Northern Petroleum

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Northern Petroleum Plc is an oil and gas exploration, development and production company focused on the European Union and nearby areas. The Company is an operator of both onshore and offshore projects including a producing oilfield and boasts a management and technical team of the highest quality.

Northern Petroleum looks to pick up pace of development in Italy and the Netherlands

Friday, June 25, 2010 by Ian Mclelland
company news image Northern Petroleum is looking to speed up development of its vast acreage in Italy and the Netherlands

European focused oil and gas exploration and development company Northern Petroleum (LON:NOP) announced a three pronged plan of action this morning designed to speed up the pace of development of its substantial positions in Italy and the Netherlands.

For much of the past year, the junior oil company’s focus has been directed at its assets in the Netherlands. Since entering the Netherlands six years ago, Northern has added 42.7 million barrels of oil equivalent of net Proven and Probable reserves, placed four gas fields into production and has two oil fields under development. While this is undoubtedly impressive progress, the company now feels the time is right to expand its balance sheet to accelerate the pace of development of its other assets. 

To this end, the company announced this morning that it had opted to divest of its UK operations, which will be handed by marketing company Envoi Limited, and also confirmed that it planned to raise additional capital in the debt markets to accelerate development of its other assets.  

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Northern also confirmed that it had today placed approximately 11.765 million shares at 85 pence raising £10 million (gross).  As of June 23, the company had €13.3 million of cash in hand.

“Northern's focus over a number of years has been on the low cost acquisition of a large number of licence positions in selected low risk countries, successfully acquiring discoveries, other reserves and high impact exploration prospects,” the company summarised this morning. 

This strategy has paid off for Northern Petroleum, but there are still plenty of assets to exploit within the company, including 32 Italian licences and applications which contain approximately 53 million barrels of oil equivalent of net probable oil reserves.

While the company did not specifically state what the new capital would be deployed too, they did state that the main thrust would be to accelerate production rates from existing assets, to increase reserves and to develop existing discoveries.  Some capital will also be deployed to exploration, though Northern did hint that additional farm-out deals would be considered. The Company will also participate in the exploration of a licence in Guyane operated by Tullow Oil (LON:TLW).

"We have outlined our accelerated growth strategy and the Board's plans to finance it. We are pleased to have had a positive reception to our development plans from existing and new institutional shareholders. The strategy to deliver greater growth is clear, as is the case for acceleration across a wider portfolio of projects. Northern will now move forward to take advantage of the very significant opportunities we have created in the last few years. We look forward to implementation of the strategy,”  Chris Foss, Director of Legal and Corporate Affairs, commented.


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Additional Information

Market:AIM
Sector:Energy
EPIC:NOP
Latest Price: 88.50p  (-3.80% Descending)
52-week High:163.00p
52-week Low:84.00p
Market Cap:84.54M

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