Giove Prospect Contains 19.67 Million Barrels of Probable Oil Reserves

The Giove, Rovesti and Medusa oil discoveries in the southern Adriatic Sea were drilled back in 1998 by Enterprise Oil and an independent report was produced by Black watch Petroleum. Northern, the 100% license holder has received the first of three independent petroleum engineering reports, that prove at this stage of progress the Giove Project, the reservoir contains 19.67 million barrels of Probable oil reserves.

The preliminary economic evaluation, included in the report, assuming a $60 per barrel price for Brent crude oil and deducting a tariff to allow for the heavy crude, 16* - 20* API, suggests a value of US$177 million for the oil field Probable reserves at a 10% real terms discount rate prior to examining financing options or leasing of the main capital expenditure items.

Northern has a 100% interest in the license, but ATI Oil Plc holds a 50% commercial interest in the project. Northern hold a 37.5% interest in ATI Oil Plc giving rise to Northern holding a 68.75% net beneficial interest and resulting in a net beneficial 13.5 million barrels of the Giove discovery.

Work is now progressing on an examination of Rovesti which is estimated to be of similar size, has a lighter crude of 25* - 30* API and is deeper. Northern therefore anticipate a higher recovery of oil from it, but await the delivery of the commissioned report.

Derek Musgrove, Managing Director of Northern said: 'This is highly satisfactory progress. It is considered that development would be through a sub-sea completion and lifted to a FPSO, as was the case at the nearby Aquila oil field. A maximum production rate of over 23,000 bopd has been projected.

"The FPSO represents the major part of the capital costs and a leasing arrangement or lease-purchase would be advantageous. At this stage the working assumption is that the independent engineering examination of Rovesti will be encouraging and that afterwards consideration will be given to combined development scenarios.

"I wish to emphasize the importance of the Southern Adriatic as a core area for the company. Our ongoing geological and geophysical works using the substantial existing data base are yielding up a considerable number of sizeable drilling prospects in this oil and gas rich basin which stretches across to Albania and Montenegro oil fields."

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