Northern Petroleum Increase Reserves Estimate at Rovesti

Two independent petroleum engineering and geological reports by Blackwatch Petroleum Services Limited concerning two of four licences in the southern Adriatic Sea allocate 33.56 million barrels of Probable Recoverable Reserves to the Rovesti discovery. This is in addition to the 19.67 million barrels reported for the Giove discovery and increases the size of the reserves in the region by 170% to 53.23 million barrels, underpinning the importance of the Adriatic Sea to Northern's growth strategy. Northern holds 50% of the licences plus 18.53% beneficial interest via ATI Oil Plc.

The preliminary economic evaluation, included in the report, assuming a $70 per barrel price for Brent crude oil, values the development of the Probable oil reserves at US $349million with a 10% per annum real terms discount rate prior to examining financing options or leasing of the main capital expenditure item.

The second report appraises the combined potential of six drilling prospects to be a mean of 1.26 billion barrels of oil in place rising to a potential of 6.0 billion barrels at a 10% individual probability. All the prospects are within licences F.R39.NP and F.R40.NP, an area of 1470 square kilometers. The report does not cover the preliminarily awarded licences d61FR.NP and d149DR.NP, nor the licence application d60FR.NP with a total further area of 2011 square kilometers.

Using different methodologies, both Northern's in-house calculations and those available from prior work by Enterprise on these six prospects suggest that the upside potential is more than twice as great, at around 3.5 billion barrels of probable reserves.

Part of the 3681 square kilometers area was licensed by Enterprise Oil Plc ('Enterprise') for the twelve years to expiration in 2000 after the Royal Dutch Shell Plc take-over of them. All the prospects were identified by Enterprise, but in a time of very much lower oil pricing and possibly below their economic threshold to progress.

Northern has a 100% interest in the licences, but ATI Oil Plc holds a 50% commercial interest in the project. Northern hold a 37.06% interest in ATI Oil Plc giving rise to Northern holding a 68.53% net beneficial interest and resulting in a net beneficial interest of 23.00 million barrels of the Rovesti discovery and 0.863 to 4.112 billion barrels of prospective oil in place in the six drilling prospects.

The oil at Rovesti is a lighter crude of 25* - 30* API and is deeper than the previously announced Giove discovery, therefore anticipate a higher recovery of oil.

Derek Musgrove, Managing Director of Northern said: 'This now provides independent support to our views as to the immediate reserves and great upside potential of our moves to obtain five licences in the southern Adriatic Sea.

"The Independent report from Blackwatch Petroleum Services Limited values a 68.53% interest in developing the Probable reserves at Giove and Rovesti at about US $411million with a $70 per barrel Brent oil price. These reserves are in addition to Northern's both Proven and Probable Reserves in The Netherlands and the UK, an estimated total of 76.7 million barrels. Northern has 70,794,581 issued shares.

"The FPSOs represent the major part of the capital costs and a leasing arrangement or lease-purchase would be advantageous but are not considered in the economic evaluations.

"I wish to strongly emphasise 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 expected to yield up a considerable number of further sizeable drilling prospects when the whole of the licensed area is examined in this oil and gas rich basin which stretches across to Albania and Montenegro oil fields.

"These fields and prospects now made public are a major addition and strengthening of the Northern assets. The new potential is great and they are drillable now. I also ask shareholders to consider that they are within a proven oil province, they are not in a country of high political risk, nor have logistical and climatic conditions the issues of the South Atlantic or the high latitudes of the North Atlantic.

"In view of weaknesses in the equity markets Northern has already commenced conversations with both downstream companies and marine service companies towards forming arrangements to move forward within current financial resources."


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