Northern Confirms Oil in Markwells Wood-1 Well

Northern announced that assessment of the logs has confirmed that the entire Great Oolite drilled reservoir sequence in Markwells Wood-1 is oil bearing above the Horndean Field oil water contact of 4446 feet sub-sea level (TVD SS), meeting the primary objective.

The presence of mobile ("live") oil was observed when the 30 feet of core was extracted from the well. Initial analysis of the logs indicate the well, which was deviated at an inclination of approximately 56 degrees through the Great Oolite, penetrated a gross hydrocarbon bearing interval of 275 feet with a calculated net reservoir of 192 feet with an average porosity of 13-14%, a typical porosity value for this reservoir in the nearby fields in the same formation. The top of the Great Oolite was encountered 51 feet low to prognosis and the Great Oolite vertical thickness was 146 feet compared to a prognosis of 240 feet.

The analysis of the core is currently underway and that data will be integrated with the petrophysical evaluation and image logs to design the testing programs.

Testing to establish pressures and flow rates in the existing wellbore will take place when the required services and equipment have been contracted. Testing operations will be conducted utilizing a work-over rig at a lower day rate cost. Analysis of the result will enable the determination of the oil reserve potential and will be the basis for production planning.

Derek Musgrove, Managing Director of Northern, commented, "The Markwells Wood-1 well has to date presented us with encouraging results. An oil bearing sequence has been encountered in the target reservoir adjacent to the producing Horndean oil field within its mapped structural closure. Detailed analysis of the core and logs will provide information on reservoir quality. Expected production rates will be derived from the future test program.

Success at Markwells Wood, helped by current oil prices, should enhance the value of the other undeveloped discoveries and exploration prospects held under license by Northern in the UK."