London-listed Northern Petroleum has been awarded two permits in Italy and reached a deal to offload its assets in the UK.
The company revealed on Thursday it had been awarded the onshore Cascina Alberto permit in the Po Valley and the offshore C.R149.NP permit in the Sicily Channel.
Cascina Alberto was previously held by Italian giant Eni in the late 1990s under the name Fiume Sesia and contains the Gattinara prospect.
The prospect was interpreted as having similarities in structure to the Villafortuna-Trecate oilfield, which lies 25 kilometres to the south-east.
Northern said it planned to re-evaluate the Gattinara prospect and seek a partner to join in the exploration of the permit to progress the prospect for drilling.
The C.R149.NP permit lies adjacent to Northern’s operated permit C.R146.NP and was applied for in order to encompass an extension of the Vesta prospect within the latter permit.
Northern said it also planned to now seek a partner to participate in the drilling of the Vesta prospect, which it has evaluated to have a larger structure than the Vega oilfield, which lies on trend to the north-east.
"The award of these permits demonstrates that the administration in Italy is now actively progressing with approvals that have been outstanding for some years,” Northern chief executive Keith Bush said.
“The company now looks forward to making progress with other outstanding applications and approvals, especially those in the Southern Adriatic, which we believe hold the greatest potential for the company in Italy."
The news of the award of the Italian permits came the same day the company revealed it had signed sale and purchase agreements with UK Oil & Gas Investments (UKOG) to sell all of its UK licences and assets for £1.5 million ($2.6 million).
UKOG will make a cash payment of £1 million and settle the remainder of the sale price through either cash or the issue of UKOG shares at a price of 1.09 pence per share.
Northern plans to put the funds from the sale towards its Keg River production and redevelopment project in north-west Alberta, Canada.
“The sale of the UK portfolio allows us to focus additional time and financial resource on operations that provide the best opportunity for value growth in a reasonable time frame,” Bush said.
"The Company continues to move forward with its production led growth strategy with operations on the three summer wells in Alberta due to commence in August. We expect the results of the wells to further de-risk the potential of the whole Albertan redevelopment and allow us to achieve our forecast year end exit production rate of 500 barrels of oil per day."
Northern’s UK assets include a 65% stake in a licence off the Isle of Wight, a 50% interest in the Markwells Wood and Baxters Copse discoveries, as well as a 10% and 5% minority interests in the Horndean and Avington producing fields.
Northern’s share of production from the assets in 2013 averaged about 20 barrels of oil per day and accounted for 60,000 barrels of the company’s proven plus probable reserves.
The sale is still subject to the approval of UKOG becoming an operator for certain licences by the UK Department of Energy & Climate Change and the completion of an intra group transfer of certain asset interests within Northern on or before 31 October.