Northern Petroleum PLC announces that its wholly owned subsidiary, Northern Petroleum Limited (NPL) has today reached settlement with Arkhangelskgeoldobytcha (AGD) concerning a dispute relating to the Tedinskoye and Yuri Rossikhin oil fields in the Timan Pechora basin within the western arctic region of Russia. Under the terms of the settlement, it has been agreed that all claims and counterclaims will be withdrawn or allowed to fall away.

The Directors of Northern Petroleum have taken this step in order to avoid the continuance of what had the potential of being a protracted and costly dispute and to crystallise capital losses which might expected to have a significant value to the Company. In addition, it is possible that, following the settlement, Northern Petroleum Plc can generate a material capital loss that might be of value in the future in the event of asset disposals.

Richard Latham, Chairman, commented,

"Northern has significant prospects and opportunities which require the full attention of our management. Our agreement to accept this nominal settlement and withdraw from proceedings will allow us to focus on our core business activities which include the drilling of several highly attractive prospects in England as well as maximizing the potential of our Spanish and Italian interests.

I believe this decision to be in the interest of Northern Petroleum and its shareholders."

For further information please contact:

Graham Heard/Gillian Hunt
Northern Petroleum Plc
Tel 020 7743 6080

Chris Roberts/Ben Simons
Hansard Communications
Tel. 020 7245 1100