Northern Petroleum announces that its wholly owned subsidiary, Northern Petroleum (UK) Limited which is undertaking a three exploration drilling program in the Po Valley region of Italy, has this morning suspended drilling operations in Italy on the Savio 1x site. The well, located in the prolific gas producing area of Emilia Romagna in the Po Basin, encountered thicker than expected sandstone formations but examination of the electric logs suggests that the gas contained in them is insufficient to warrant testing.
The Savio 1x well was Northern's first well drilled in Italy as Operator. The drilling operations are expected to have been performed at less than the budgeted costs even though the well was drilled an extra 280 meters (919 feet) deeper than planned. Planning of the lower risk wells on the Cerasa and Longastrino licenses is in progress.
As announced on October 24, 2008, Northern reduced its business risks and the call upon its cash balances through a farmout agreement with Avobone Italy S.r.l., a member of the Indofin Group. Avobone paid 40% of the well costs; now Northern holds 80% of the license, while Avobone holds 20%.
A subsidiary of ATI Oil Plc currently has a commercial interest equal to half that of Northern. ATI is the subject of an Offer by Northern Petroleum Plc announced on 3rd April 2009.
Derek Musgrove, Managing Director, stated: "The Savio well was the first of Northern's three well program in the Po Valley. Wells on the Cerasa and Longastrino licenses are at the planning design stage. Drilling is also currently under way at Nieuwendijk, which together with Tiendeveen, forms a two well exploration drilling program in the Netherlands quite separate to our six oil and gas field development projects. We must now look forward to short term success in those wells."
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