Northern Petroleum Plc “Northern” announces that in conjunction with partners the Sandhills-2 appraisal well has encountered continuous 100% oil shows over a 62 ft. interval of true vertical thickness with calculated oil saturations up to 38%.

The reservoir formation was intersected at a greater depth than anticipated and is now considered to be within the oil-water transition zone. Calculations made from the electric log data have established a significantly deeper calculated oil-water contact than that previously calculated from the Sandhills-1 well data.

It has been decided to undertake a sidetrack drilling operation, Sandhills-2Z, to drill out from under the 9 5/8 inch casing shoe further to the north towards Sandhills-1 to a location where the main oolitic reservoir unit is projected to be within the oil zone.

The operating programme will be to drill an 8½ inch hole to the top of the Great Oolite formation, set the 7 inch liner casing, change over the mud-system and then to proceed to core the reservoir unit. Testing will take place in the open hole below the 7 inch casing. It is anticipated that these operations will take a further ten to fifteen days.

Following the completion of operations at Sandhills-2Z the rig will be mobilised to the Bouldnor Copse-1 exploration well site further west on the Isle of Wight.

Summary of drilling operations to noon on 21st August 2005

The Sandhills-2 well was drilled to a measured depth of 4185 feet and due to the intersection of the Great Oolite formation at a lower elevation than projected the decision was taken to reserve operational flexibility and not to run a 7 inch liner casing or change the mud-system. These are now available for the drilling of Sandhills-2Z which now has the benefit of being started in open hole.

An attempt was made to core in the open hole but the curvature of the deviated uncased hole proved too great and drilling was recommenced to a final measured depth of 4320 feet following which the well was logged and a velocity check-shot survey taken.

Participants in the Sandhills-2 well are:

For further information, please contact:

Northern Petroleum Plc
Derek Musgrove, Managing Director
Tel: 020 7743 6080

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