Northern announced an update on its Southern Adriatic permits containing the Rovesti and Giove oil discoveries, which hold a combined 53.2 million barrels of 2P reserves.
Northern has been advised by the Ministry of Economic Development (the "Ministry") that it has approved an increase in the work programs for permits F.R39.NP and F.R40.NP from 300km of 2D seismic to include in addition up to a maximum of 600 sqkm of 3D seismic acquisition on each permit.
The first operation to be conducted under this enhanced work program will be the acquisition of 2D seismic, which Northern has just contracted CGG Veritas Service SA ("CGG Veritas") to undertake. This survey is planned to enable the de-risking of several exploration prospects within the two permits, and compliment the planned 3D seismic acquisition focused on the Rovesti and Giove oil discoveries. Subject to receipt of necessary approvals, the CGG Veritas 2D survey is scheduled to commence in late 3Q/early 4Q 2011.
The Ministry approval allows us to now intensify our planning of the next phase of work on these permits. A 3D seismic survey is scheduled, subject to receipt of necessary approvals, for 4Q 2011 to cover the Rovesti and Giove oil discoveries and is also aimed at the de-risking of one significant prospect within the F.R39.NP and F.R40.NP permits. This 3D seismic acquisition, and the processing of the resultant data, will be the first activity funded entirely by Azimuth Limited ("Azimuth"), a specialist global E&P business, under the terms of the agreement first announced on March 25, 2011.
The Giove and Rovesti oil fields have previously been independently assessed by Blackwatch Petroleum Services to have 53.2 million barrels of 2P oil reserves. In addition, as a result of work undertaken to date, Northern recognizes the potential both for oil prospects with a mean of over 3 billion barrels of oil in place and gas prospects with a mean of over 2 Tcf of gas in place, which is over 1 billion barrels oil equivalent of prospective resource in the two permits, split approximately equally between oil and gas prospects.
Derek Musgrove, Managing Director of Northern, commented, "Exploration of the Southern Adriatic area is a major priority for Northern, so I am delighted to be able to report greater visibility on our forward plans as a consequence of the approval of our enhanced work programs for the F.R39.NP and F.R40.NP permits. CGG Veritas should be commencing a 2D surveying late 3Q/ early 4Q, and we look forward to also firming up the 3D surveys, the first activities with our new partner, Azimuth, within our 2011 program.
"I further note the recent offshore permit award announced by ADX Energy, which after a twelve month hiatus I am hopeful is a positive sign of the start of the award of new offshore permits to both Northern and other applicants."
Aaron D'Este, CEO of Azimuth, commented, "Receiving Ministry approval for the enhanced work program is excellent news. We already know that there is an active petroleum system in the Adriatic basin and 3D seismic is the natural next step to highlight commercial accumulations. Working closely with our partner, we will complete the planned surveys as quickly and safely as possible, and then move on to defining drillable targets early in the New Year."
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