Northern Petroleum confirms that the farm out of the Italian onshore permit, Cascina Alberto, to Shell Italia E&P S.p.A., a wholly owned subsidiary of Royal Dutch Shell PLC, completed on the 7th May 2015.
The Italian regulatory authorities have approved the transfer of 80 per cent of the permit interest to Shell and Shell has paid to Northern Petroleum US$850,000 as agreed under the farm out agreement.
The work programme has started with the re-processing of existing seismic data to determine whether there is a requirement for further seismic acquisition to help delineate a proposed target for an exploration well. Shell will carry Northern Petroleum for the costs of the exploration campaign, which will include a carry on the acquisition of any new seismic until the seismic costs reach US$4 million and a carry on an exploration well until the well costs reach US$50 million.
Keith Bush, Chief Executive Officer, commented,'We are very pleased with the approval of our farm out to Shell by the Italian regulatory authorities. The Cascina Alberto permit provides the opportunity of significant value creation for our shareholders through a carried exploration programme and is just one of the multiple exploration and appraisal opportunities that the Company is progressing within the Italian portfolio.'