6th Apr 2016 07:59
LONDON (Alliance News) - Northern Petroleum PLC said Wednesday the USD1.5 million deposit it paid in January to the Alberta Energy Regulator will be returned, as its assets in Canada continue to perform well and are generating "material monthly revenue" for the company.
Shares in Northern Petroleum were up 20% at 2.70 pence on Wednesday.
Northern Petroluem said the net oil production of its Canada assets in March was 432 barrels of oil per day, which equates to sales for the month of around 13,400 barrels.
The company noted three additional wells were on track to come on-stream in April, following the completion of its workover programme, and said its near-term production will support the return of the USD1.5 million deposit it paid the Alberta Energy Regulator in January.
At the time, Northern Petroleum said it has paid the deposit of around USD1.2 million to the Alberta Energy Regulator, following its acquisition of the assets in Canada, with the deposit representing the cost of the asset abandonment liability netted off against the value of the last 12 months of production, as deemed by the regulator.
The company had said the deposit would be returned once production, and therefore net asset value, increased and, on Wednesday, Northern Petroleum said it will be receiving the funds in three monthly payments starting in June.
Northern Petroleum, following the completion of its winter programme, it will develop a summer work programme for August and September "to achieve further production enhancements and operating cost synergies".
"The Rainbow assets acquired at the beginning of this year continue to perform well and the company is now receiving material monthly revenue from them," said Chief Executive Keith Bush.
"Production engineering and subsurface reviews conducted to date have identified significant opportunities to steadily grow production from this asset base with relatively low capital investment and risk. The company is now focused on developing plans to realise these opportunities," Bush added.
By Hannah Boland; [email protected]; @Hannaheboland
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