Northern Petroleum acquires Rockhopper assets in Italy
(ShareCast News) - Oil and gas company Northern Petroleum announced the acquisition of onshore production and development gas assets in Italy on Thursday, from Rockhopper Mediterranean - a wholly owned subsidiary of Rockhopper Exploration.
The AIM-traded firm said the acquisition assets comprised a 100% interest in the Aglavizza production concession, which contained the producing Civita gas field and associated processing facilities and pipeline, a local operations base, and a number of production concessions containing suspended wells, and an exploration permit.
Those production concessions included a 100% interest in the Scanzano Concession, 50% in the Torrente Celone Concession, 60% in Monte Verdese, 85% in San Basile, and a 100% interest in the aforementioned Civita Permit.
Civita, which was tied into the national gas network, was commissioned in late 2015 and averaged gas production of 130 barrels of oil equivalent per day during 2016.
The field was estimated to contain approximately 1 bcf of recoverable gas according to internal estimates, the Northern board reported.
It said it was reviewing the potential for the redevelopment of the Cupoloni field in the Scanzano Concession, and the further subsurface potential of the Vigna Nocelli field in the Torrente Celone concession.
Northern Petroleum would assume the abandonment liabilities of the production concessions, which, excluding Aglavizza and the two fields with redevelopment potential, were estimated to be approximately €3m and forecast to be incurred over the next ten years.
Rockhopper would pay Northern Petroleum $1.6m on completion of the acquisition.
That remained subject to Italian regulatory approval, among other things, and was expected to occur later in the year.
The acquisition had an economic effective date of 1 January 2017.
Revenue and operating profit, excluding intra-group recharges, depreciation and impairment charges, attributable to the acquisition assets for the 12 months ended 31 December 2016 was €1.1m and €0.7m respectively.
The operating profit from the Civita gas field was €0.9m.
"This acquisition is the company's first step into the valuable gas production market in Italy and complements our oil production in Canada," said chief executive Keith Bush.
"The deal is directly in line with our production led growth strategy, allows us to utilise our Italian tax position efficiently and demonstrates our ability to continue to grow production at little or no cost.
"We consider Italy to have further acquisition opportunities for growth and will continue to evaluate additional assets to supplement those acquired today, as we look to build an Italian production and development business."