Northern Announces Final Results for 2006

Northern Petroleum Plc on Wednesday issued its final results for the year ended December 31, 2006.

Financial highlights:

--Increase in net assets at year end to 24.1 million (2005: 6.1 million) following 20 million placing;
--Cash in hand at year end of 16 million (2005: 1.9 million) plus Standard Bank credit committee approval for project finance and working capital facilities of up to Euro40 million;
--Attributable revenues with effect from January 1 from Waalwijk and P12 gas fields;
--Profitable sale of Waalwijk underground gas storage rights to Star Energy Group Plc;
--Partial sale at a profit of Netherlands onshore assets to Dyas B.V. realizing Euro18 million cash, already in hand, plus producing and development assets;
--Strategic Alliance entered into with Dyas B.V., with Northern to receive Euro 14m by April 30, 2010, with first payment in hand;
--Cash in hand at May 15, 2007, of 26 million;
--Proposals at Annual General Meeting to transfer balance standing to Share Premium Account (18.5 million) to distributable reserves and to make market purchases of up to a maximum of 3.5 million of the Company's own shares.

Operational highlights - 2006:

--Netherlands oil and gas field development projects progressing on a fully funded basis and with key personnel in place;
--Italian activities accelerated through a two license farmout in the Po Valley and offshore Sicily seismic survey during November. Interests in Italy now cover in excess of 12,000 square kilometers.

Operational highlights - 2007:

--Netherlands attributable production of 260.7 million cubic feet of gas and 216 metric tons of condensate for Q1 2007, up on forecast of 240 mcf;
--Development operations have commenced at Ottoland and Brakel;
--A cost-free move into assessing 30 Bcf working volume underground gas storage project at Waalwijk alongside two operators of gas storage facilities in Essent B.V. and Star Energy Group Plc; the license is believed to also contain substantial upside with tested oil in two zones;
--Partial sale of Netherlands onshore assets to Dyas B.V.;
--Strategic Alliance with Dyas B.V. targeting new assets and corporate acquisitions in selected EU countries and elsewhere.


Derek Musgrove, Northern's managing director, stated:

During 2006 and early 2007 the position in The Netherlands was built upon and first production of gas acquired. A start has been made at Brakel and Ottoland on the six field development program, and it is hoped that Papekop development activities will follow next. First production from the developments remains on target for year end 2007 to March 2008.

With the award of the Utrecht Exploration License and the acquisition of interests in the Waalwijk Production License from Wintershall Noordzee B.V. a core area of existing gas production, development, appraisal and exploration has been established in the southwest Netherlands. The award of the Oosterwolde Exploration License and the acquisition of the Dyas interests in gas production from P12 and the two gas discoveries in the Zuid Friesland License have added to our presence elsewhere. The sale of one quarter of our interests in six discoveries currently planned for development at a significant profit has not diminished our ambition, but has provided a new and valued partner, further immediate production revenues and provided funds to increase Northern's rate of progress. With an effective date of January 1, 2007, there will be a net reduction in proven plus probable reserves of 10.41 million barrels of oil equivalence, which are subject to a 50% net profit interest.

In Italy we have continued to expand the portfolio and have under our management the second largest exploration area after Eni. Italy is only now being fully appreciated as having excellent untapped hydrocarbon potential and attractive fiscal terms; the country has a high energy demand and relies on substantial import requirements. This is evidenced by the increased number of license applications and Northern's portfolio has already attracted attention from others.

The multiple billion barrel potential of the licenses offshore Sicily has been enhanced by the 2D seismic survey acquired last November and the license position is attracting the attention of some significant farminees to a Data Room that opened in May 2007.

Whilst we are excited and attracted by the prospectivity of the area which includes a billion barrel potential structure among some twenty others of significance, the risk to expenditure profile taken together with the timing to fruition is not easily compatible with our size of company. A modest amount of money has been expended and a considerable value established. We are now moving to a realization of that value to deploy resources in areas which may sooner be brought to production and with a cost and time frame more comfortable to the Company. Northern is fortunate to be in a project rich position.

The Savio and Longastrino Licenses onshore in the Eastern Po Basin have been farmed out to Stratic Energy Corporation, each on a one well seismic option, and a formal drilling decision is expected in the near future.

The process of final award of licenses previously applied for has continued. The establishment of a new core area in the Durres Basin in the Southern Adriatic has now been achieved, and made public, having a proven petroleum system and three oil discoveries to which probable reserves might soon become attributable.

The assets in Italy are seen as holding the potential to again transform the value of the Company. It is likely that this will be achieved in part through normal industry farmout deals to progress the drilling of licenses in conjunction with drilling selected prospects ourselves.

In the Weald Basin in the south of England progress on permitting two drilling locations continued. Following signing contracts with landowners a planning application has been submitted for Markwell's Wood-1 (50% Northern), projected as an eastern extension of the Horndean oil field. The oil discovery at Avington (5% Northern) awaits the arrival of a new rig and it is expected that the drilling of a production well will be undertaken in the next few months.

By no means least, an international strategic alliance with Dyas has been concluded providing for the companies to work together to identify and pursue new business opportunities in mutually agreed regions of the world with Northern the Operator. This alliance creates further potential for growth.

In summary Northern continues to grow as an energy company focused in the EU with a mix of development projects in The Netherlands that will provide long term production revenues and a core value. Additional value will be realized through the appraisal and development of existing discoveries within the portfolio in Italy and the UK. We intend to expand on these development projects, continuing to add value. There is a realistic large upside in the portfolio of diverse and exciting exploration projects where progress has been made on enhancing the prospects for drilling in The Netherlands, Italy and the UK. Northern Petroleum Plc is an AIM-listed oil and gas production, development and exploration company with core interests under its management in The Netherlands, Italy and the United Kingdom.

Northern is currently embarked upon a program to place two oil fields and four gas fields into production with works on the first two, Ottoland and Brakel starting in March and April 2007.

The Company has recently acquired the management interests in the producing Waalwijk gas field where it intends to implement plans to increase late phase gas, production and move to develop a 30 Bcf underground gas storage facility alongside Star Energy and Essent. The NPN deal with Dyas is the second gas production acquisition in 2007 to date.

The Company has the second-largest exploration position in Italy of licenses under management where activities can be expected to pick-up as the result of the extra funds now available. In addition the Company has announced plans to drill a projected eastward extension of the producing Horndean oil field in West Sussex and another exploration well in the county.


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