Additional Information
Market: AIM
Sector: Oil & Gas Exploration & Production
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Northern Petroleum

Northern Petroleum Plc is an AIM quoted exploration and production company which is undergoing change to realise the significant latent value from its existing assets. The  Company  owns  both  operated  and  non-operated  equity interests  in oil  and  gas  licences around  the  world.  The  strategic  focus  for  the  business  is  at  both  ends  of the  exploration  and production  spectrum,  i.e.  higher  risk  and  higher  reward  exploration  and  early  stage appraisal  projects,  as  well  as lower  risk  production  and  development  opportunities.  This  approach  aims  to produce  a  growing  business  with sustainable  and  increasing  levels  of  production,  as  well  as  providing  share holders  with  exposure  to  potentially significant  value  enhancing  events  through  exploration  and  appraisal opportunities.  The  geographic  focus  for  the Group  is  in  countries  of  relatively  low  political  risk

Northern Petroleum farms out La Tosca prospect to Orca Exploration

8th Dec 2010, 12:40 pm
Northern Petroleum farms out La Tosca prospect to Orca Exploration

Northern Petroleum (LON:NOP) has agreed to farm out the Longastrino Permit in the eastern part of the Po Valley Basin, onshore Italy, in a deal with Orca Exploration (TSX-V:ORC).

Longastrino’s main target is the La Tosca prospect, which is just 2 kilometres away from the Alfonsine gas field.

"We are delighted to welcome Orca as a new partner and to this permit,” NOP director Graham Heard said.

“This third farm-out in Italy is part of Northern's ongoing farm-out campaign which to date has involved eight permits. We look forward to further farm-outs."

Initially Orca will earn a 70 percent stake in the permit by drilling the first well, at a cost of up to €4.3 million. It can then earn a further 5 percent when the well is flow tested and completed, with costs up to €1.3 million.

Once it has taken the full 75 percent stake it will also have to pay back costs of €0.6 million to NOP.

"Orca is delighted to be partnering with Northern Petroleum drilling the La Tosca well,” Orca chairman and chief executive David Lyons said.

“We see this as a low risk exploration opportunity in a proven hydrocarbon basin with significant upside potential,

“This acquisition is Orca's second entry into Italy which we believe has substantial reserves and has been overlooked by the major players."

Drilling is expected to get underway in 2011. La Tosca-1 will be drilled to around 2,500 metres. 

NOP estimates that La Tosca has 45 billion cubic feet of gross mean prospective resources, based on 3D seismic. And NOP said that drilling on La Tosca will target the upside to this resource - 85 billion cubic feet gross prospective gas resources.

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