Northern Petroleum has received £7 million from Star Energy Group Plc. As a result the sale of its entire interests in the Waalwijk underground gas storage ('UGS') projects to Star, a subsidiary of Petronas International Corporation Limited, for a consideration of up to £10 million, has now become unconditional.
Under the agreement further payments of £2 million and £1 million will be made to Northern upon the Final Investment Decisions ('FID') being taken on the UGS projects in the northern and southern parts of the Waalwijk license respectively.
The sale involves Northern selling its entire shareholding in Gas Storage Limited and Overseas Gas Storage Limited to Star. This transaction has also released Northern from the Euro4.5 million contingent consideration due to Wintershall Noordzee B.V. ('WINZ') under the terms of the agreement with WINZ in the event of FID being made before August 2012 on a UGS project within the Waalwijk license area.
The Group's oil and gas interests within the Waalwijk license area remain unaffected by this transaction.
Chris Foss, Finance Director, commented, "Northern is delighted to have completed the sale of these non-core assets for an up front consideration of £7m. This realizes a significant profit for the Group and further strengthens our balance sheet. This strength should not be underestimated given current economic turmoil."
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