Preliminary examination by the directors of Northern Petroleum Plc (AIM:NOP) suggests that proposals as detailed in a posting on the official Ministry of the Environment web-site, attributed to Environment Minister Stefania Prestigiacomo, do not affect Northern’s reported reserves in Italy or the exploration prospectivity of the Southern Adriatic, and has limited or no effect upon most other areas including the West of Sicily Thrust Belt.

The reported initiative to change legislation covers oil activities within five nautical miles of the coastline and hydrocarbon activities within twelve nautical miles of a marine or coastal protected area. The majority of Northern’s permit areas are further offshore.

The specifics of the immediate preliminary review, covering the effects upon the Group’s activities offshore Italy are outlined below.

Southern Adriatic (2 permits, 3 preliminary awards and 4 applications)

The effect is extremely minor in aerial extent and has no effect on established reserves or exploration prospectivity.

West of Sicily Thrust Belt (6 permits, 4 preliminary awards and 1 application)

For the six permit area there is a minor aerial effect upon only one of the six blocks, being the eastern part of G.R20.NP. Further study is required before an assurance can be given to shareholders that it has no effect on any prospects being developed.

The proposals could have effect upon a significant part of two of four applications in the area (d21G.R-.NP & d25G.R-.NP). A more detailed examination is required.

Sicily Channel (2 permits, 2 preliminary awards and 3 applications)

There would be no effect upon permit C.R146.NP and the adjacent application d351C.R-.NP, which contain the very large Vesta prospect.

C.R147.NP, north of Pantelleria Island, would be affected but the initial review concluded that two prospects remain unaffected and only a partial effect applies to three further prospects.

Closer to the coast of Sicily, the Company has four applications. One, d30G.R-.NP, would be entirely unaffected. For another, d358C.R-.EL, on Northern’s interpretation it would appear that the area of greatest interest would not be materially affected and in d29G.R-.NP, it appears that sufficient of the structural lead remains unaffected.

It is clear that d347C.R-.NP will require more detailed review before offering comment.

Ionian Sea (3 preliminary awards and 2 applications)

The greatest effect would be to interests in this area. If introduced the new proposals would rule out most of the area of two preliminary awards d59F.R-.NP & d64F.R-.NP, whereas d77F.R-.NP is entirely unaffected and the effects upon d63F.R-.NP and d75F.R-.NP are considered minor. It may be that upon further consideration a reaction to an oil well blow-out and resultant spill should not apply to gas in the same way.

The Directors advise that previous discussions with The Ministry of Industry and Economic Development had mainly concerned an agreement for a 3 nautical mile limitation, which was accommodated and had little or no effect on the Company’s operations. There has been no prior consultation with the Ministry of Environment on this initiative.

“I believe we are not badly affected save in the Ionian Sea, not our most significant core area. We have always conducted ourselves with due consideration to marine parks, sensitive coastal areas and the environment in general. It is not surprising that the Italian Government would have some reaction to events in the Gulf of Mexico and now we can move forward with their views having been expressed.” commented Derek Musgrove, Managing Director of Northern.

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 35 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, Director of Legal & Corporate Affairs
Graham Heard, Exploration & Technical Director

Cenkos Securities (NOMAD and Joint Broker)
Jon Fitzpatrick, Tel: +44 (0) 20 7397 8900

Jefferies International (Joint Broker)
Tel: +44 (0) 20 7029 8000
Chris Snoxall

Financial Dynamics
Billy Clegg / Edward Westropp
Tel: +44 (0) 20 7318 3113

Bishopsgate Communications
Tel: +44 (0) 20 7562 3350
Nick Rome / Michael Kinirons