Cabot Energy Regulatory News (CAB)

23 Aug 2006 07:00

Embargoed: 0700 hrs on 23 August 2006 Northern Petroleum Plc ("Northern" or the "Company") Farmout Agreement Wholly owned subsidiaries of Northern Petroleum Plc and ATI Oil Plc ("ATI")have concluded a farmout agreement with Stratic Energy Corporation ("Stratic")covering the Longastrino and Savio licences in the Po Basin in Italy, subjectto the usual governmental and regulatory approvals.Under the terms of the agreement, Stratic has committed to fund the acquisitionof seismic data together with related technical interpretation work up to amaximum of Euro 1 million in exchange for the options to drill a single well oneach permit to earn a 50% working interest in both permits. Stratic's totalcommitment, if the options on both permits are exercised, is Euro 9.05 million.At this time, both Northern Petroleum and ATI Oil, who currently each hold 50%of the licences, will have their interest decreased by 25% respectively, withNorthern Petroleum (UK) Ltd retaining operatorship.The Longastrino and Savio licences are located in the prolific Po Valley areanear the eastern coast of northern Italy, adjacent to Grove Energy's San Marcoacreage upon which the Abbadesse gas discovery has recently been made.Furthermore, in 2002, the Agosta gas field was discovered by ENI on a licenceadjacent to Longastrino. Nine stratigraphic leads in the acreage have beenidentified and further seismic data over the next six months will be acquiredto enable these leads to be firmed up for drilling in 2007.Derek Musgrove, Managing Director or Northern, commented,"We are delighted to welcome Stratic as partners to two of our Italianlicences. The Directors' past experience of success in Italy, with EnterpriseOil, which was taken over by Shell, is certain to make a valuable contributionto our combined efforts."For further information contact:Northern Petroleum Plc Investec Derek Musgrove, Managing Michael Ansell Director Tel: +44(0)20 7597 5000 Graham Heard, Exploration Manager Tel: +44(0)20 7743 6080 Panmure Gordon & Co Hansard Communications Katherine Roe Chris Roberts / Ben Simons Tel: +44(0)20 7459 3600 Tel. +44(0)20 7245 1100Notes to editors:The Po ValleyThe Po Valley is Italy's most prolific gas basis, having produced more than 4tcf (trillion cubic feet) of gas since the 1950s from more than 30 fields.Access to the area by international companies was restricted until the late1990s as the state oil company had exclusive rights over the vast majority ofthe acreage in the region. Most hydrocarbons (biogenic gas) in the region arefound in Pliocene or Pleistocene reservoirs in anticlinal thrust belts and,lately, in stratigraphic traps. On the Longastrino and Savio permits targetreservoir zones are in the range 2,500 - 3,000 metres. Italy operates a "drillor drop" licensing regime, under which companies have the option, afterfulfilling data acquisition commitments, to drill a well to secure acreage intofurther activity phases, or to drop the acreage if prospectivity is low. A taxand royalty regime is operated in the country with an overall local and statetax take of approximately 35%.Northern PetroleumNorthern Petroleum is a junior oil and gas exploration and production company,focussed on the EU, with major assets in the Netherlands, Italy and the UK.Northern holds a 50% interest in 22 licences and successful applications inItaly covering 12194 square kilometres which will represent the second largestarea under exploration in Italy by any one company.Stratic Energy CorporationStratic is an international exploration and development company with gasdevelopments in Turkey, oil developments in the UK North Sea and explorationacreage in Morocco and Syria. Further information can be found on the company'swebsite at www.straticenergy.comENDNORTHERN PETROLEUM PLC