Since NOP's unsuccessful drilling on the Isle of Wight, has anyone any news about forthcoming events as news seems to be very quiet about future drilling prospects.

a2253 put nop in news heading aboVe,they had a news release about italy prospects looks interesting,im out waiting to see if i can catch on a drop.

nd October 2009
Analyst: Thomas Jones
thomas.jones@t1ps.com
020 7562 3371

Northern =2 0 Petroleum* Interim Results Reconfirm Portfolio Wide Progress. Buy with Target Price of 334p.


Key Data


EPIC

NOP
=0 A


Share Price

133.75p


Spread

131p 136.5p


Total no of shares

78,885,326


Market Cap

105.5 million


12 Month Range

53p 141p

Net Cash

28 million (est)

NMS

15,000

Market

AIM

Website

www.northpet.com

Sector

Oil & Gas Producer

Contact

Derek Musgrove, Managing Director, Tel: 020 7743 6080
On the 30th of September, Northern Petroleum released its results for the 6 months to 30th June 2009, with a strong balance sheet backed by operational success across its portfolio the highlights. 20Northern maintains a very positive outlook, with 2013 net production targeted at 6,000 boepd (barrels of oil equivalent per day) as the company looks to complement major development in both Italy and the Netherlands with a material contribution from the UK.
The June 2009 acquisition of the remaining 63% not owned by Northern of ATI Oil Plc, increased Northerns attributable probable oil resources in Italy from 26.61 MMbbl (million barrels of oil) to 53.22 MMbbl and total proven & probable oil equivalent reserves to 103 million barrels. The acquisition made operational and financial sense as it brought all decision making on its previous ATI-Northern JV in-house and avoided the prospect of ATI not being able to fund its development obligations.
The farm-out of six Sicily channel licences to Shell Italia E&P Spa was initiated in January 2009 with Shell paying 1.9 million in back-costs and assuming operational responsibility once the initi al seismic phase is complete and drilling begins. This seismic phase was completed in March 2009 with 2,463 kilometres of data acquired across the 6 licences. With Shell now funding this development, Northern is able to maintain momentum while directing its focus elsewhere.
Part of this focus found a home in the Netherlands with the companys fracturing programme achieving better than expected results, propelling the Grolloo and Geesbrug gas fields to a position of being production ready before the end of this year, and Brakel and Wijk en Aalburg to a similar position in early 2010. Grolloo and Geesbrug are in the process of being tied into their nearby processing facility, while two processing plants are being manufactured in Canada for Brakel and Wijk. Attention will then return to the Ottoland and Papekop oil fields before further drilling is planned at Utrecht.
Back to Italy and Northern was awarded 5 more offshore licences to take its licence holding in th e country to 15,000 square kilometres and, with more applications having been submitted, Northerns acreage is set to grow. This, along with a constructive response from stakeholders in the UK, where production continues at Horndean, and Markwells Wood and Havant are set to be drilled in 2010, means the company is keeping its pipeline full despite the glut of near production licences coming on stream.
Finally Tullow Oil Plc, operator of Northerns 1.25% owned offshore licence in Guyane, is in the process of acquiring 3D seismic data which should reveal drilling targets for follow up work in the hope of replicating Tullows recent success in Ghana and Sierra Leone.
Financially, Northerns revenue remained stable at 2.8 million (2.9 million in the 6 months to 30th June 2008), with a higher average gas price of 42.63 per boe (40.66 in 2008), enough to all but offset the lower average oil price of 48.07 per boe (103 .94 in 2008) and lower production of 61,000 boe (65,000 boe in 2008). A 92% decline in foreign exchange gains (0.15 million vs 1.97 million in 2008) saw the groups pre tax position turn negative with a loss of 0.53 million in the 6 months to 30th June 2009 compared to a profit of 1.68 million in 2008. Consequently, the loss per share was 0.1 Euro cents, down from an earnings per share result of 2.1 Euro cents in 2008. Northern remained debt free and, despite capital expenditure of 10 million in the first half of 2009, retained a net cash position of 27.9 million at the balance sheet date, just below the equivalent figure at 30th June 2008 of 31.4 million.
Having increased our valuation of Northern earlier this year on the back of the ATI transaction, we maintain our target price at 334p for now, but with more licence applications outstanding and exploration happening across its portfolio, there is plenty of upside for new investors. With the company having entered =0 A the FTSE AIM UK50 index on the 11th of August 2009, we reiterate our buy recommendation with 334p target price.




Forecast Table
Year to 31st Dec

Sales ( Million)

Pre-tax Profit ( Million)

Earnings Per Share (cents)

Price Earnings Ratio

Dividends Per Share (p)

Dividend Yield (%)
2007A

5.9

30.1

29.7

5.0

0

0.0
2008A^

7.0

11.6

14.1

10.4

0

0.0
2009E

12.0

6.0

5.4

27.2

0

0.0
2010E

20.0

12.0

11.0

13.4

0

0.0
includes Dyas transaction (Strategic Alliance Agreement)
^Includes sale of Waalwijk underground gas storage ("UGS") projects