🕐17.09.13 - 09:00 Uhr

NORTH AMERICAN PETROLEUM: SIGNIFICANT INCREASE IN REVENUES AND RESERVES AFTER AC
QUIRING 28.7% INTEREST IN TWO PRODUCING WELLS IN OKLAHOMA



North American Petroleum Plc/ Index: ISDX / Epic: NAPP / Sector: Oil & Gas 17 September 2013 North American Petroleum Plc (NAP or the Company) Acquires 28.7% Interest in Two Producing Wells in Oklahoma with Significant Development Potential North American Petroleum Plc, a company focussed on developing its interests in proven US onshore oil and gas formations, is pleased to announce it has acquired a 28.7% interest, its largest to date, in two horizontal wells currently producing from the Mississippi Lime formation, Oklahoma (the Acquisition).

The Acquisition is in line with the Companys strategy to rapidly build net production and reserves by acquiring and developing leases in liquids rich hydrocarbon plays. Key Highlights
* 28.7%/21.65% working/net revenue interest acquired in two wells, the Steele and Steinberger, currently producing from the Mississippi Lime, Oklahoma: * Net production of 11.3 boepd (45% oil) attributable to NAP generating approximately US$10,000 net cash flow per month * Combined proved (P1) reserves of 171.6 MBoe for Steele and Steinberger net to NAP with a PV10 of US$6.7m (based on CPR) - provides asset backing * Potential 3-5 times production uplift via low cost development work including fracture stimulation at an estimated net cost of US$126,280 per well * Net leasehold position increased by 92 acres to 584 mineral acres in the Mississippi Lime formation - over 200 potential drilling locations * US$1,025,000 cost of acquisition equates to US$90,932 per boe and US$5.97 per P1 barrel of reserves - compares favourably to average price for similar US onshore transactions * Consideration to be settled via combination of: US$410,000 in cash; US$179,375 via the issue of 11,572,580 New Ordinary Shares in NAP at 1p per share, a 38% premium to current mid-market price of 0.725p; and US$435,625 via a 12 month unsecured promissory note paying interest of 5.25% * Number of wells in which NAP has an interest now stands at 19 - on track to achieve 12 month target of 25 producing wells NAPs Managing Director Stefan Olivier said "We are delivering on our strategy to rapidly grow net production and reserves by building a portfolio of interests in both producing wells and development opportunities in proven US onshore plays.

This acquisition demonstrates our ability to source and secure value accretive projects at attractive prices.

With a number of other exciting acquisitions being actively pursued, we expect to add to the 584 net mineral acres we currently hold in the Mississippi Lime formation and, at the same time, hit our target of having interests in 25 producing wells within 12 months of our IPO.

This acquisition significantly increases NAPs asset backing thanks to the proven reserves of the Steele and Steinberger which have a combined NPV10 of US$6.7 million net to NAP, approximately twice the value of NAPs current market valuation.

We expect the gap between the value of our growing reserves and market capitalisation to close, as we build on the progress made to date and in the process create value for all our shareholders." Further Information The Steele and Steinberger wells are located on the producing Horizon Project in Osage County, Oklahoma.

The Company is acquiring a 28.7%/21.65% working/net revenue interest in the two horizontal wells as well as a salt water disposal well, associated oilfield equipment and 3-D seismic from RiverBend Energy (RBE). Combined, Steele and Steinberger have produced an average 11.3 Boe (45% oil) over the course of the year to date.

Based on the purchase price of US$1,025,000, this equates to US$90,932 per Boe which compares favourably with the median and average for selected US onshore transactions at approximately US$100,000 per daily producing Boe.

The cost per barrel of P1 reserves equates to US$5.97 per barrel which also compares favourably to similar transactions.

The interest in the two wells currently generates about US$10,000 per month in cash flow after royalty, taxes and lease operating expenses net to NAP. Reserves AIM listed Northcote Energy (NCT) holds a 51.75% working interest (WI) and 41.246% net revenue interest (NRI) in the producing Horizon Project in Osage County, Oklahoma, including the Steele and Steinberger wells.

