Increased Acreage in Oklahoma and Issue of Equity

NORTHCOTE ENERGY LIMITED - Increased Acreage in Oklahoma and Issue of Equity

PR Newswire

London, May 2

Letter of intent to increase Acreage in Oklahoma and Issue of Equity

Northcote (AIM: NCT), an onshore US oil and gas exploration and productioncompany, is pleased to announce that it has entered into a letter of intent toacquire a 100% working interest in leases covering an additional 960 acres(`Matthis') contiguous to the Company's 50.15% owned Horizon Project which, ifcompleted, would significantly increase its acreage position in the producingMississippi Lime formation in Osage County, Oklahoma to 2,865 acres(`Acquisition').

Key Highlights

Northcote's Chief Executive Officer Randy Connally said, "Following successfulcompletion of the Matthis Acquisition, we will be over halfway towards meetingour end of year target of building a net land position covering 5,000 acres inOsage and contiguous counties. Neighbouring our core Horizon Project, theMatthis property is a very exciting acquisition and we have put considerableeffort into acquiring the property which is not only located in a productivearea, but will also allow us to leverage existing infrastructure as we look togrow our Mississippian production and reserves further. Being comparativelyunder-developed and combined with a 100% WI, we believe Matthis provides ourshareholders with exposure to significant value upside potential throughdevelopment and workovers of existing wellbores. In addition with at least twohorizontal drilling locations highlighted to date, we are confident that thereis plenty of underlying value to be realised from our investment over thecoming months.

"Since listing on AIM at the beginning of the year, we have strived todemonstrate the scale of our ambition through the swift implementation of workprogrammes and acquisitions. We are grateful for having secured a supportiveinstitutional investor base since the IPO and through the placing in March andwe are now pleased to welcome to that group one of Australia's largest privateinvestment companies, Cape Bouvard. I am hopeful that its subscription forA$1million (£663,922) represents the start of a strong, long term associationwith the Company as we focus on becoming a significant producer in thede-risked Mississippi Lime play."

Matthis Property

The Matthis Acquisition comprises the purchase of 1,280 gross acres, inclusiveof 320 gross acres previously acquired via farm-in. This acquisition conveysall rights to all objectives to Northcote on the 320 acres previously acquiredvia farm-in and adds 960 acres contiguous to two of the Company's existingwells acquired as part of the Horizon Project (approx. 51% WI) in Osage County,Oklahoma. The approximate 320 acres held by the Steel and Steinberger producingwells were held by Northcote in the Mississippian only, with this acquisitionNorthcote acquires all rights on those leases.

Eight vertical wells exist on the property and its production directly offsetsNorthcote's two existing, producing wells, Steele and Steinberger, two of thebest performing wells on the Horizon Project.

3-D seismic exists covering a portion of the leasehold and the Company hasalready identified two potential horizontal well locations. Significantly, allof the leases are part of a "unit" and as such production on any part of theunit holds the entire lease position indefinitely, all of the acreage underthese leases are therefore held by production.

Subscription by new strategic investor

The Company has raised A$1million (£663,922 before expenses of £2,000) by wayof a subscription of 42,833,707 new ordinary shares (`Subscription Shares') byCape Bouvard at a price of 1.55 pence per share. Cape Bouvard is one ofAustralia's largest private investment companies. The Subscription Shares willrepresent approximately 4.0% of the enlarged issued share capital of theCompany and the proceeds will be used to acquire assets and to accelerate thedevelopment programme.

The subscription is conditional, inter alia, on receipt of cleared funds fromCape Bouvard and admission of the Subscription Shares to trading on AIM. It isexpected that trading in the Subscription Shares on AIM will begin, at 8 a.m.on 9 May 2013. The Subscription Shares will rank pari passu in all respectswith the Company's existing ordinary shares of 0.1p each ("Ordinary Shares").

Following completion of the subscription, the Company's issued share capitalwill consist of 1,066,627,375 Ordinary Shares.

All of the technical information, including information in relation to reservesand resources that is contained in this announcement has been reviewedinternally by the Company's Technical Director, Mr. Kevin Green. Mr. KevinGreen is a Petroleum Geologist who is a suitably qualified person with over 30years' experience in assessing hydrocarbon reserves and has reviewed therelease and consents to the inclusion of the technical information.

For further information and the full Admission document visitwww.northcoteenergy.com, see below or contact the following:

Northcote Energy Ltd is a revenue generative US onshore oil and gas productioncompany focussed on the rapidly emerging Mississippi Lime formation inOklahoma. The Company participates with leading operators, including MidstatesPetroleum and Chesapeake Energy, in low risk development plays where advancedtechniques, such as horizontal drilling and fracing, are used to unlock knownoil accumulations and dramatically improve recovery rates. Management isfocused on increasing production through a multi-well drilling and fracingcampaign in 2013.