By Alex MacDonald
LONDON--Shares in Northern Petroleum PLC (NOP.LN) rose Thursday
after the U.K.-listed oil and gas firm said it has entered into a
joint venture agreement with oil major Royal Dutch Shell PLC
(RDSB.LN) to explore for oil and gas at Northern's onshore Cascina
Alberto permit in north-west Italy.
Under the terms of the agreement, Northern Petroleum will
transfer an 80% stake in the permit plus operatorship to Shell in
return for $850,000 in cash plus coverage of certain exploration
and development costs.
Shell will be responsible for covering up to $4 million of the
costs related to any seismic research on the permit. The oil major
will also assume responsibility for covering up to $50 million of
the costs associated with any future exploration well.
Shell will also have a pre-emptive right to buy Northern's
remaining interest in the Cascina Alberto permit in the event of
any change in control at the asset or corporate level.
The Cascina Alberto permit was awarded to Northern Petroleum in
July 2014.
At 0856 GMT, Northern Petroleum's shares were up 6.5% at 5.75
pence a share, resulting in a market capitalization of 5 million
pounds ($7.9 million).
The joint venture agreement is subject to approval from Italian
authorities.
Write to Alex MacDonald at alex.macdonald@wsj.com