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Northcote Energy Ltd is a US focused oil & gas company with a balanced portfolio of new exploration and exploitation opportunities blended with a stable of existing producing wells primed for high impact development. The primary focus is on Mississippi Lime formation in Oklahoma, where new technologies and techniques including...

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Northcote Energy: New Mississippi Lime play makes premium AIM debut

Northcote’s busy work schedule which includes the fracking of up to six already drilled wells this year in Osage County.

Northcote Energy (LON:NCT) shares made a premium AIM debut this morning.

The North America focussed junior is the latest in a number of oil and gas firms with development projects in the Mississippi Lime formation, in Oklahoma.

Fellow Mississippi Lime firm Magnolia Petroleum (LON:MAGP) was a hit with AIM investors in 2012, marking a five-fold increase in value at its peak in November.

Investors have apparently warmed quickly to Northcote also with the group’s shares changing hands at 1.38p each on its debut this morning.

Concurrent with its AIM listing Northcote raised £1mln, issuing 100mln new shares priced at 1p each.

The cash will help support Northcote’s busy work schedule which includes the fracking of up to six already drilled wells this year in Osage County, where it has working interests of 27.9-29.7%.

Northcote already has producing assets, with current output of 26.4 barrels of oil equivalent per day.

It is thought that the planned fracking programme could lift production to around 100 barrels a day.

Additionally, two wells will be drilled on the Layton Sands acreage, while twelve wells will be drilling in Woods County where Northcote has minority stakes.

Through its growth strategy Northcote aims to build a significant presence in the United States.

Chief executive Randall Conally was a strategic advisor to Eagle Energy, which built up a valuable 114 well portfolio before it was the bought out for US$650mln last year in the Mississippi Lime’s first notable mergers & acquisition (M&A) deal.

“With a management team in place that has a proven track record and expertise in sourcing projects, we expect to substantially grow and diversify our asset portfolio and, in the process, generate value for shareholders,” chief executive Randall Conally said in a statement.

"Northcote is a revenue generating, asset backed US onshore oil and gas production company providing an opportunity to invest alongside leading operators including Midstates Petroleum and Chesapeake Energy, in production and development projects located in proven hydrocarbon formations, and, in the process, be a part of the energy revolution currently taking place in US E&P.

"With existing production generating revenues and proven reserves with a net present value of US$33.8m, far exceeding our initial market capitalisation, we believe we have a lot of room to create value for our shareholders.

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