Northern Petroleum offloads High Power assets for $2.5m

Northern Petroleum, an AIM listed oil company focusing production led growth, announced that it has agreed to divest interests in its assets to High Power Petroleum (H2P) for $2.5m.

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The consideration also includes the application of $0.25m of well stimulation services by Blue Spark Energy, an affiliate of H2P based in Canada.

Northern also proposed a share subscription, subject to shareholder approval, to raise gross proceeds of up to £5.1m at 3.5p per share through a first tranche subscription of 124m and a second tranche of up to 20m new ordinary shares, both at issue price.

The total amount realised from the consideration, subscription and open offer will be $9.7m (around £7.8m).

Chief executive Keith Bush said: “The introduction of H2P as a strategic investor at both the asset level and as a corporate shareholder marks a step-change for the company. The investment across the company's asset portfolio validates the strategy we have pursued with production led growth in Canada and the Italian exploration and appraisal portfolio providing the possibility of very large returns in the medium to long term. Not only does H2P bring strong financial support, they provide rigorous technical review and innovative technology to help enhance our asset value.”

The share price fell 4% to 3p at 1204 GMT on Wednesday.