26 Jan 2009 07:00
NORTHERN PETROLEUM PLC Drilling Update Savio-1X Well Targets 332 bcf of Gas
Northern Petroleum Plc. announces that its wholly owned subsidiary, Northern Petroleum (UK) Limited ("Northern") has succeeded in putting all pre-drilling approvals in place, signed a drilling rig contract and commenced site construction works. This is the start of a more active period of operational activities in Italy.
The Savio-1X well will be Northern's first well drilled in Italy under company management. It is located in the Regione of Emilia-Romagna in the main onshore area of the Po Basin biogenic gas play. The prognosis is that the well will reach the primary target at 3200 metres sub-surface with estimated mean gas in place of 222 bcf. On the drill path to the primary target it is anticipated to pass through a secondary in sub-optimum position which has been estimated to have the mean potential of entrapment of 110 bcf of gas. This is a combined mean un-risked Prospective resource of 332 bcf. as previously announced.
Northern's mapping has had the benefit of access to a seismic survey tie into the Stratic Energy/Eni recently discovered gas field at Longanesi.
As announced on 24th October 2008, for the onshore Savio licence Northern has reduced its business risks and call upon cash balances through a farmout agreement with Avobone Italy S.r.l, a member of the Indofin Group. Avobone will be paying 40% of the well costs. Following completion of that agreement the licence interests will be:
Northern 80%Avobone S.r.l. 20%
(ATI Oil Plc has a commercial interest equal to half that of Northern).
Derek Musgrove, Managing Director, Northern Petroleum Plc. stated:
"We are increasing our activity level in Italy. This is a milestone in progressing our very large Italian project. The odds of success have been assessed as reasonable, but nevertheless it is an exploration well. The structure is of higher than average potential for the region.
Any discovery will benefit from the availability of an extensive infrastructure of gas pipelines and gas fired power stations throughout the region which has one of Europe's highest GDPs".
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 and Technical Director of Northern, Mr Graham Heard CGeol FGS, who has over 30 years experience as a petroleum geologist.
For further information please contact:
Northern Petroleum PlcTel: +44 (0) 20 7469 2900Derek Musgrove, Managing DirectorChris Foss, Finance DirectorGraham Heard, Exploration & Technical DirectorInvestecTel: +44 (0) 20 7597 5000Michael Ansell / Patrick RobbBlue OarTel: +44 (0) 20 7448 4400Jerry KeenBishopsgate Communications (Press)Tel: +44 (0) 20 7562 3350Nick Rome / Maxine BarnesBuchanan Communications (Analysts)Tel: +44 (0) 20 7466 5000Tim Thompson / Ben RomneyNotes to Editors:
Northern has recoverable Proven and Probable reserves of 76.5 million barrels of oil equivalence.
Following a deal with the joint Shell and ExxonMobil subsidiary, NAM, Northern became the Netherland's second largest onshore oil company in terms of oil and gas reserves, with 45.5 million boe recoverable. It is currently producing gas at Waalwijk and the offshore P12 fields. The planned development of six onshore oil and gas fields is being progressed through the Netherlands authorisation and planning processes. Partners in these projects include Dyas B.V., EBN and NAM. Northern recently sold its interest in the Waalwijk Underground Gas Storage project application for an overall consideration of £10 million.
Northern manages the largest licensed exploration area in Italy, over 13,000 km², predominantly offshore but includes seven licences in the Po Valley oil and gas province. Through its holdings in licences in the southern Adriatic covering the Rovesti and Giove oil discoveries it has net Probable oil reserves independently assessed at 26.6 million barrels recoverable. It has recently signed a deal with Shell Italia refunding Northerns' past costs and providing for Shell Italia to fund the next phases of exploration of a potential new oil province in the extension of the Apennine thrust system offshore Sicily.
In the UK the Group is also a significant holder of licences in the south of England where it has a 10% interest in the production from the Horndean oil field and a 5% interest in the Avington development. In 2009 it is planning to drill an eastward extension of the Horndean oil field. Northern has a 50% interest in the venture.
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