2013 proved to be a busy year for Northern Petroleum, filled with corporate changes and developments including the appointment of Keith Bush as Chief Execuve Officer in July last year and the appointment of Jon Murphy as Chairman later in the year. A restructuring of the board and appointments of two new non-execuve directors marked the significant changes that have turned the company into a more streamlined and efficient business focussed on producon and development acvies. WRITTEN BY DON CAMPBELL INDEPENDENCE AND RELIABILITY www.littlegatepublishing.com NORTHERN PETROLEUM 0207 469 2900 WWW.NORTHPET.COM
Transcript
2013 proved to be a busy year for Northern Petroleum, filled with corporate changes and developments including the appointment of Keith Bush as Chief Executive Officer in July last year and the appointment of Jon Murphy as Chairman later in the year. A restructuring of the board and appointments of two new non-executive directors marked the significant changes that have turned the company into a more streamlined and efficient business focussed on production and development activities.
WRITTEN BY DON CAMPBELL
INDEPENDENCE AND RELIABILITY
www.littlegatepublishing.com
NORTHERN PETROLEUM
0207 469 2900 WWW.NORTHPET.COM
NORTHERN PETROLEUM
“Northern Petroleum owns the interests in operated and non-operated equities in the oil and gas industry all around the world,” Keith
begins, “Our strategic focus is at both ends of the exploration and production spectrum working with higher risk explorations that could yield higher rewards, early stage appraisal projects and lower risk production and development opportunities.”
He goes on to explain that the approach aims to produce a business benefitting from continued growth spurred on by sustainable and ever increasing production levels, while at the same time exposing opportunities to their shareholders.
“Northern Petroleum hold thirty thousand acres of mineral leases in North West Alberta in the Virgo area,” Keith tells us, “This forms the core production and development activity for the company and contains previously produced pinnacle carbonate reefs in the Keg River formation that we believe can be redeveloped to increase oil recovery.”
The land position contains approximately 100 million barrels of oil originally in place, with a recovery factor to date of 18%. The initial aim of the redevelopment is to increase that recovery factor by 5% through the drilling of additional wells but for projects such as this there is always the opportunity for secondary recovery which
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With key assets in Canada where they have an onshore production redevelopment plan with impressive potential for growth and in Italy where an offshore group of permits and applications containing exploration prospects and discovered oil fields, CEO Keith Bush expands upon the story of Northern Petroleum and the plans for the future.
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would further increase the amount of oil produced. Such potential will be evaluated during the initial production period and will depend on the results of intimate research.
In order to test the redevelopment concept, a three well programme was conducted in the first half of 2014. This involved the re-entry of an existing well, the twinning of a new well with an existing one into a reef with a long production history and the drilling of a new well into a virgin reef. Keith reveals that the programme was concluded successfully with approximately 200bopd being produced from two of the wells.
Production from the wells is currently produced through a well test package and being transported to the local pipeline transport network by truck. Further development of the Virgo area will continue and include an additional three well drilling programme in the summer of 2014, “All six wells will then be tied into the existing local infrastructure in the winter of 2014 for long term production,” he reveals, “A future plan of redevelopment across the fields is currently being worked on with the possibility for new tie-in to the local infrastructure and the construction of a new facility.”
As far as exploration and appraisal is concerned, the core area for Northern Petroleum lies in the Italian Southern Adriatic where they own permits and applications which include the likes of the virgin fields of Rovesti and Giove and the Cygnus exploration prospect that has the potential to be transformational. Sitting next to the company’s catalogue of bountiful areas include a 1.4 million acre exploration onshore license in Otway Basin South Australia, a small share of a large exploration offshore license and assets in French Guiana and a small but important amount of onshore production in the Weald Basin in the UK.
Growing The Company Growing The Staff
Keith is quick to mention the people behind the work of his company and how ensuring that all costs go towards adding value to their shareholders is important however recruitment and retention of the right kind of people is even more so, “The Group has twenty seven staff and consultants spanning across the four country locations and the success of the company is entirely dependent on us holding onto the right people.”
Independence and reliability are important to Northern Petroleum and Keith believes in empowering his staff with responsibility and trusting them to complete every task thoroughly, “We employ individuals on the basis of their ability to work with limited supervision on relatively complex projects,” he says, “To support this and ensure that all staff are equipped to do so training programmes are adapted with the individual to allow focused development in the areas that will provide the most benefit to the Company and the employee.”
A higher strategy is being employed here with a focus on
production led growth where employees and encouraged to develop and grow along with Northern Petroleum. The substantial advancements of the company are reliant on the collaborative growth of each and every person involved with the company itself.
“The company is looking to pursue two key areas in 2014,” Keith informs us, “Namely the redevelopment of the Keg River formation of the Virgo area, Alberta and the acquisition of two exploration permits in the Italian southern Adriatic.”
Redeveloping the Keg River will consist of drilling three further wells and the tie-in of a total of six wells to the existing infrastructure. This should allow Northern Petrolem to exit 2014 with a production rate around 500 bopd.
After this work programme is complete the redevelopment will be continued with additional wells from 2016-2018 and possibly longer, Keith explains that various different scenarios are being evaluated for the area which include up to sixty more wells being drilled, “In conjunction with this we have the option of installing additional facilities to connect these wells and this would enable Northern Petroleum to process our own liquids for onward pipeline transportation and reducing our reliance on other companies.”
Concurrently, the acquisition of the 3D seismic in the Italian
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southern Adriatic will allow the progression with exploration and appraisal assets to commence, “The 3D is likely to be a precursor to drilling wells on both the Cygnus prospect and Giove discovery,” he highlights, “Should these wells be successful, the options for development will then be assessed.”
This development does have a longer timeframe than the Canadian development work as the initial wells are not likely to be drilled earlier than 2017. Despite this, Northern Petroleum currently has one hundred percent of these permits and will look to bring in partners, possibly prior to acquiring the seismic and certainly before the wells are drilled.
In conjunction with these two objectives, Keith reveals that the Company will be looking closely at the possibility of a large 100% owned licence in the Otway basin of South Australia. The work programme involves the reprocessing and interpretation of some 2D seismic with a view to establishing the next step required to move forward to a drilling opportunity.
“Again, the Company would look to bring in partners to establish a joint venture and potentially hand the operatorship to another company,” Keith concludes.
The Company will be looking closely at the possibility of a large 100% owned licence in the Otway basin of South Australia. The work programme involves the reprocessing and interpretation of some 2D seismic with a view to establishing the next step required to move forward to a drilling opportunity.
