AIM-listed Northern Petroleum has sold assets to High Power Petroleum (H2P) for a total of $2.75million.
Northern will sell 25% of its Canadian licences, wells and facilities, 25% interest of its onshore Australian licence and 10% of its Italian offshore southern Adriatic exploration permits.
It will receive $2.5million plus $250,000 worth of well stimulation services from an affiliate of H2P.
Northern will also raise £5.1million through a share placing.
H2P, Cavendish Asset Management, City Financial Investment Company and another financial institution have agreed to subscribe for a total of 124million ordinary shares under the first tranche subscription.
Keith Bush, chief executive of Northern Petroleum, said: “The introduction of H2P as a strategic investor at both the asset level and as a corporate shareholder marks a step-change for the company.
“The investment across the company’s asset portfolio validates the strategy we have pursued with production led growth in Canada and the Italian exploration and appraisal portfolio providing the possibility of very large returns in the medium to long term.
“Not only does H2P bring strong financial support, they provide rigorous technical review and innovative technology to help enhance our asset value.”
Scott Aitken, chief executive of H2P, said: “We are very pleased to be partnering with Northern Petroleum across their asset base. Their strategy of building production and cashflow in Canada while maturing exploration and appraisal opportunities in Italy is closely aligned with how we are building our exploration and production operations.
“We believe H2P can add technical expertise along with the potential enhancements of our pulse technology, initially starting with well stimulations in Canada.”
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