Northern Petroleum reported substantial profit on the sale during the year of 25% of the Group's interests in six onshore Netherlands fields to Dyas B.V.
Northern's Netherlands production came in at 0.88 billion cubic feet of gas.
The company increased P2 reserves by 26.5% year on year to 76.55 million boe, a fifth successive year of increase, with reserves now in each of the Group's three core areas.
Independent engineering reports over the Giove and Rovesti discoveries in the Southern Adriatic add 26.61 million of Italian P2 reserves assessed by Blackwatch as having an NPV10 value of $305 million, assuming a $70 per barrel price.
Northern reported that development operations commenced at Ottoland and Brakel.
The company reported progress on 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 Waalwijk license is believed to also contain substantial upside with tested oil in two zones.
A Strategic Alliance has been established with Dyas B.V. targeting new assets and corporate acquisitions in selected EU countries and elsewhere.
Operational highlights - 2008:
--Front End Engineering Design (FEED) studies for all six oil and gas field developments have been completed with the tender packages issued for long lead items. Gross initial production rates in total for the six fields of approximately 3900 barrels of oil equivalent per day (Northern share post Dyas transactions of approximately 1750 barrels of oil equivalent per day) under oil and e-gen development schemes
--Significant increases in initial field production rates to be expected if one or more of the discoveries are developed as gas fields, rather than e-gen, as gas production would not be facilities constrained
--Independent resource evaluation of six of the Company's drilling prospects in the Adriatic Sea, with the combined potential of the prospects assessed at 2.29 billion barrels of oil in place at a P50 probability, rising to a potential of 6.03 billion barrels at a P10 probability
--Negotiations are ongoing with potential downstream companies and marine service companies to progress the appraisal and development of the Rovesti and Giove oil fields in the southern Adriatic
--The Company is working on plans to drill 10 wells across the portfolio in the next 18 months
--Northern's first operated well in Italy will be drilled in the summer of 2008 on the Savio license (mean estimate of 220 bcf of gas in place), on trend to the recent Abbadesse gas discovery. Further wells planned during the next 12 months include Matamata (mean estimate of 1 billion barrels of oil in place), Nieuwendijk (mean estimate of 56 million barrels of oil in place), Tiendeveen (mean estimate of 67 bcf of gas plus condensates in place) and Markwells Wood-1 (mean estimate of 27.5 million barrels of oil in place)
At Avington the Planning Application for the Field Development Plan is with Hampshire County Council with a decision expected to be received in Q2 or Q3 2008. Long term production could commence shortly after receipt of the approvals.
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