Northern Petroleum Plc announces that its wholly owned subsidiary, Northern Petroleum (UK) Limited, (“Northern”) and Shell Italia E&P S.p.A (“Shell”) have completed all the conditions under the agreement for the farm out of six of Northern’s offshore Sicily Channel licences in Italy announced on 4th December 2009, namely GR17-NP, GR18-NP, GR19-NP, GR20-NP, GR21-NP, GR22-NP ("Sicily Channel Licences"), to Shell.

Following notification from the Italian authorities the licences are now held:

At completion Shell paid €1.9 million covering all of Northern’s back-costs on these licences. Shell will further pay all costs of the Q4 2008 reprocessing and the Q1 2009 2D seismic programme. Thereafter they will fund all costs of two 3D seismic surveys if proposed by Shell and the optional drilling and testing of a first well.

Northern will remain the Operator during the initial seismic phase and Shell will assume operatorship for the drilling phase.

The Agreement with Shell also envisages that Northern and Shell will hold further discussions on expanding the partnership in Italy.

We are now progressing the winter 2009 2D seismic campaign. Negotiations with the preferred contractor are close to completion following Ministry approval of the programme which will be in conjunction with a second survey over licence CR147-NP in the Italian part of the Oligo-Miocene deposits which are oil producing in production in nearby Tunisian waters.

Derek Musgrove, Managing Director, of Northern Petroleum Plc, stated:

“This concludes the arrangements for Shell to join us as a partner in these offshore Sicily Channel licences. Shell will bring to the project Italian thrust belt mapping and production experience, in addition to its international major project and deepwater expertise. I am sure that the two teams will work well together.

In 2003, we perceived the potential of the thrust belt play in the Sicily Channel and have been working on these licences for several years. The area under licence in the Sicily Channel is 4367 km² (equivalent to about 20 North Sea blocks) and if drilling is successful it could open up a new Western European hydrocarbon province. I note that Northern has reached the stage of recognising mapped un-risked prospective resources at a cost of less than a euro-cent per barrel. The deal with Shell means that the position may now be upgraded to reserves at no overall cost.

This marks the completion of a second Italian deal in recent months further demonstrating the prospectivity of the Group’s Italian licences.”

 In accordance with the AIM Rules – Guidance for Mining and Oil & Gas Companies, the information contained in this announcement has been reviewed and signed off by the Exploration and Technical Director of Northern, Mr Graham Heard CGeol FGS, who has over 30 years experience as a petroleum geologist.

For further information please contact:

Northern Petroleum Plc
Tel: +44 (0) 20 7469 2900
Derek Musgrove, Managing Director
Chris Foss, Finance Director
Graham Heard, Exploration & Technical Director

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