4 Oct 2007 07:00
4 October 2007 Northern Petroleum Plc ("Northern" or "the Company") Additional 9.8 million barrels of Probable Oil Reserves
Northern is pleased to announce that it has received the first of three independent petroleum engineering reports concerning the Giove, Rovesti and Medusa oil discoveries in the southern Adriatic Sea.
On the basis of two wells drilled by Enterprise Oil in 1998 and the independent report produced by Blackwatch Petroleum Services Limited, Northern has been advised that at this stage of our progress on the Giove Project the reservoir tested by two wells drilled in 1998 contains 19.67 million barrels of Probable oil reserves.
The preliminary economic evaluation, included in the report, assuming a $60 per barrel price for Brent crude oil and deducting a tariff to allow for the heavy crude, 16‹¡ - 20‹¡ API, suggests a value of US$177 million for the oil field Probable reserves at a 10% real terms discount rate prior to examining financing options or leasing of the main capital expenditure items.
Northern has a 100% interest in the licence, but ATI Oil Plc holds a 50% commercial interest in the project. Northern hold a 37.5% interest in ATI Oil Plc giving rise to Northern holding a 68.75% net beneficial interest and resulting in a net beneficial 13.5 million barrels of the Giove discovery.
Work is now progressing on an examination of Rovesti which is estimated to be of similar size, has a lighter crude of 25‹¡ - 30‹¡ API and is deeper. Northern therefore anticipate a higher recovery of oil from it, but await the delivery of the commissioned report.
Derek Musgrove, Managing Director of Northern said: "This is highly satisfactory progress. It is considered that development would be through a sub-sea completion and lifted to a FPSO as was the case at the nearby Aquila oil field. A maximum production rate of over 23,000 bopd has been projected.
The FPSO represents the major part of the capital costs and a leasing arrangement or lease-purchase would be advantageous. At this stage the working assumption is that the independent engineering examination of Rovesti will be encouraging and that afterwards consideration will be given to combined development scenarios.
I wish to emphasise the importance of the Southern Adriatic as a core area for the company. Our ongoing geological and geophysical works using the substantial existing data base are yielding up a considerable number of sizeable drilling prospects in this oil and gas rich basin which stretches across to Albania and Montenegro oil fields."
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 PlcDerek Musgrove, Managing DirectorChris Foss, Finance DirectorGraham Heard, Exploration and Technical DirectorTel: +44 (0)20 7743 6080InvestecMichael Ansell / Paul BrettTel: +44 (0) 20 7597 5000Panmure Gordon & CoKatherine Roe / Ashton ClanfieldTel: +44 (0)20 7459 3600Bishopsgate Communications LimitedMaxine Barnes / Nick RomeTel: +44 (0) 20 7562 3350
NORTHERN PETROLEUM PLC