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Northen Petroleum repositioned after 'pivotal year'

Revenues climbed and losses narrowed while a new investor came on board

picture of oil workers
More produciton expected from Northern this year

Northern Petroleum Plc (LON:NOP) says 2016 was a 'pivotal year' for the AIM-listed oiler, in which it saw revenues climb and losses narrow.

The year saw the group buy production and reserves in Canada, gain a new investor in the shape of  High Power Petroleum LLC (H2P) and attain a stronger balance sheet.

Pre-tax losses for the 12 months to end December were reduced to US$2.5mln (2015: US$10.7mln) on revenues, which were US$3.6mln (2015: US$0.3mln).

WATCH: "A very good year under difficult circumstances" says Northern Petroleum boss

Keith Bush, Northern's chief executive, told investors: "We are now positioned to increase the value of the company in the short term through additional production and in the mid to long term through development of the wider Canadian assets and through exploration and appraisal of the Italian assets."

He told Proactive production should rise to between 500-700 barrels daily by end of the second quarter of 2017 with a further 300 barrels possible from the summer's well workover programme.

NOP appears "remarkably robust"

Brendan Long, analyst at WH Ireland, in a note said: “Having acquired the Rainbow asset when it was producing only 150 boe/d in January 2016 we can only be impressed to see the strong production growth with such limited capital outlays.

“We anticipate costs for the company are largely fixed suggesting increased production will begin to further increase the company’s cash balance. We are taking a believe-it-when-we see-it approach to progress at the company’s Italian assets.

“All in, the company’s trajectory coming out of the downturn is remarkably robust.”

Shares were little changed at 3.85p. 

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