24 Oct 2008 07:00
Embargoed for release: 0700 on 24 October 2008
Northern Petroleum Plc ("The Group" or "the Company") Po Valley Farm-outs
Northern Petroleum Plc announces that its wholly owned subsidiary, Northern Petroleum (UK) Limited, ("Northern") has farmed out three of its Po Valley licences in Italy, namely Savio, Cerasa and Longastrino, to Avobone Italy S.r.l. ("Avobone"), an Italian subsidiary of the Indofin Group ("Indofin"), a private global investment company.
Under the terms of the farm-out agreements ("Agreements"), Avobone will earn 20% in each licence through payment of back costs to Northern and a promote on the first well in each licence. In Savio and Longastrino, Avobone will pay 40% (i.e. a 20% promote) of the well costs and 30% in Cerasa. The benefits of the Agreements will be shared equally between Northern and a subsidiary of ATI Oil Plc.
The mean, combined and unrisked Prospective Resources of all mapped prospects in the three licences is 750 bcf (100%) recoverable. The first well is Savio 1x which is currently planned to be drilled in the first quarter of 2009 and will test prospective horizons down to 3720m with mean Prospective Resources of 232 bcf, considerably higher than announced before as shallower secondary targets have not previously been included within our estimates. All necessary approvals for the well have been granted save the final environmental approval which is expected to follow in due course.
The Cerasa and Longastrino wells are shallower and the first well targets have mean Prospective Resources each of some 40 bcf recoverable. Drilling programs are in early stages of preparation.
Derek Musgrove, Managing Director, stated:
"We are pleased to welcome Indofin as a new partner in three of our Italian licences. This marks the completion of the first of several deals under discussion which I believe will demonstrate the prospectivity of the Group's Italian licences. We perceived the potential of the Po Valley ahead of the new climate of gas oil prices and have been progressing these prospects for several years.
"The introduction of new partners is part of our risk management strategy ahead of production cash flow from the six oil and gas field developments in The Netherlands."
About Indofin
The Indofin Group is a globally operating investment group with offices in Geneva, Houston, Paris and Rotterdam. Founded in 1968, Indofin is actively involved in the provision of private equity and the management of companies in Europe, the U.S., Canada, Australia and Asia, through minority and majority participations. The Group is 100% owned by the De Bruin family.
The Group is involved in equity investments sectors such as shipping and shipbuilding, energy services, technology and media, natural resources, real estate and others. Its investments in the E&P sector are channelled through Parkland Resources.
See http://www.indofin.nl/home.html and http://www.parklandresources.com/ pr-home.html
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 Plc Tel: +44 (0) 20 7469 2900
Derek Musgrove, Managing Director
Chris Foss, Finance Director
Graham Heard, Exploration & Technical Director
Investec Tel: +44 (0) 20 7597 5000Michael Ansell / Patrick RobbBlue Oar Tel: +44 (0) 20 7448 4400Jerry KeenBishopsgate Communications (Press) Tel: +44 (0) 20 7562 3350
Nick Rome / Maxine Barnes
Buchanan Communications (Analysts) Tel: +44 (0) 20 7466 5000
Tim Thompson / Ben Romney
vendor