4th Dec 2008 07:00
Embargoed for release: 0700 on 04 December 2008
Northern Petroleum Plc ("Northern" or "the Company") Operations Update - The Netherlands
Northern is pleased to provide shareholders with the following update on its operations in The Netherlands.
Andel III
The wholly owned subsidiary, Northern Petroleum Nederland B.V. ("NPN"), has been advised by the Ministerie van Economische Zaken ("the Ministry") that there will be a 40% State participation by EBN in the Andel III Production Licence ("Andel III"). The Andel III licence will run for 30 years from 19th November 2008. Such participation by EBN will be on the basis of being a fully paying partner in all respects from notification, and payment of applicable back costs, including their pro rata share of the costs of Ottoland 1z well drilled during the second quarter of 2007.
As anticipated NPN will now hold a 45% interest in Andel III, with Dyas B.V. holding the remaining 15%. These revised interests are in full alignment with the existing joint ventures at Papekop, Drenthe III and Drenthe IV. The entry of EBN into these projects has no impact on Northern's declared reserves, as these have always been prepared on the working assumption that EBN would participate in Andel III.
The Andel III licence contains the Brakel, Ottoland and Wijk en Aalburg fields that Northern secured under the terms of its 2005 agreements with NAM. It also contains the Nieuwendijk exploration prospect, targeting 56 million barrels of oil in place, which is planned to drill in the first quarter of 2009.
Operations towards production
The well service programme commenced ahead of schedule in late October and operations have been successfully completed at both Wijk en Aalburg and Brakel. The workover rig is currently at the Grolloo location.
Operations to fracture the reservoir at Wijk en Aalburg, commenced on 1st December. The frac operation has been successfully completed and the well is being cleaned up prior to flow testing.
The five well frac programme has been designed to determine the possibility of increasing the planned initial production rates and the results will be used to form the basis of gas and oil sales contracts.
Standard Bank
It has become clear the credit facility between NPN and Standard Bank Plc announced in March 2006, which NPN has yet to draw upon nor planned to until well into 2009, is no longer practical or essential. Northern has a strong cash position and is debt free.
The change of several field development project structures from electricity sales to gas sales to increase profitability has altered the security profiles for the projects. Both companies are working together on a replacement facility to be in place prior to significant field development expenditures being incurred.
Derek Musgrove, Managing Director, commented:
"Northern is delighted that EBN will be a partner in the Andel III licence and thereby the three field developments at Brakel, Ottoland and Wijk en Aalburg."
For further information please contact:
Northern Petroleum Plc Tel: +44 (0) 20 7469 2900
Derek Musgrove, Managing Director
Chris Foss, Finance Director
Graham Heard, Exploration & Technical Director
Investec Tel: +44 (0) 20 7597 5000Michael Ansell / Patrick RobbBlue Oar Tel: +44 (0) 20 7448 4400Jerry KeenBishopsgate Communications (Press) Tel: +44 (0) 20 7562 3350
Nick Rome / Maxine Barnes
Buchanan Communications (Analysts) Tel: +44 (0) 20 7562 3350Tim Thompson / Ben RomneyNotes to Editors:
Northern has recoverable Proven and Probable reserves of 76.5 million barrels of oil equivalence.
It is the Netherland's second largest onshore oil company in terms of oil and gas reserves, 45.5 million boe recoverable. It is currently producing gas at Waalwijk and the offshore P12 fields. The planned development of six onshore oil and gas fields is being progressed through the Netherlands authorisation and planning processes. Partners in these projects include Dyas B.V., EBN and NAM (the joint Shell ExxonMobil company). Northern recently sold its interest in the Waalwijk UGS application for an overall consideration of ‚£10 million.
Northern manages the largest licensed exploration area in Italy, over 13,000 km ‚², predominantly offshore but includes seven licences in the Po Valley oil and gas province in the north of the country where the drilling of the Savio 220 bcf gas prospect is being progressed. Through its holdings in licences in the southern Adriatic covering the Rovesti and Giove oil discoveries it has net Probable oil reserves independently assessed at 26.6 million barrels recoverable.
Northern is also a significant holder of licences in the south of England where it has a 10% interest in the production from the Horndean oil field and a 5% interest in the Avington development.
Further information on Northern is available at www.northpet.com.
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