Drilling and production update

Northern Petroleum Plc

("Northern Petroleum" or "the Company")

Drilling and production update

Northern Petroleum, the AIM quoted oil company focusing on production led growth, provides the following update regarding drilling and operational activities in north west Alberta, Canada.

Highlights

Drilling

§ Well 102/11-30, targeting a reef previously undrilled by the Company, was drilled and tested as planned

§ Significant reef section encountered, as forecast from seismic interpretation

§ Two separate zones isolated and tested:

- lower zone water wet

- upper zone produced oil, but with too high a water cut to be economic in the current oil price environment

§ Well suspended for further evaluation

§ Period of subsurface analysis now started to integrate results into Northern Petroleum's understanding of the Keg River play and impact on the Company's development options

Production

§ 102/15-23 well produced intermittently on natural flow during January

§ Pump now being installed to establish stable production, using the service rig from 102/11-30

§ Three other wells which are yet to be tied in have been shut in to release expensive rental equipment

- 16-19 well planned to be brought back into production following the purchase of a production package which is currently under negotiation

- water disposal options being evaluated to bring the two other wells back into economic production

§ Full production update and forecast will be published once these operations are complete, and will include a broader corporate update on other assets and general costs

Keith Bush, Chief Executive Officer, commented:

"This well result means that we will need to re-evaluate our understanding of drainage in the Keg River reefs. However, the well has confirmed our seismic interpretation at the reef edge which is an important step forward in the overall development. Integrating the results of this well and monitoring the performance of the producing wells over a longer period of time will provide a better understanding of how to economically produce the oil held within our acreage.

"The temporary shut in of our first three production wells has been necessary to change the operating cost structure under which they were producing. We believe we've found an economic solution on 16-19 and will continue to work on the other two wells. Maximising the net cashflow contribution from our production will always be a priority. We have seen the start of a reduction in service costs and expect this to continue after the winter drilling season."

Drilling operations

The 102/11-30 well was drilled into a Devonian carbonate Keg River reef, targeting the south west of the structure, down dip from the previously produced zone. The well was drilled to a total measured depth of 1,561 metres and encountered a gross reservoir interval of 41 metres (27 metres net), which was in line with the pre-drill forecast interpreted on seismic. Logging data and down hole pressure analysis was used to identify the most prospective zones for testing.

A liner was cemented in place and two zones within the reservoir were independently perforated, acidised and swabbed. The lower zone was tested first and produced formation brine with traces of oil. The second zone was then perforated and acidised with initial swabbing results showing a declining water cut with increased oil production. However, the water cut stabilised in excess of 85% with a total fluid production rate of approximately 750 barrels per day. The decision was made to cease testing and shut the well in for further evaluation.

Production

The 102/15-23 well, which was tied in before the year end last year, produced under natural flow during January to establish a stabilised production rate. However, due to higher flow line pressures from the 7-34 facility the flow rate was restricted allowing wax to form which inhibited production. The decision to install a pump has been made, using the service rig following the completion of the testing on the 102/11-30 well. Once the well has produced on pump for a sustained period of time, a production forecast of oil and water rates can be more accurately predicted for the year.

The three other producing wells, which are yet to be tied in, have been shut in to release expensive rental production units. The 16-19 well was still producing with minimal water cut and it is planned to bring this back into production following the purchase of a production package with larger tanks which is currently under negotiation, allowing economic production to continue. The well was producing at a rate of approximately 70 barrels of oil per day. The other two wells had combined stable oil production of approximately 110 barrels of oil per day, but their higher water cut means the associated operating cost to truck, process and dispose of the water makes the production uneconomic at these oil prices. Water disposal options will continue to be assessed to allow economic production to recommence from these wells. All three wells suffered downtime in January due to third party operator issues, which the Company has addressed for when production starts up again.

Once these operations have been completed, the Company will release a forecast of the expected production for the near term and further information concerning the Company's other assets and corporate costs.

-Ends-

For further information please contact:

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

Keith Bush, Chief Executive Officer

Nick Morgan, Finance Director

Westhouse 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

David van Erp

Camarco Tel: +44 (0)20 3757 4980

Billy Clegg

Georgia Mann

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