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Northern Petroleum gets backing of major shareholders for funding

Published: 19:56 16 Nov 2015 AEDT

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Assets being bought produce 221 barrels daily at present

Northern Petroleum (LON:NOP) has confirmed the funding to pay for more assets in Northern Alberta in Canada.

Existing shareholders Cavendish Asset Management and City Financial have conditionally agreed to subscribe for £1.2mln worth of shares at 3p per share.

An open offer on the basis of 2 new shares for five existing will raise up to a further £1.2mln.

Last week, Northern Petroleum announced it would acquire assets currently producing around 211 barrels oilhttps://images.intellitxt.com/ast/adTypes/lb_icon1.png equivalent per day - of which 80% is oil – and that have 1.185mln barrels of oil equivalent proved and probable reserves.

A new work programme is envisaged with the aim of doubled the rate of production over the next 12 months.

Northern said that cash flow from the assets would  “broadly cover” all of its general and admin costs at an oil price of US$47 per barrel.

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