For Northern Petroleum (LSE: NOP), it is business as usual. Today the European focused oil and gas exploration and development company announced that it had farmed out three of its Po Valley licences in Italy (Savio, Cerasa and Longastrino), to the Italian subsidiary of Indofin Group ('Indofin').
Indofin is a global investment group with interests in shipping, shipbuilding, energy services, technology, media, natural resources and real estate.
The agreement will see Indofin earn 20% in each licence through payment of back costs to Northern Petroleum and a 'promote' on the first well in each licence. On the Savio and Longastrino licenses, Indofin will pay 40% of the well costs and 30% at Cerasa.
The mean, combined and unrisked Prospective Resources of all mapped prospects in the three licences is 750 billion cubic feet recoverable, the company stated.
The first well will be drilled in the first quarter of 2009 on the Savio licence and will target prospective horizons to a depth of 3270 metres.
Derek Musgrove, Managing Director, stated:
"We are pleased to welcome Indofin as a new partner in three of our Italian
licences. This marks the completion of the first of several deals under
discussion which I believe will demonstrate the prospectivity of the Group's Italian licences. We perceived the potential of the Po Valley ahead of the new climate of gas oil prices and have been progressing these prospects for several years," said Derek Musgrove, Managing Director of Northern Petroleum.
"The introduction of new partners is part of our risk management strategy ahead of production cash flow from the six oil and gas field developments in The Netherlands."