Northern Petroleum inks farm-out agreement with Shell

LONDON -- Northern Petroleum's wholly owned subsidiary, Northern Petroleum (UK) Ltd., has signed a farm-out agreement, which includes the agreed terms of a joint operating agreement, with Shell Italia E&P, a wholly owned subsidiary of Royal Dutch Shell, in respect of its Cascina Alberto permit, which is located onshore, north west Italy.

According to the agreement, Shell will acquire the operatorship and 80% equity interest in the Cascina Alberto permit.

Shell will carry the costs of the exploration campaign, which will include a carry on the acquisition of any new seismic until the seismic costs reach $4 million, and a carry on any exploration well until the well costs reach $50 million. Shell will pay $850,000 in cash on completion.

Shell have a pre-emptive right over the company's remaining interest in the Cascina Alberto permit in the event of any change in control at the asset or corporate level.

Completion is subject to approval of the interest transfer by the Italian regulatory authority.