Northern announces that the Ministerie van Economische Zaken has awarded the Zuid-Friesland III Production License to Nederlandse Aardolie Maatschappij BV ("NAM"), Total, Petro-Canada and Dyas. The license is for a period of 25 years and covers 104.6 km² in the Province of Friesland, The Netherlands.
The license area includes two gas fields; namely Oppenhuizen and Woudsend. Oppenhuizen-1 was drilled in 1972. The well discovered gas in the Zechstein 2 Carbonate and tested initial rates of 400,000 Nm³/d (15 mmscf/d). The well remains suspended. Woudsend-1 was drilled in 1987 and discovered gas in the Zechstein Carbonate but was not tested.
Under separate prior agreements, Northern Petroleum Nederland B.V. will acquire NAM's and Dyas' working interests in the License and assume operatorship. After 40% participation by Energie Beheer Nederland B.V. ("EBN"), NPN's working interest is 44.34%. The transfers are subject to the usual Government consent.
NPN will develop each field according to the agreements and will receive out of cash flow from production 100% pay-back of its costs plus an uplift. After pay-back, operating cash flow will be split between NPN and NAM and Dyas under a profit share arrangement.
The unaudited estimate of the Gas Initially in Place (GIIP) of the two fields is a combined 2.88 BNcm (107 Bscf) with expected recovery factors of the order of 60%.
"Northern is delighted with the announcement of the award of this license with the acquisition of two further field development projects. This represents the results of much ground work by Northern and is a very welcome increase to NPN's growth plans for the onshore Netherlands adding to the two gas fields placed on production in 2009, and the current developments of the Brakel, Ottoland, Papekop and Wijk and Aalburg fields. It is an endorsement of our strategy," commented Derek Musgrove, Managing Director, Northern Petroleum Plc.
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