Northern Petroleum is an oil and gas company focused on production led growth. The Company is undertaking a redevelopment and production project in north west Alberta and has a broader portfolio of exploration and appraisal opportunities in countries of relatively low political risk, primarily Italy.
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.