LONDON -- Northern Petroleum (UK) has farmed out six of its offshore Sicily Channel licenses in Italy (GR17-NP, GR18-NP, GR19-NP, GR20-NP, GR21-NP, GR22-NP) to Shell Italia E&P.
Under the terms of the farm-out agreement, Shell will earn 55% in GR17-NP, GR18-NP, and GR19-NP; and 70% in GR20-NP, GR21-NP, and GR22-NP. Shell will pay 100% of Northern's back-costs ($2.4 million) on the licenses and pay for 100% of the 4Q 2008 reprocessing, the 2008/2009 2D seismic program, and two 3D seismic surveys if proposed by Shell, plus the optional drilling and testing of the first well.
Northern will remain the operator during the initial seismic phase and Shell will assume operatorship for the drilling phase.
The unaudited, mean, combined, and unrisked prospective resources of all mapped prospects in the six licenses from the present limited seismic data base is estimated by Northern at 1.9 Bbbl (100%) recoverable, the companies report.
The transaction is subject to approval by the government and regulatory ministries of Italy.