22 Jan 2009 07:00
22 January 2009 NORTHERN PETROLEUM PLC Shell Farmout Completed Northern Petroleum Plc announces that its wholly owned subsidiary, NorthernPetroleum (UK) Limited, ("Northern") and Shell Italia E&P S.p.A ("Shell") havecompleted all the conditions under the agreement for the farm out of six ofNorthern's offshore Sicily Channel licences in Italy announced on 4th December2009, namely GR17-NP, GR18-NP, GR19-NP, GR20-NP, GR21-NP, GR22-NP ("SicilyChannel Licences"), to Shell.
Following notification from the Italian authorities the licences are now held:
GR17-NP, GR18-NP and GR19-NP. (Shell 55% - Northern 45%)
GR20-NP, GR21-NP and GR22-NP. (Shell 70% - Northern 30%)
At completion Shell paid €1.9 million covering all of Northern's back-costs onthese licences. Shell will further pay all costs of the Q4 2008 reprocessingand the Q1 2009 2D seismic programme. Thereafter they will fund all costs oftwo 3D seismic surveys if proposed by Shell and the optional drilling andtesting of a first well.
Northern will remain the Operator during the initial seismic phase and Shell will assume operatorship for the drilling phase.
The Agreement with Shell also envisages that Northern and Shell will hold further discussions on expanding the partnership in Italy.
We are now progressing the winter 2009 2D seismic campaign. Negotiations withthe preferred contractor are close to completion following Ministry approval ofthe programme which will be in conjunction with a second survey over licenceCR147-NP in the Italian part of the Oligo-Miocene deposits which are oilproducing in production in nearby Tunisian waters.
Derek Musgrove, Managing Director, of Northern Petroleum Plc, stated:
"This concludes the arrangements for Shell to join us as a partner in theseoffshore Sicily Channel licences. Shell will bring to the project Italianthrust belt mapping and production experience, in addition to its internationalmajor project and deepwater expertise. I am sure that the two teams will workwell together.In 2003, we perceived the potential of the thrust belt play in the SicilyChannel and have been working on these licences for several years. The areaunder licence in the Sicily Channel is 4367 km2 (equivalent to about 20 NorthSea blocks) and if drilling is successful it could open up a new WesternEuropean hydrocarbon province. I note that Northern has reached the stage ofrecognising mapped un-risked prospective resources at a cost of less than aeuro-cent per barrel. The deal with Shell means that the position may now beupgraded to reserves at no overall cost.
This marks the completion of a second Italian deal in recent months further demonstrating the prospectivity of the Group's Italian licences."
In accordance with the AIM Rules - Guidance for Mining and Oil & Gas Companies,the information contained in this announcement has been reviewed and signed offby the Exploration and Technical Director of Northern, Mr Graham Heard CGeolFGS, who has over 30 years experience as a petroleum geologist.
For further information please contact:
Northern Petroleum PlcTel: +44 (0) 20 7469 2900Derek Musgrove, Managing DirectorChris Foss, Finance DirectorGraham Heard, Exploration & Technical DirectorInvestecTel: +44 (0) 20 7597 5000Michael Ansell / Patrick RobbBlue OarTel: +44 (0) 20 7448 4400Jerry KeenBishopsgate Communications (Press)Tel: +44 (0) 20 7562 3350Nick Rome / Maxine BarnesBuchanan Communications (Analysts)Tel: +44 (0) 20 7466 5000Tim Thompson / Ben RomneyNotes to Editors:
Northern has recoverable Proven and Probable reserves of 76.5 million barrels of oil equivalence.
Following a deal with the joint Shell and ExxonMobil subsidiary, NAM, Northernbecame the Netherland's second largest onshore oil company in terms of oil andgas reserves, with 45.5 million boe recoverable. It is currently producing gasat Waalwijk and the offshore P12 fields. The planned development of six onshoreoil and gas fields is being progressed through the Netherlands authorisationand planning processes. Partners in these projects include Dyas B.V., EBN andNAM. Northern recently sold its interest in the Waalwijk Underground GasStorage projet application for an overall consideration of £10 million.Northern manages the largest licensed exploration area in Italy, over 13,000 km²,predominantly offshore but includes seven licences in the Po Valley oil andgas province in the north of the country where the drilling of the Savio 232bcf gas prospect is being progressed. Through its holdings in licences in thesouthern Adriatic covering the Rovesti and Giove oil discoveries it has netProbable oil reserves independently assessed at 26.6 million barrelsrecoverable. It has recently signed a deal with Shell Italia refundingNorthern's past costs and providing for Shell Italia to fund the next phases ofexploration of a potential new oil province in the extension of the Apenninethrust system offshore Sicily.In the UK the Group is also a significant holder of licences in the south ofEngland where it has a 10% interest in the production from the Horndean oilfield and a 5% interest in the Avington development. In 2009 it is planning todrill an eastward extension of the Horndean oil field. Northern has a 50%interest in the venture.
About Shell Italia E&P S.p.A
Shell Italia E&P is a wholly owned indirect affiliate of Royal Dutch Shell plc.It is one of Italy's largest producers with a stake in the Val d'Agri field(Eni operated). Shell also holds a participating interest in the Tempa Rossafield (Total operated), which is under development in Basilicata, where thegreatest onshore deposits in Western Europe have been discovered.
See
http://www.shell.com/home/content/it-it/shell_for_businesses/exploration_production/shell_enterprise_0319.html
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