Northern Extends Loan Facility to ATI Oil
Northern has signed a further addendum to the loan agreement with ATI Oil Plc (ATI) dated October 30, 2006. All funds drawn down under the terms of the facility will now become repayable to Northern in full on or before December 31, 2008, a seven month extension. All other terms and conditions of the original loan agreement remain in force. This extension has been granted to provide time for current discussions with third parties to continue towards conclusion in an orderly manner.
The facility is secured over certain of ATI's assets, including its 50% interests (Northern 50% and operator) in the FR.39.NP and FR.40.NP licenses in the southern Adriatic, which contain the Rovesti and Giove oil discoveries, which have recently been assessed by independent consultants as having 53.23 million barrels of P2 reserves, suggesting NPV10 values for the two fields of US$610 million (US$305 million net to each of Northern and ATI) at US$70 Brent. An independent resource evaluation of six of the Company's drilling prospects in these Adriatic Sea licenses has also been completed, 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.
Every well drilled to date within the area licensed by Northern and the adjoining Eni production license has discovered hydrocarbons.
Northern currently has a 37.05% shareholding in ATI. Derek Musgrove and Chris Foss, directors of Northern, are also directors of ATI. The Directors of Northern who are independent of ATI, having consulted with Northern's nominated adviser, Investec, consider the provision and terms of the extension of the facility to be fair and reasonable insofar as Northern's shareholders are concerned.
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Company: ATI Oil PLC more info
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