looks like its hit oil, don't know whats gonna happen, any idea's ???

There's a good article on Oilbarrel.com as well.

Lemme read it !!

Final results out today. No surprises, which is probably why the SP has dipped, but all in all the news is very encouraging, and if the market were not so nervous at the moment would probably be causing the SP to rise, IMO.


Here's an extract:

Northern Petroleum PLC - Final Results
Embargoed for release: 0700 on 19 June 2006


Northern Petroleum Plc

('Northern' or the 'Company')


Final Results for the Year Ended 31 December 2005

Highlights


On track to achieve gross field production levels of 1,000 bopd and 40MW of
electricity in the next eighteen months


Increase to 60.5 million barrels of oil equivalent in Proven + Probable
reserves


* Through a 19 million (net) fund raising and Standard Bank Plc Credit
Committee approval of project finance facility, the Group is now well
funded to finance the development of six oil and gas fields in the
Netherlands and other projects


* Built major position in Italy, No.2, after ENI/Agip, in permit area under
management with activities set to accelerate in 2006 on a number of
potentially 'company making' prospects


* New UK drilling programme in the Weald Basin


* Profitable sale of Spanish licences and production, with carried interest
retained


Chairman's Statement


I believe Northern Petroleum can now be considered a project rich company. We
are moving forward to develop two oil fields and four gas fields in The
Netherlands to secure what I like to think of as the cash engine for the future
development of our substantial project base of 49 licences and applications in
The Netherlands, the United Kingdom and Italy where we are second only to ENI/
Agip in terms of exploration area under our operations.


Following the award of the Papekop Production Licence on 7th June 2006 the
company's attributable proven plus probable reserves have now increased to 60.5
million barrels of oil equivalence ('boe').


Equal attention should be given to the exploration licence position obtained
through our agreements with Nederlandse Aardolie Maatschappij B.V. ('NAM')
which we anticipate will be supplemented with the success of our three licence
applications. This would create a position of 2,080km in what is the most
southerly part of the North Sea Gas Basin, or approximately 10 UKCS full sized
blocks, in which we have now mapped six prospects.


NAM will be drilling Steenwijk-1, a gas prospect with a gross target of 150-240
Bcf of gas in place in the eastern part of The Netherlands later this year. It
will be a farm-in well under the terms of an agreement with NAM through which
we will earn a 50% net profit interest.


We can now foresee the fulfilment of our ambitious strategy in Italy. When all
the licences are finally gazetted we will have established ourselves as the
second largest exploration company in Italy in terms of licensed area under
management. I ask you to note that most of the licences were selected and
applied for before the recent substantial increases in oil and gas prices. This
is the result of an aggressive strategy to acquire offshore and Po Valley
licences in prospective areas. I expect to provide more news on Italy as field
activity levels increase over the coming year.


Since the end of 2005 we have placed 15,384,616 shares to provide 19 million
net and the Credit Committee of Standard Bank Plc ('Standard Bank') have agreed
the terms of a project finance facility of up to Euro40 million, which will
together finance the cash generating base in the Netherlands and allow us to
move forward in Italy. In the competitive environment driven by higher oil and
gas prices, I am delighted to have succeeded in attracting the highly
experienced staff necessary to manage and execute our ambitions.


It is always a hard decision to sell producing assets but the sale of our
assets in Spain was undertaken to enable our re-deployment into the
Netherlands. This decision was, I believe, correctly taken on the grounds of
the materiality of the added value potential in return for the financial and
human resources deployed. We wish much success to the buyers, particularly as
Northern has retained a 1.25% gross overriding royalty over the three
exploration licences. We also have gained valuable experience during our period
of tenure in Spain and realised a profit on sale of 419,000.


