Northern paid C$250,000 to acquire the assets in Alberta, known as Rainbow, and they saw a 46% reserves uplift.
Reserves overall rose by 30% and consultant McDaniel & Associates puts the total proven plus probable total (2P) now at 1.91mln barrels equivalent with an estimated value of US$23.1mln.
Investors were impressed by the progress sending the shares up by 37% at one point, before they settled back down to a 14% rise to 3.45p.
At that price Northern is valued at £5.3mln
The reserves improvement was after depletion since the last independent audit in 2014 of 155,000 barrels and a 20% drop in the crude price.
Proven or 1P reserves, the most certain category, were 1.3mln barrels.
Progress in a tough environment
Keith Bush, chief executive, said the upgrade reflected progress in an extremely tough operating environment.
“The significant increase in reserves proves the strength of the company's production base even under current market conditions.
“With additional projects identified in the Rainbow and Virgo areas, the improved reserves base will provide the core value necessary for the business to grow."
The Rainbow Area assets are located 15 miles from the group’s prior operations at the Virgo field.
Group production is May and June was around 500 barrels per day and if oil prices hang around US$50 per barrel Bush believes this will give sufficient financial stability to allow time for the group’s high value exploration and appraisal assets in Italy to be progressed.
In 2015, Northern set up a US$0.9mln deal to bring in Shell’s Italian subsidiary for the onshore Cascina Alberto project – which will see Shell ‘carry’ some of NOP's exploration costs.
Costs have tumbled
Higher production levels meant revenues for the six months to June rose sharply to US$1.5mln (H1 2015:US$223,000), while the company also managed to swing to a gross profit of US$95,000 and half its loss before tax to US$1mln.
Admin costs were slashed by 55% compared to last year and now sit at less than US$3mln and the firm still believes that more “material operating cost savings [were] possible”.