Canadian production and development update

Northern Petroleum Plc

("Northern Petroleum", "the Group" or "the Company")

Canadian production and development update

Northern Petroleum (AIM: NOP), the AIM quoted oil company focusing on production led growth, provides the following update regarding production activities in north west Alberta, Canada.

Highlights

§ The Company is part way through the winter work programme with production currently in excess of 400 barrels of oil per day ("bopd")

§ Further work to be executed during March to add additional 100 to 200 bopd subject to the timing of the arrival of warmer weather

§ Winter programme on track to deliver an average production rate for 2016 of 400 bopd

§ Additional production enhancement opportunities identified

§ Capex costs of programme currently below budget

Keith Bush, Chief Executive Officer, commented:

"The recently acquired Rainbow assets are performing better than expected. We are benefitting from initial high rates of production as wells are restarted and the asset base appears to have plenty of scope to achieve our target of 400 barrels per day for this year and create the foundation for future growth. Increasing the production across the operating platform we have built in Canada will drive down fixed opex and enhance netbacks, providing valuable cashflow for the Group."

Winter work programme

The winter work programme (the "Programme"), targeting the doubling of Group production to 400 bopd, began in late January this year following the completion of the acquisition of the producing assets in northern Alberta (the "Rainbow Assets"). The Programme is focused on restarting wells through the replacement and repair of equipment, storage tanks and pipelines at both the Rainbow Assets and the Company's assets nearby in Virgo (the "Virgo Assets").

To date, the following work has been undertaken:

§ acquisition and testing of the pipeline tie-in from the 15-23 well to the local operator in the Virgo Assets area;

§ reconfiguring of the facilities and pipe work at 15-1 in the Rainbow Assets area; and

§ pressure testing and preparation for the reinstatement of the 9-25 battery in the Rainbow Assets area.

The Company has been working closely with the regulator throughout the Programme to gain the necessary approvals for the reinstatement of lines and wells in order to restart production.

It is anticipated that the 9-25 battery and the majority of the wells tied into that battery will start production later in March. The 9-25 battery also has the benefit of third party tariff income derived from the processing of other operators' production.

The remaining activity of the Programme involves the use of a rod rig and workover rig to change out broken rods and pumps on up to half a dozen wells, which will then be restarted. The amount of wells included in the Programme will depend on the timing of the arrival of warmer weather which brings the break up of the frozen ground, inhibiting the movement of heavy equipment. A further well, 2-12, is also being considered as a start up candidate subject to reconfiguring the facilities at the well head.

The capital cost of the Programme is expected to be within the reduced forecast cost of US$0.6 million. The Company has deposited approximately US$1.3 million with the Alberta Energy Regulator as an abandonment deposit on the closing of the acquisition of the Rainbow Assets. This money will be returned to the Company once the deemed asset value, which is determined using an industry calculated netback multiplied by the last 12 months of production, increases above the deemed abandonment liability. The Company expects the full deposit to be returned during Q3 this year. The capital cost of the Programme and a possible further summer programme will be managed around the timing of the return of the deposit.

Production

All of these wells have an element of oil re-charge following a period of being shut in. The 15-23 well, which produced for less than a month at the beginning of 2015 before being shut in due to problems with the pipeline tie-in, was bought back online at the end of February this year at a rate of 540 bopd with very little water cut. It has now been choked back to produce between 100 and 150 bopd to help minimise water production over time.

The 15-1 well, which has been shut in since 2012, when it was producing approximately 20 bopd, came back into production towards the end of February at almost 400 bopd. It was then shut in following problems with the well head equipment, which were repaired, and is now back in production at a restrained rate of between 100 and 150 bopd, again to minimise water cut in the longer term.

The 13-36 battery continues to produce at approximately 140 bopd from eight tied-in wells. Production from 15-1 and 9-25, once started, will be trucked to the 13-36 battery for processing, water disposal and sale into the Plains Pipeline system.

A priority for the Company is maximising medium term production gains through restricting the initial high rate flush production, which in turn should reduce the rate at which the water cut climbs. This is not as important for those wells directly tied in via pipeline to the 13-36 or 9-25 facilities, since both have water disposal wells. However, increasing water cut from standalone single well batteries means increased trucking costs to transport produced oil and water to the batteries for processing and sale. This is also the case for the 15-23 well where the Company has to pay the third party operator processing fees for water separation and processing. The longer term plan for all wells will be to ensure produced water can be disposed of at minimal cost, allowing these wells to produce oil profitably even when the water cut is in excess of 90 per cent.

-Ends-

For further information please contact:

Northern Petroleum Plc Tel: +44 (0)20 7469 2900

Keith Bush, Chief Executive Officer

Nick Morgan, Finance Director

Stockdale Securities Limited (Nomad and Joint Broker) Tel: +44 (0)20 7601 6100

Alastair Stratton

Robert Finlay

FirstEnergy Capital LLP (Joint Broker) Tel: +44 (0)20 7448 0200

Jonathan Wright

Note to Editors:

Northern Petroleum is an oil and gas company focused on production led growth. The Company is undertaking a redevelopment and production project in north west Alberta and has a broader portfolio of exploration and appraisal opportunities in countries of relatively low political risk, primarily Italy. Comprehensive information on Northern Petroleum and its oil and gas operations, including press releases, annual reports and interim reports are available from Northern Petroleum's website: www.northernpetroleum.com