8 Jun 2017 07:00
Northern Petroleum Plc
("Northern Petroleum" or "the Company")
Italian onshore production acquisition
Northern Petroleum (AIM:NOP), the AIM quoted oil and gas company focusing on production led growth, announces the acquisition of onshore production and development gas assets (the "Acqusition Assets") in Italy from Rockhopper Mediterranean Limited, a wholly owned subsidiary of Rockhopper Exploration Plc ("Rockhopper").
The Acquisition Assets comprise a 100 per cent. interest in the Aglavizza production concession, which contains the producing Civita gas field and associated processing facilities and pipeline ("Civita"), a local operations base, and the following production concessions, containing suspended wells, and an exploration permit:
§ Scanzano Concession (100% interest)
§ Torrente Celone Concession (50% interest)
§ Monte Verdese Concession (60% interest)
§ San Basile Concession (85% interest)
§ Civita Permit (100% interest)
Civita, which is tied into the national gas network, was commissioned in late 2015 and averaged gas production of 130 barrels of oil equivalent per day during 2016. The field is estimated to contain approximately 1 bcf of recoverable gas according to internal estimates.
The Company is reviewing the potential for the redevelopment of the Cupoloni field in the Scanzano Concession and the further subsurface potential of the Vigna Nocelli field in the Torrente Celone concession.
Northern Petroleum will assume the abandonment liabilities of the production concessions, which, excluding Aglavizza and the two fields with redevelopment potential, are estimated to be approximately €3 million and forecast to be incurred over the next ten years. Rockhopper will pay Northern Petroleum US$1.6 million on completion of the acquisition. This is subject to inter alia Italian regulatory approval and is expected to occur later in the year. The acquisition has an economic effective date of 1 January 2017.
Revenue and operating profit, excluding intra-group recharges, depreciation and impairment charges, attributable to the Acquisition Assets for the 12 months ended 31 December 2016 was €1.1 million and €0.7 million respectively. The operating profit from the Civita gas field was €0.9 million.
Keith Bush, Chief Executive Officer of Northern Petroleum, commented:
"This acquisition is the Company's first step into the valuable gas production market in Italy and complements our oil production in Canada. The deal is directly in line with our production led growth stategy, allows us to utilise our Italian tax position efficiently and demonstrates our ability to continue to grow production at little or no cost.
"We consider Italy to have further acquisition opportunities for growth and will continue to evaluate additional assets to supplement those acquired today, as we look to build an Italian production and development business."
Prior to publication, certain information contained within this announcement was deemed to constitute inside information for the purposes of Article 7 of EU Regulation 596/2014. Upon publication of this announcement, this information is now considered to be in the public domain.
-Ends-
For further information please contact:
Northern Petroleum Plc Tel: +44 (0)20 7469 2900
Keith Bush, Chief Executive Officer
Nick Morgan, Finance Director
Stockdale Securities Limited (Nomad and Joint Broker) Tel: +44 (0)20 7601 6100
Antonio Bossi
David Coaten
FirstEnergy Capital LLP (Joint Broker) Tel: +44 (0)20 7448 0200
Jonathan Wright
FTI Consulting Tel: +44 (0)20 3727 1000
Edward Westropp
Note to Editors:
Northern Petroleum is an oil and gas company focused on production led growth. The Company is undertaking a redevelopment and production project in north west Alberta and has a broader portfolio of exploration and appraisal opportunities in countries of relatively low political risk, primarily Italy. Comprehensive information on Northern Petroleum and its oil and gas operations, including press releases, annual reports and interim reports are available from Northern Petroleum's website: www.northernpetroleum.com