In the South of England activity now moves forward to the Weald Basin where
attributed proven reserves have increased and an appraisal well and one
prospect have been selected for drilling in the next year. One site is the
mapped extension of a producing oil field on a licence in which we hold a 50%
interest. The drilling on the Isle of Wight last year was disappointing for our
hopes in the Wessex Basin. We have absorbed the good points arising from sand
prediction in Bouldnor Copse-1 and issues arising from now presumed
bio-degraded oil at Sandhills. We have also taken note and are proud of the
rapid improvement of drilling cost performance at Bouldnor Copse-1. In the
shorter term the currently suspended Avington-3 well, in which we have a 5%
interest, is to be tested.


Whilst we should all take pleasure in the reporting of the significant proven
plus probable reserve position of 60.5 million boe and look forward to placing
the six fields onshore Netherlands in production, the real significance will be
demonstrated as we build yet further on this income base to develop the
projects that we already have in-hand in what would otherwise be a highly
competitive market.


On the wider front we have been reported as having been recognised by Hemscott
as the best performing Exploration and Production Company on AIM in terms of
total shareholder returns over the three years to 9th May 2006, just before the
subsequent change in market conditions. This progress has been made possible by
the huge efforts over that period of the executive directors, staff and
consultants. I also wish to acknowledge the support of Standard Bank and our
new stockbrokers Investec Securities ('Investec') and Panmure Gordon & Co., who
are achieving an ever wider recognition of Northern throughout the British and
Netherlands financial communities. Of necessity John East & Partners have
passed the role of Nominated Financial Advisor to Investec. They deserve the
thanks of both the Board of Directors and shareholders.

ST, i calculated 1000 bopd at 60 pounds pb0e and the gross revenue came to 16.5 million 19.5 pence per share. On ten times p/e ratio thats 195p.

Of course there is a profit share, but Northern aims to up production to 7000 bopde
eventually which is 7 times 195p on a 10 times ratio.
Take away costs tax and profit share i agree with michael walters that he thinks Northerns medium term worth is 400p per share at least.
We are just in a frustrating market and have to be patient.

Barclay why use 60 pounds pboe?

Barclay, you might need to show me your working before I could agree with those figures (and I agree with Rutherford that one does have to remember to convert US$ to Sterling at some point!). Don't forget that "earnings" in the price/earnings ratio is the expression of profits per share, not turnover.

From 1,000 boepd at US$60 per barrel, I can't find more than about 80p per share at a P/E of 15, and that's using some fairly wild assumptions about profit margins.

Northern is more than likely worth 400p per share, given time, but it'll take more than a couple of thousand bopd to get it there.

All IMO, etc.

I used 60dboe because current world events could see oil going to this price in
the short term, i could l go lower, but because oil production has peaked i thought this long term figure was reasonable.

I multiplied 1000 bopde by 60dollars (sorry my mistake using pounds)
I then used a 5 day week to multiply by this figure, (it could be seven which would change the figures a lot) and then by 52 weeks

this came to 16600000 turnover, because i dont know the exact costs and profit
share i should have halved this amount and divided it by the current market cap which gave 19.5cents, half of 19.5cents per share 9.75 which on p/e ten gives 97.5, but northern will be aiming to do 7000bopde by 2008
so all things being equal 7 times 9.75 = 6.825 dollars=3.61p

Thats on a lower oil price and the figures are very rough and the oil price could be 80 dollars by then, i just thought i'd try to cheer everybody up!

Thanks Barclay - we're cheered :o)

I think you can probably use a seven-day week for the calculation of oil output, as the nodding donkey doesn't get weekends off! I usually use a 360-day year, which is an old habit picked up from how banks calculate interest in certain currencies.

ST, do you think we will get a sp rise in the run up to Avington testing in 3 weeks time.

If testing is positive, this will surely add clout to Northerns assets.

http://northpet.com/news/news-2006/news/26-06-06.html

Good question, Barclay.

NOP's share in Avington isn't huge, only 5%, but it will be a useful addition if hydrocarbons are found. I'm not sure it's big enough to justify a lot of SP increase on pure anticipation, due to NOP's small share. The target is supposed to be 100 million bbl or upwards, which gives NOP 5 million barrels. Give it a net present value of 3 a barrel and that's 15 million; if the market reflects 50% of that value (which is about par for the course at the moment with NOP) you get 7.5 mil, divided by 70 million shares = 10.7p per share.

