV Gas), trade in food and non food consumer articles (Makro), provision of venture capital (NPM Capital), trade in and production of raw materials (Recycling), investing in renewable energy (Econcern), the heavy lifting and transporting specialists (Mammoet) and exploration and production of oil and gas (Dyas). For further details, please see at
NORTHERN PETROLEUM PLC