Northern Petroleum considering sale of operations in the Netherlands

Northern Petroleum has said that as part of a corporate review it may potentially sell its Netherlands asset portfolio.

Northern Petroleum has said that as part of a corporate review it may potentially sell its Netherlands asset portfolio.

The news comes as the company announced plans to enter Canada and upgraded the resource estimate at a prospect in Italy.

Potential sale of operations in the NetherlandsThe group has received a number of expressions of interest in its Netherlands assets and has held extensive negotiations with two parties in exploring ways to achieve the greatest value for shareholders, resulting in two non-binding indicative offers for the UK holding company of the Netherlands subsidiary and one such offer includes the UK assets.

The party with the more attractive offer has requested that at this stage prices in the package not be disclosed until a binding agreement is reached, the group said.

Plans to enter CanadaNorthern Petroleum has initiated a new light oil production redevelopment project in northern Alberta, Canada, and to date has acquired over 5,300 acres, which have the estimated potential to yield in excess of a further one million barrels of extra production from an estimated original 36m barrels of oil in place.

Derek Musgrove, Managing Director of Northern, said: "These new moves are part of the continued implementation of the basic strategy

of the company. They conform to the requirements of a low acquisition cost, the potential addition of material value and consideration of full or partial disposals to finance growth and continuance of activities over the longer term.

"It is a simple understanding that the faster the cycle of investment and return, the greater the corporate growth rate. I know that the board and all shareholders have been disappointed by the pace of progress caused by bureaucracy and restrictions of process. However, I am sure that these new moves will increase activity and aid growth in a timely manner to the benefit of shareholder value."

Resource upgrade in ItalyThe group also announced that the Cygnus prospect offshore Italy has now been mapped as an estimated unrisked prospective resource of up to 790m barrels of recoverable oil within the group's wholly-owned permit.

The prospect is next to a producing oil field, known as Aquila, and has a prospective resource estimate based on Cygnus shares a common oil water contact with this field. Mapping of the available data did not find a barrier between the two areas.

If Cygnus is proven to have the same oil water contact as the Aquila oil field, it is the knowledge of the deeper oil water contact that increases its estimated prospective resource.

The analysis of the data recognised that it is possible for the Aquila field to be in charge communication with the Cygnus prospect and therefore have a common oil water contact with the Aquila field. This results in a high (P10) case of 978m barrels, with 790m barrels in Northern's permit.

A mean prospective resource of 446m barrels has been estimated, of which 401m barrels is within the permit and the remainder beyond the permit boundary.

Derek Musgrove, the Managing Director of Northern, said: "This project is materially valuable to shareholders and our efforts in Italy have now been concentrated upon this. Discussions are currently progressing with major industry partners to join with Northern to drill the prospect.

"The availability of the new Aquila well data has greatly increased our confidence levels in the Cygnus prospect."

The share price fell 6.42% to 09:25.

NR

Recommended

The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves takes a look at the companies with the highest dividend yields in the UK’s blue-chip index
23 Jan 2023
The top ten dividend stocks in the FTSE 250
Share tips

The top ten dividend stocks in the FTSE 250

The average FTSE 250 dividend yield is around 4%, but many stocks yield much more. Rupert Hargreaves picks the best FTSE 250 stocks for income investo…
17 Jan 2023
The top funds to invest in
Funds

The top funds to invest in

As market volatility and recessionary fears continue, here are the most popular funds, stocks and trusts investors are putting their money into accord…
5 Jan 2023
Investing trends to watch out for in 2023: what analysts say
Investment strategy

Investing trends to watch out for in 2023: what analysts say

What are sensible strategies for high inflationary times? We ask analysts to find out.
22 Dec 2022

Most Popular

House prices could fall 30%. Should investors be worried about a repeat of 2008?
Investments

House prices could fall 30%. Should investors be worried about a repeat of 2008?

Some analysts are predicting that house prices could fall as much as 30%, which, when compared to the fact that prices have jumped 28% since April 201…
24 Jan 2023
Will energy prices go down in 2023?
Personal finance

Will energy prices go down in 2023?

Wholesale gas prices are on a downward trajectory, but does this mean lower energy bills later this year?
27 Jan 2023
Council tax increases 2023 – how much more will you pay?
Tax

Council tax increases 2023 – how much more will you pay?

Your council tax bill will go up in April - we reveal the councils that have confirmed what this year’s increase will be.
23 Jan 2023