Northern Petroleum PLC Canadian production asset acquisition (7994Y)
March 08 2017 - 1:00AM
UK Regulatory
TIDMNOP
RNS Number : 7994Y
Northern Petroleum PLC
08 March 2017
Northern Petroleum Plc
("Northern Petroleum" or "the Company")
Canadian production asset acquisition
Northern Petroleum (AIM: NOP), the AIM quoted oil and gas
company focusing on production led growth balanced with high impact
exploration and appraisal opportunities, announces that it has
signed an agreement to acquire production wells and facilities
located within the area of the Company's existing Rainbow assets in
Alberta.
The Company will acquire 75 per cent. of the assets with its
joint venture partner, High Power Petroleum LLC ("H2P"), acquiring
the remaining 25 per cent.
Production asset package
-- Six production wells, all shut in by the previous operator
for being non-core
- four wells were shut in during 2015 and the remaining two in 2008 and 2009
-- One water disposal well and injection pump
-- Production facilities including separator, heat treater,
compressor and four 400 barrel storage tanks
- all wells are tied in via pipeline to the production facilities
-- Two additional 750 barrel storage tanks
-- Direct sales and tie-in point to the Plains Midstream
Pipeline network
-- First four wells to be brought into production either during
the current winter work programme, if weather allows, or as part of
a summer work programme
- further two wells to be considered for production reinstatement later in the year
-- First four wells forecast to add a combined initial
production rate of 75 barrels of oil per day
Keith Bush, Chief Executive Officer of Northern Petroleum,
commented:
"This acquisition is a small example of the production
acquisition opportunities available close to the Company's
infrastructure. The additional production will enhance the existing
production base in conjunction with the current work programme and
demonstrates the Company's ability to grow production both
organically and by acquisition.
"We continue to look at further suitable assets in the region,
alongside reviewing more substantial production and development
opportunities in Alberta and Saskatchewan under the terms of our
Area of Mutual Interest Agreement with H2P."
Further Information
The consideration for the acquisition is the assumption of the
abandonment liability of the wells and facilities by Northern
Petroleum. The total undiscounted abandonment liability of the
wells and facilities, as calculated by the Alberta Energy Regulator
("AER"), is approximately US$1.1 million. As a result of the
Licensee Liability Ratio rules the Company expects to deposit
approximately US$0.7 million with the AER, as an abandonment
deposit, which is forecast to be returned during Q3 2017 as
production increases.
In addition, the vendor, a large listed Canadian exploration and
production company, has waived the Company's liability in respect
of a jointly owned well which is soon to be abandoned, at a net
cost to Northern Petroleum of approximately US$22,500.
The processing facilities and sales tie-in point to the Plains
Pipeline system will provide a useful second route to market to the
Company's existing sales tie-in point, and can serve as a backup if
needed.
-Ends-
For further information please contact:
Northern Petroleum Plc Tel: +44 (0)20 7469 2900
Keith Bush, Chief Executive Officer
Nick Morgan, Finance Director
Stockdale Securities Limited (Nomad and Joint Broker) Tel: +44
(0)20 7601 6100
Antonio Bossi
David Coaten
FirstEnergy Capital LLP (Joint Broker) Tel: +44 (0)20 7448
0200
Jonathan Wright
FTI Consulting Tel: +44 (0)20 3727 1000
Edward Westropp
Note to Editors:
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. Comprehensive
information on Northern Petroleum and its oil and gas operations,
including press releases, annual reports and interim reports are
available from Northern Petroleum's website:
www.northernpetroleum.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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