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Northern Petroleum Plc
("Northern" or "the Company")
Southern Adriatic update
· Northern appointed ERC Equipoise Ltd ("ERCE") to conduct a review of the Company's Rovesti and Giove discoveries in the Southern Adriatic Sea, Italy ("the Adriatic Discoveries")
· Interim findings indicate recoverable oil at the Adriatic Discoveries will be classified as 2C contingent resource rather than 2P reserves
· Reclassification of the Adriatic Discoveries will allow the new management to build value through a credible appraisal and development programme
In November 2013 Northern (AIM: NOP) mandated ERCE, the independent reservoir evaluation specialists, to undertake a resources review of the two permits held by the Company offshore Italy in the Southern Adriatic. The permits, F.R39.NP and F.R40.NP, contain the oil discoveries Rovesti and Giove respectively. ERCE has largely completed its work and has presented Northern with an interim report of its findings.
An independent technical review was last conducted on the Adriatic Discoveries in 2007 and ERCE was engaged following the receipt of additional data regarding the Rovesti discovery and recent internal work on both of the Adriatic Discoveries.
In advance of the full report, which is expected to be delivered in the New Year, ERCE has reported interim findings which indicate that the estimated recoverable oil attributable to the Adriatic Discoveries will be classified as 2C contingent resource, not 2P reserves. Northern has historically booked 53.2 million barrels of 2P reserves to the Adriatic Discoveries, based on a report presented by Blackwatch Petroleum Services Limited in 2007. The total net 2C resources attributed to the Adriatic Discoveries by ERCE is 30.2 million barrels, with 25.8 million barrels attributed to the Giove discovery and 4.4 million barrels to the Rovesti discovery. The ERCE letter, setting out the interim findings with associated estimated recoverable volumes, will shortly be available in full on the Company's website.
Northern has also been unofficially informed that the Italian Environmental Minister has requested further information from the Environment Ministry technical committee in relation to the proposed 3D seismic surveys over the Southern Adriatic permits. Northern understands that this request has been made of all outstanding seismic applications in the region, which are unrelated to the Northern permits. Northern will continue to work with the Environment Ministry to obtain the approvals required to shoot the planned 3D seismic.
Keith Bush, Chief Executive Officer of Northern, commented:
"The Southern Adriatic permits have the potential for significant upside value to the Company in the short to medium term. Any work to further our understanding of the geological model or to successfully negotiate the Italian political environment will increase the chance of realising that upside for shareholders. Giove in particular, is a very interesting discovery which will demonstrate its worth through a credible development plan."
In Accordance with 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. He has compiled, read and approved the technical disclosure in this regulatory announcement. The technical disclosure in this announcement complies with the SPE/WPC standard.
For further information please contact:
Northern Petroleum Plc Tel: +44 (0)20 7469 2900
Keith Bush, Chief Executive Officer
Nick Morgan, Finance Director
Graham Heard, Exploration and Technical Director
Westhouse Securities (Nomad and Broker) Tel: +44 (0)20 7601 6100
Richard Baty, Corporate Finance
FTI Consulting Tel: +44 (0)20 7831 3113
Note to Editors:
Northern is an oil and gas company currently holding licences in countries of relatively low political risk and is continuing with its strategy of adding and securing value for shareholders as it enters into projects at all stages of the exploration and production value chain. Comprehensive information on Northern and its oil and gas operations, including press releases, annual reports and interim reports are available from Northern's website: www.northernpetroleum.com.
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