Completion of GBP10 million sale

21 Oct 2008 07:00

Embargoed for release: 0700 on 21 October 2008

Northern Petroleum Plc ("Northern" or "the Group") Completion of ‚£10 million sale of interest in UGS Application

Northern Petroleum Plc (AIM:NOP), announces that it has received ‚£7 million from Star Energy Group Plc ("Star"). As a result the sale of its entire interests in the Waalwijk underground gas storage ("UGS") projects to Star, a subsidiary of Petronas International Corporation Limited, for a consideration of up to ‚£10 million, has now become unconditional.

Under the agreement further payments of ‚£2 million and ‚£1 million will be made to Northern upon the Final Investment Decisions ("FID") being taken on the UGS projects in the northern and southern parts of the Waalwijk licence respectively.

The sale involves Northern selling its entire shareholding in Gas Storage Limited and Overseas Gas Storage Limited to Star. This transaction has also released Northern from the ¢â€š¬4.5 million contingent consideration due to Wintershall Noordzee B.V. ("WINZ") under the terms of the agreement with WINZ in the event of FID being made before August 2012 on a UGS project within the Waalwijk licence area.

The Group's oil and gas interests within the Waalwijk licence area remain unaffected by this transaction.

Chris Foss, Finance Director, commented:

"Northern is delighted to have completed the sale of these non-core assets for an up front consideration of ‚£7m. This realises a significant profit for the Group and further strengthens our balance sheet. This strength should not be underestimated given current economic turmoil."

For further information please contact:

Northern Petroleum Plc Tel: +44 (0) 20 7469 2900Derek Musgrove, Managing DirectorChris Foss, Finance DirectorGraham Heard, Exploration & Technical DirectorInvestec 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