Northern Petroleum Plc announced that it has entered into a binding sale and purchase agreement with Vermilion Oil & Gas Netherlands BV for the sale of Northern Petroleum Nederland BV (NPN), the company’s wholly owned Netherlands operating subsidiary.
NPN will be picked up by Vermillion for $26.7m, all in cash. The will also receive a net profit interest in the Papekop Production License and a net profit interest over any future production from unconventional reservoirs.
The economic effective date for the transaction is the January 1, 2013. .
NPN produced approximately 95% of the Northern Petroleum’s total revenue of $16.7m for the 12 months ending December 31, 2012.
Following completion, it is expected that the sale will give rise to a book loss in the Group’s consolidated accounts for the year to 31 December 2013.
Keith Bush, Chief Executive Officer of Northern, commented:
“The assets in the Netherlands have served the Group well in providing cash inflow over the last six years, but the time is now right to conclude a sale. The completion of the sale will represent the achievement of the first of three key objectives we set ourselves in August this year. Our attention will now turn to realizing some of the significant latent value held within the Company’s Southern Adriatic licenses and the testing of our redevelopment play in Canada.”