So on a fair view of current circumstances, the SP might go up 10p on news of success at Avington, maybe more if it gives a reviving kick to an oversold share. I've used a NPV estimate based on $60 oil with a 10% NPV factor; some people might prefer a lower oil price and higher NPV but it doesn't make a huge difference. (if you use $50 oil and 15% NPV factor your NPV/share is 13.4).

If of course the market should come over all bullish again then you'd be talking about a larger increase.

All in all, it's better than nowt, but it's no company-maker. The income from production would be nice though!

all IMO, PDYOR, etc.

Up 5.5p, doing quite nicely. Seems some of my holding is now creeping back up again....

Good news on production front, AFX news says Dutch licences recieved and
oil production could be started sooner than was originally planned.

I hope this news gets norther's share price heading towards a more justifiable value!

I hope we'll get some more detail in due course about how the production prospects have improved. Don't worry, Barclay, the SP will improve in time; I have a feeling that after the summer things might start to pick up.

Look on the bright side - at least we know what a cracking prospect Northern is, and you can't say that about every share.

Lots of takeover rumours going around! How much would you accept?

Anything that will leave me with enough to buy a house after tax!

Seriously, the last NAV of this co was just north of 3 a share. And since I firmly believe that NOP has ten-bagger potential, any T/O price ought to include some sort of a premium to reflect that. The problem is that if share prices are depressed as at present, co's like this one will be going cheap unless a bidding war starts.

I would rather wait and get my ten-bagger if it's all right with everyone. Then maybe I could add a few more shs along the way.

Sorry, let me clarify a little. I think that one day NOP could have a mkt cap in excess of 400 mil. At present, that's around 570p per share. I think 270p would be a reasonable offer for a cards-on-the-table, no-tears takeover if the alternative is a long wait for things to improve SP-wise, but I'm not in the industry and it's not my money. I think I'd feel insulted with much less than 250 though; it would be a pity to see this gem swallowed up by something larger and more pedestrian.

PS - there were takeover rumours in March too. Now it's July. Could just be a case of City boys trying to make their lives more interesting now that the football's over . . .

all IMO, DYOR, etc.

From the 19th June Panmure Gordon research note, produced after the results:

"We maintain our Buy recommendation and 320p price target."

This is already a ten bagger for me as initially bought in at 2.5p then 4p and then again at 4.5p. Obviously before consolidation of 5--1.
I hope a take over does not come off as I believe NOP management will deliver the goods for us all in the longterm and I am certainly in for that.
Although if someone offered me 3.20 pounds today I must be honest and say I would grab it with both hands.
There are other NOP,s out there!
Soultrader I think your market cap for NOP of 400 million in the future is conservative if they get Italy off the ground.
Think we are in for a blue week with NOP!

Good morning Ruthers, fair comment. Although I am reluctant to stick my neck out too far on the potential market cap as it's just too easy to say "This co will be worth a billion . By Christmas," and not have a clue what I am on about, hence my conservatism. JKX is my more or less my benchmark for what NOP could do. Agree that prospects in Italy are potentially very exciting.

Agree soul trader.
JKX are fortunate in that they have a production level of around 12000/day so a bit ahead of NOP and I think we need Italy on the move to reach these kind of figures and also if takeover was to happen it would be given a fair price as right now italy is only potential and gives very little to the share price where-as if it was producing from even one well then the potential of the rest become more real.
I am hoping NOP is my retirement and still have a few years to go so I hope we get to see this one through as I believe it has the most potential and one of the least risky plays in the exploration business.

soul* - not uninteresting though for better or worse a notifiable 48% is held by institutions and NMS is only 10,000 with averdage dealings a bare 500,000 .... indicates a very tight and thus volatile market