Northern Petroleum to buy oil producing assets in Canada

AIM-listed oil and gas company Northern Petroleum said it was buying production wells and facilities in Alberta, Canada for up to $1.1m.

Northern will buy 75% of the assets with its joint venture partner High Power Petroleum buying the remaining 25%.

The assets, within the area of the Northern's Rainbow operations, include six production wells, which were all shut in by the previous operator as they were considered non-core.

Northern aims to bring the first four into production either during the current winter work programme, if weather allows, or as part of a summer scheme, with the remaining two to be considered for production reinstatement later this year.

The first four wells are expected to add a combined initial production rate of 75 barrels of oil per day.

About $700,000 will be paid as a deposit to the Alberta Energy Regulator, which is expected to be returned during the third quarter of 2017 as production increases.

The owner of the assets, a Canadian listed exploration and production company, has waived the Northern’s liability regarding a jointly owned well which will be abandoned, at a net cost to Northern of about $22,500.

Shares in Northern Petroleum were down 3.78% to 4.84p at 0928 GMT.