Northern Petroleum Increases Italian Portfolio

Northern says that ATI Oil, its joint venture partner in Italy, has received the final decree of the Longastrino license in the Po Valley and the preliminary award of a further three licenses in which Northern also has a 50% interest - Gattinara in the Western Po Valley, and offshore west of Sicily, d347C.R-.NP and d21G.R-.NP.

The Italian authorities have accepted the required environmental impact studies and have issued the final decree of the Longastrino license in the Po Valley in which an ATI subsidiary has a 50% beneficial interest.

In addition, NPUK has been advised of the preliminary award of a further three licenses in which ATI subsidiaries have a 50% interest - Gattinara in the Western Po Valley, and offshore west of Sicily, d347C.R-.NP and d21G.R-.NP. Work on environmental impact studies will be commissioned shortly.

These decrees add to ATI's position in Italy:

Ten licences now granted by full decree:


     License                 Area            License  Interest
                                              Size            
                                                              
Onshore -                                                     
Exploration                                                   
                                                              
Savio                          Po Valley     459 kmē   50.00% 
                                                              
Cerasa                       Adriatic Coast  382 kmē   50.00% 
                                                              
Nibbia                         Po Valley     253 kmē   50.00% 
                                                              
Longastrino                    Po Valley     140 kmē   50.00% 
                                                              
Offshore -                                                    
Exploration                                                   
                                                              
ER.51.NP                      Tiber Delta    724 kmē   50.00% 
                                                              
CR.146.NP                    Sicily Channel  620 kmē   50.00% 
                                                              
CR.147.NP                    Sicily Channel  637 kmē   50.00% 
                                                              
GR.17.NP                     Sicily Channel  709 kmē   50.00% 
                                                              
GR.18.NP                     Sicily Channel  737 kmē   50.00% 
                                                              
GR.19.NP                     Sicily Channel  710 kmē   50.00% 

There are three licences for which the preliminary award has recently been offered subject to submission of acceptable environmental impact assessments:


     License                      Area       License  Interest
                                              Size            
                                                              
Onshore -                                                     
Exploration                                                   
                                                              
Gattinara                      Po Valley     462 kmē   50.00% 
                                                              
Offshore -                                                    
Exploration                                                   
                                                              
d347C.R-.NP                  Sicily Channel  391 kmē   50.00% 
                                                              
d21G.R-.NP                   Sicily Channel  713 kmē   50.00% 

Derek Musgrove, Chairman of ATI, commented:

'The above awards, together with seven license applications (six uncontested) that came before the Italian Hydrocarbon licensing committee for consideration in December 2005, essentially complete the building of Northern and ATI's asset base in Italy.

This significant position has been built over a three and a half year period is demonstrative of the substantial and valuable lead time we now have over our competitors. For the main, it has been put together during a period of low oil prices, allowing us to, to an unusual extent, 'cherry pick' outside the Po Valley Basin region.

The objective has been to identify both old discoveries of oil and gas considered ripe for re-appraisal and highly prospective mainly offshore areas to which we will be the first group to deploy new technologies now available after a hiatus of exploration activity during the times of low oil prices.

The interesting and exciting exceptions are in the southern Adriatic and Ionian Sea where we will be progressing one gas and two oil discoveries made during those times of low oil prices and where the licences subsequently expired or were relinquished. Here we believe that we may benefit from the fundamental change in economics. The Company will comment further when these licences are formally granted.

Onshore ATI believes it will additionally benefit from the deregulation of the Italian gas and electricity markets.'

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