By Alex MacDonald 
 

LONDON--Northern Petroleum PLC (NOP.LN) shares fell after the Canada and Italy-focused oil company said it is aiming to restart half its oil production capacity in the second quarter of this year with the remaining to follow if wells can be run viably in a lower-oil price market.

The company's Virgo field in northwest Alberta, Canada, can produce about 500 barrels of oil a day but has been largely shut in over the past two months due to repairs and the need to make some of its wells economically viable. One of the wells, which accounts for a fifth of the field's capacity, needs to dispose of large quantities of water from the reservoir to extract oil, making it tricky to operate viably given the low price of oil.

Northern Petroleum is widening a review of its Virgo acreage to determine how it can economically develop it in a low oil price environment. The review is forecast to conclude in the third quarter of this year.

"The first quarter of 2015 has been spent reorganizing the company and its operations in Canada in response to the prevailing industry environment," said Chief Executive Keith Bush. "With this exercise completed, the focus for 2015 is to increase economic production in Canada and advance all our assets in Italy."

In Italy, the company plans an exploration program at Cascina Alberto following the completion of a stake sale agreement to Royal Dutch Shell PLC (RDSB.LN). Northern Petroleum also said work has started on a joint technical study with Schlumberger AG (SLBS.VI) and GEPlan offshore in the Sicily Channel.

Northern Petroleum also noted that Stewart Gibson is stepping down as non-executive director as part of the company's efforts to significantly reduce overhead costs.

At 0821 GMT, Northern Petroleum's shares were down 13% at 4.25 pence a share, resulting in a market capitalization of 4 million pounds ($6.3 million).

Write to Alex MacDonald at alex.macdonald@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires