14 July 2008
Northern Petroleum Plc
("Northern", "the Group", or "the Company")
£10 million deal for sale of interest in Underground Gas Storage Application
Northern Petroleum Plc (AIM:NOP), an oil and gas production, development,
exploration and asset trading company, announces the sale of its entire
interests in the Waalwijk underground gas storage ("UGS") projects to Star
Energy Group Plc ("Star"), a subsidiary of Petronas International Corporation
Limited, for a consideration of up to £10 million. The Group's oil and gas
interests within the Waalwijk licence area remain unaffected by this
transaction.
Northern will receive an initial consideration of £7 million upon completion.
Further payments of £2 million and £1 million will be made upon the Final
Investment Decisions ("FID") being taken on UGS projects in the northern and
southern parts of the Waalwijk licence respectively.
This transaction has also released Northern from the Euro4.5 million contingent
consideration due to Wintershall Noordzee B.V. ("WINZ") under the terms of the
agreement with WINZ in the event of FID being made before August 2012 on a UGS
project within the Waalwijk licence area.
The sale involves Northern selling its entire shareholding in Gas Storage
Limited and Overseas Gas Storage Limited ("OGS") to Star, and replaces the
Heads of Agreement entered in to by Northern and Star on 2 April 2007 for the
sale of OGS. Completion will be achieved when Northern's guarantees to the
Ministry of Economic Affairs are replaced by those of Star.
Derek Musgrove, Managing Director, commented:
"Northern acquired the UGS projects from Wintershall at the time of the purchase
of their interest in the producing gas and condensate field which is still
retained and continues to be managed by Northern. The total purchase price paid
in 2007 by Northern was Euro0.5 million. Last year the free cash flow from gas and
condensate production was Euro1.9 million.With our remaining interest in the
Waalwijk field we look forward to continuing gas production at currently higher
gas prices and progressing with the enhanced condensate recovery project.
"The UGS projects are non-core assets which would not have generated positive cash
flow for five years at the very least and would have required at some point the
diversion and investment of very considerable funds. The profits from the sale
can rapidly be deployed on other projects which we believe have the potential to
generate more substantial gains for shareholders in the short and medium term.We
wish Star and Essent Energy Gas Storage B.V. every success in developing UGS
stores at Waalwijk."
For further information please contact:
Northern Petroleum Plc Tel: +44 (0) 20 7469 2900
Derek Musgrove, Managing Director
Chris Foss, Finance Director
Graham Heard, Exploration & Technical Director
Investec Tel: +44 (0) 20 7597 5000
Michael Ansell / Paul Brett
Panmure Gordon & Co Tel: +44 (0) 20 7459 3600
Ashton Clanfield / Katherine Roe
Bishopsgate Communications (Press) Tel: +44 (0) 20 7562 3350
Nick Rome / Maxine Barnes
Buchanan Communications (Analysts) Tel: +44 (0) 20 7466 5000
Ben Willey / Ben Romney
END
|