25 June 2007
Award of Two Offshore Licences with Three Oil Discoveries
Northern announces that it has been notified of the final award of licences FR.39.NP and FR.40.NP in the southern Adriatic, offshore Italy, (previously d57F.R-.NP and d58F.R-.NP). The licences contain three existing oil discoveries, Giove, Medusa and Rovesti in the Southern Adriatic near the Aquila oil field.
The Giove and Medusa oil and gas discoveries were drilled by Enterprise Oil during a period of low oil prices. These discoveries now require reappraisal in the light of current oil prices and recent advances in development technology.
The two wells, Giove-1 and Giove-2 established a 183 metre, (602 foot), hydrocarbon column with a 92 metre, (302 foot), oil leg of 16° API oil. Analysis at the time estimated the oil in place to be about 180 million barrels.
Work will immediately be undertaken to verify the oil in place volumes and establish the potential reserves of the Giove discovery prior to planning appraisal wells, to be designed as capable of production in a rapid oil development utilising a Floating Production, Storage and Offloading vessel. The nearby Medusa discovery will be considered for a tie back to the Giove facilities.
Independent engineers have been commissioned to review the Giove and Medusa discoveries to verify the reserve potential and the development options. Analysis of the Rovesti oil discovery will follow. Northern Petroleum (UK) Limited holds a 100% interest in the licences but a subsidiary of ATI Oil Plc, in which Northern holds a 37.75% equity interest, has a 50% pari-passu commercial interest in both licences, giving Northern a net beneficial interest of 68.88%.
Derek Musgrove, Managing Director, stated:
“These offshore licences are in a core area for Northern. The Durres Basin extends from southeast Italy across the Adriatic to the oil provinces of Albania and Montenegro. We will now progress with the appraisal of the existing oil discoveries, that have the potential to transform the booked reserves and production revenues of Northern and to work further on the many already mapped leads and prospects that encouraged us to apply for these two and three further applications in the area.
“We expect to be able to progress these first two licences with strategic partners providing technology, drilling and facilities to the project in return for a reduction in our equity or future production share, thereby reducing our equity capital requirements for appraisal and development.
“The awards have been long awaited, but are assets of high potential and so are to be pursued with vigour. I hope that shareholders may appreciate my excitement for a project that has taken over two years to reach this stage. I can now at last say let’s go!”
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
Derek Musgrove, Managing Director
Chris Foss, Finance Director
Graham Heard, Exploration and Technical Director
Tel: +44 (0)20 7743 6080
Investec
Michael Anstell / Paul Brett
Tel: +44 (0)20 7597 5000
Panmure Gordon & Co
Katherine Roe / Ashton Clanfield
Tel: +44 (0)20 7459 3600
Bishopsgate Communications Limited
Maxine Barnes / Nick Rome
Tel: +44 (0) 20 7562 3350
|
