Cabot Energy Regulatory News (CAB)

14 Jun 2005 11:30

For immediate release: 14 June 2005 Northern Petroleum Plc ("Northern" or "the Company") Agreements with Nederlandse Aardolie Maatschappij B.V. to acquire up to eight oil & gas discoveries in the Netherlands Northern Petroleum Plc's wholly owned Netherlands subsidiary, NP NetherlandsB.V. ("NPN"), and Nederlandse Aardolie Maatschappij B.V. ("NAM"), a companyjointly owned by Shell and ExxonMobil, have entered agreements (the"Agreements") involving cooperation onshore Netherlands concerning eightdiscoveries and seven exploration prospects.Under the Agreements, an initial package of up to eight undeveloped oil and gasdiscoveries will, following NPN's exercise of an option ("the Option"), betransferred to NPN who will immediately assume operating responsibility afterreceipt of government approvals. NPN will develop the discoveries and receive100% pay-back of its cost plus an uplift of 30%, thereafter splitting allfuture profits equally with NAM.Six of the discoveries have suspended wells that were successfully tested. Thegross in-place volumes are currently estimated at 170 billion cubic feet of gas(53 bcf net to NPN) and 41 million barrels of oil (12.4million barrels net toNPN)The Agreements further provide for NPN to acquire 50% of NAM's interests in anumber of additional onshore exploration areas where NAM has identified gasprospects. Gross in-place volumes of gas have been estimated at between 0.8 and1.2 trillion cubic feet, in a total area equivalent to seven UK North SeaBlocks. This is 340bcf to 520bcf net to NPN, allowing for partners, other thanNAM, where applicable. NPN will have the right to earn these interests bydrilling and covering the combined NAM and NPN expenses of up to sevenexploration wells, of which NPN has already committed to one, and will beobligated to an additional two upon exercise of the Option. The Agreementprovides for NPN to recover all dry hole costs out of the pre-tax revenues fromfuture discoveries and share the profits from the jointly held stakes with NAMon an equal basis.Northern welcomes the opportunity to gain a valuable portfolio of discoverieswhich we would intend to develop quickly together with access to significantexploration potential in what would represent a major new core area forNorthern in another EU nation.The Agreements are subject to normal Government consents save for the alreadycommitted exploration well scheduled for 2006.Derek Musgrove, Managing Director of Northern stated, "Northern has moved toadd a major new core area to its business as a low-cost operator and explorer.The fact that these NAM discoveries are potentially ready for development, withwells in place is of great importance to us. Northern's proven and probablereserves will then increase and the recognised need for production cash-flowmay be achieved earlier and with significant cost savings.We have an outline plan in place for the development of these assets andgreatly look forward to working with the Netherlands authorities and people todevelop our joint venture projects with NAM over the coming years. Like otherNorthern areas of operation, the onshore of the Netherlands is environmentallysensitive with special local concerns. We will be working together with allstakeholders to build both a profitable and environmentally friendly oil andgas business, not always at the smaller end of the industry."For further information please contact:Derek Musgrove, Managing DirectorNorthern PetroleumTel. 020 7743 6080Ben Simons/Chris RobertsHansard CommunicationsTel. 020 7245 1100ENDNORTHERN PETROLEUM PLC