Northern Petroleum has initiated a revised growth strategy to accelerate its activity level in the development of its large asset position which is predominantly in Italy and The Netherlands. This acceleration of activities requires access to additional funds.

At 23 June 2010 the Company had approximately EUR13.3 million of cash in the bank and is generating revenues from its existing production. In order to accelerate development and capitalise on its asset position, the Company has decided to raise new funds from three sources:

Realisation of value from the sale of the non-core UK assets; Reserve based debt finance secured against production in the Netherlands; and Placing of a modest amount of new equity, £10 million. The Company has instructed Envoi Limited to handle the process of selling its non-core UK assets. Envoi Limited is a UK company which provides specialist marketing, acquisition and advisory services to the international upstream oil and gas industry.

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. Northern entered the Netherlands in 2004 to acquire licences with undeveloped discoveries. Northern has had significant success with the Company now having net Proven and Probable reserves in The Netherlands of 42.7 million barrels of oil equivalent (boe), with four gas fields in production and two gas and two oil fields in development. In Italy a strategy of identifying and acquiring key licences in prospective core areas was successfully pursued, ahead of the majority of other oil companies. Currently, Northern has 53.2 million boe of net Probable oil reserves from 32 Italian licences and applications beyond contest. In the UK, since 2003, Northern has accumulated total net Proven and Probable reserves of 7.0 million boe. The UK and Netherlands reserves have been independently assessed by RPS Energy and the Italian reserves independently assessed by Blackwatch Petroleum Services.

Tags: Northern Petroleum