Cabot Energy Regulatory News (CAB)

29 Dec 2005 07:00

Embargoed: 0700hrs on 29 December 2005 Northern Petroleum Plc ("Northern") Update: Agreements with Nederlandse Aardolie Maatschappij B.V. in theNetherlandsUnder agreements signed on 11th August 2005 ("the Agreements") betweenNorthern's wholly owned Netherlands subsidiary, NP Netherlands B.V. ("NPN") andNederlandse Aardolie Maatschappij B.V. ("NAM"), a company jointly owned byShell and ExxonMobil, NPN has, after a period of due diligence to permit a fulltechnical review of the licences held by NAM, exercised various options.Undeveloped Discoveries: Licence Discovery Status NPN Anticipated Interest Drenthe Grolloo Committed 60% Andel II Brakel Committed 100% Andel II Andel Committed 100% The exercise of these three options brings the number of discoveries that NPNhas committed to under the Agreements to five following the earlier exercise ofthe options over the Geesbrug and Ottoland discoveries as announced on 12thAugust 2005.NAM will now arrange the licence split and assignment of its participatinginterest in the three committed discoveries to NPN who will immediately assumeoperating responsibility after receipt of government approvals. The discoveriesare in two onshore part-areas within the Drenthe Licence and the Andell IILicence, which is close to the Papekop discovery for which the NetherlandsMining Council ("Mijnraad") has recommended the award of a production licenceto NPN.Exploration Options:Under the Agreements, NPN will also farm-in to an onshore explorationpart-area, in the Andel II Licence, and has agreed a two month extension to itsoption with NAM on the Schagen prospect during which time NPN will complete itsdue diligence. NPN will earn 50% of NAM's interests by drilling and coveringthe combined NAM and NPN expenses of one exploration well in each part-area andwill subject to Government consent assume operatorship of the Andel IIexploration part-area. The Agreements provide for NPN to recover all dry holecosts out of the pre-tax revenues from future discoveries and share the profitsfrom the jointly held stakes with NAM on an equal basis.NPN estimates the unrisked gross in-place volumes of the identified oil and gasprospects within the Andel II part area to be between 55 and 130 billion cubicfeet of gas and 62 and 148 million barrels of oil. NPN estimates unrisked grossin-place volumes of gas in the remaining option to be between 200 and 270billion cubic feet.Derek Musgrove, Managing Director of Northern, commented:"We have now committed to develop five of NAM's oil and gas discoveries in theNetherlands alongside our Papekop project. The end of the process we are nowembarking upon will truly transform Northern into a significant producer ofoil, gas and electricity that is able to sustain growth out of cash flow."For further information, please contact:Northern Petroleum PlcChris Foss, Finance DirectorTel: 020 7743 6080InvestecMichael AnsellTel: 020 7597 5000Hansard CommunicationsChris Roberts/Ben SimonsTel: 020 7245 1100ENDNORTHERN PETROLEUM PLC