Using the numbers taken from the most recent Moyes & Co.

revision of Northcotes CPR dated 13 March 2013 and adjusting these to take into account the relative NRI of Northcotes current holdings and NAPs holdings, the following is an estimate of the impact of this transaction on NAPs P1 reserves: P1 RESERVES Northcote (NRI 41.246%) NAP (NRI 21.65%) Steele Steinberger Total Steele Steinberger Total Oil (MBbls) 108.0 115.0 223.0 56.7 60.4 117.1 Nat Gas (MMcf) 301.0 322.0 623.0 158.0 169.0 327.0 BOE (Mboe) 158.2 168.7 326.8 83.0 88.5 171.6 P1 PV-10% (US$000s) 6,470 6,294 12,764 3,396 3,304 6,700 Future development potential Both the Steele and Steinberger are horizontal wells.

Laterals have been drilled but to date the wells have not been fracture stimulated.

As a result, there is the opportunity to increase production at both wells via fracking which Northcote estimates could lead to a sustainable uplift in production rates of between three and five times current production levels after a flush period immediately following the completion of fracking.

The estimated gross cost of fracking each well is U$440,000 with NAPs share estimated at US$126,280. Terms of the transaction NAP has agreed to pay RBE US$1,025,000 million for the 28.7% working interest in the Steele and Steinberger wells.

The consideration is to be settled via a combination of cash, equity and a promissory note, the details of which are listed below:
1.

US$410,000 in cash (40% of US$1,025,000) 2.

US$179,375 to be satisfied by the issue of 11,572,580 New Ordinary shares of North American Petroleum plc to be issued at 1p per share, representing a 38% premium to the current mid-market price of 0.725p (17.5% of US$1,025,000).

The New Ordinary shares will be subject to a 12 month lock-in and a further 12 month lock-in subject to NAP being admitted to AIM 3.

US$435,625 to be settled by the issue of a 12 month unsecured promissory note with an interest rate of 5.25% per annum (the initial principle amount being 42.5% of US$1,025,000.

The promissory note will have a 12 month extension subject to NAP being admitted to AIM Glossary P1 means Proved Reserves BOE means barrels of oil equivalent, gas is converted at its energy equivalent of 6000 cubic feet per barrel of oil BOEPD means barrels of oil equivalent per day, BOPD means barrels of oil per day, Abbreviation for barrels of oil per day, a common unit of measurement for volume of crude oil.

The volume of a barrel is equivalent to 42 US gallons M means Thousand MBO means Thousand Barrels of Oil Mcfd means Thousand Cubic Feet per Day MM means million (thousand thousand not million million), as used in oilfield and heat content units such as MMSTB and MMBtu MMBbl means Million barrels MMcfd means Million Cubic Feet per Day Proved Reserves means those quantities of petroleum which, by analysis of geological and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under current economic conditions, operating methods, and government regulation - Proved reserves can be categorized as developed or undeveloped
**ENDS** For further information and the full Admission document visit www.napetroleum.com or contact the following: Stefan Olivier David Coffman North American Petroleum Plc Keith, Bayley, Rogers & Co. +44 (0) 7595 779520 +44 (0) 207 156 5040 Frank Buhagiar St Brides Media and Finance Ltd +44 (0) 20 7236 1177 Lottie Brocklehurst St Brides Media and Finance Ltd +44 (0) 20 7236 1177
Notes North American Petroleum Plc acquires leases in producing onshore US formations such as the Mississippi Lime, Oklahoma, where the application of new techniques and technologies such as horizontal drilling and fracture stimulation can dramatically improve recovery rates.

Revenues generated out of production are reinvested into both new wells and into the acquisition of additional leases to build a portfolio of producing and undeveloped assets focussed on lower risk oil rich plays.

To date, NAP has acquired 584 net mineral acres in the liquids rich Mississippi Lime play and has interests in nine producing wells and a further 10 either drilling or waiting to spud.
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