Northern Petroleum Plc’s wholly owned Netherlands subsidiary, NP Netherlands B.V. (“NPN”), and Nederlandse Aardolie Maatschappij B.V. (“NAM”), a company jointly owned by Shell and ExxonMobil, have entered agreements (the “Agreements”) involving cooperation onshore Netherlands concerning eight discoveries and seven exploration prospects.

Under the Agreements, an initial package of up to eight undeveloped oil and gas discoveries will, following NPN’s exercise of an option (“the Option”), be transferred to NPN who will immediately assume operating responsibility after receipt of government approvals. NPN will develop the discoveries and receive 100% pay-back of its cost plus an uplift of 30%, thereafter splitting all future profits equally with NAM.

Six of the discoveries have suspended wells that were successfully tested. The gross in-place volumes are currently estimated at 170 billion cubic feet of gas (53 bcf net to NPN) and 41 million barrels of oil (12.4million barrels net to NPN)

The Agreements further provide for NPN to acquire 50% of NAM’s interests in a number of additional onshore exploration areas where NAM has identified gas prospects. Gross in-place volumes of gas have been estimated at between 0.8 and 1.2 trillion cubic feet, in a total area equivalent to seven UK North Sea Blocks. This is 340bcf to 520bcf net to NPN, allowing for partners, other than NAM, where applicable. NPN will have the right to earn these interests by drilling and covering the combined NAM and NPN expenses of up to seven exploration wells, of which NPN has already committed to one, and will be obligated to an additional two upon exercise of the Option. The Agreement provides for NPN to recover all dry hole costs out of the pre-tax revenues from future discoveries and share the profits from the jointly held stakes with NAM on an equal basis.

Northern welcomes the opportunity to gain a valuable portfolio of discoveries which we would intend to develop quickly together with access to significant exploration potential in what would represent a major new core area for Northern in another EU nation.

The Agreements are subject to normal Government consents save for the already committed exploration well scheduled for 2006.

Derek Musgrove, Managing Director of Northern stated, “Northern has moved to add a major new core area to its business as a low-cost operator and explorer. The fact that these NAM discoveries are potentially ready for development, with wells in place is of great importance to us. Northern’s proven and probable reserves will then increase and the recognised need for production cash-flow may be achieved earlier and with significant cost savings.

We have an outline plan in place for the development of these assets and greatly look forward to working with the Netherlands authorities and people to develop our joint venture projects with NAM over the coming years. Like other Northern areas of operation, the onshore of the Netherlands is environmentally sensitive with special local concerns. We will be working together with all stakeholders to build both a profitable and environmentally friendly oil and gas business, not always at the smaller end of the industry.”

For further information please contact:

Derek Musgrove/Graham Heard
Northern Petroleum
Tel. 020 7743 6080

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