Northern Petroleum firms up Italy potential

Northern Petroleum (LON:NOP) has told investors that the proved and probable (2P) reserves for the Rovesti and Giove discoveries in the southern Adriatic sea will be downgraded to contingent resources.

This comes as NOP’s contractor ERC Equipoise submitted its interim findings of a resources review of the two assets.

The company says it will be able to add value to the discoveries through a credible appraisal and development programme.

"The Southern Adriatic permits have the potential for significant upside value to the company in the short to medium term,” said chief executive Keith Bush.

“Any work to further our understanding of the geological model or to successfully negotiate the Italian political environment will increase the chance of realising that upside for shareholders.

“Giove, in particular, is a very interesting discovery which will demonstrate its worth through a credible development plan."

In 2007, NOP booked 53.2mln barrels of 2P oil reserves for Rovesti and Giove.

Now, ERC estimates a total of 30.2mln contingent resources: 25.8mln at Giove and 4.4mln at Rovesti.

NOP also told investors that it has been unofficially told by the Italian authorities that more information will be needed in relation to permitting for a proposed 3D seismic programme over the two permits.

It says that it understands that this request has been made of all outstanding applications in the area, and it will continue to work with the Environment Ministry to obtain the necessary approvals for the programme.