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NORTHCOTE ENERGY LIMITED: 40% Increase in Value of Total Net Proved Reserves

NORTHCOTE ENERGY LIMITED: 40% Increase in Value of Total Net Proved Reserves Northcote Energy Ltd / Index: AIM / Epic: NCT / ISIN: VGG6622A1057 /

                              Sector: Oil & Gas

28 February 2013
             Northcote Energy Ltd (`Northcote' or `the Company')
        40% Increase in Value of Total Net Proved Reserves to US$47.5m

Northcote (AIM: NCT), an onshore US oil and gas exploration and production
company, is pleased to report the findings of a revision to the Competent
Person's Report dated 20 December 2012 by Moyes & Co. which confirms a 40%
increase in the value of Northcote's net attributable proved reserves from
US$33.8 million to US$47.6 million. The reserves upgrade follows the exercise
of two of the Company's options to acquire an additional 10% working interest
(the `Horizon Option') to an average 37.5% and an average 2.2% royalty
interest (the `WCR Royalty Option') in the Horizon Project in Osage County,
Oklahoma (`Horizon' or `the Project').

Key Highlights

- US$13.7 million increase in value of net attributable proved
reserves to US$47.6 million following completion of the acquisition of Horizon
and WCR Royalty Options

- Based on upgraded net attributable oil and condensate proved reserves of 914
Mbbl and net attributable gas proved reserves of 2,376 MMcf

- Further growth potential through exercise of additional option to
increase working interest in Horizon by 8.33% to an average of 45.83%

- Expected increase in net production and reserves as a result of
larger exposure to recently initiated workover and imminent fracture
stimulation programmes at the Horizon Project

Northcote's Chief Executive Officer Randy Connally said, "Within weeks of our
Admission to AIM in January 2013, we have already increased the value of our
net proved reserves by almost half to US$47.6m. As a result, we have
substantially increased the asset backing of the Company, which remains
considerably higher than our current market valuation. There is another option
in place to increase our interest in Horizon by a further 8.33% which, subject
to being exercised, should also result in a significant increase in net
reserves and underlying value.

"With the fracture stimulation programme due to commence shortly and the
workover operations that are currently underway on four producing wells at
Horizon, where we have already seen a small increase in net production at one
of these, we are highly confident that we will deliver a substantial increase
on our production by the end of 2013. With all this activity in mind, we hope
to maintain the excellent momentum behind the Company since Admission."

Reserves and Resources

The following has been extracted from Moyes & Co's Revision Letter dated 20
February 2013*:

Northcote has exercised two option agreements effective 1 March 2013 allowing
for the acquisition of additional working, revenue, and override interests in
Osage County in the amount of a 10.00%/7.50% working/revenue interest and in
the amount of a 2.20% (average) overriding royalty interest in the nine leases
in Osage County producing from the Mississippian formation. These increased
interests are outlined in Table 1.

Ownership As of November 1, 2012 Ownership As of March 1, 2013




Big Hill 27.875000 20.906250 0.000000 37.875000 28.406250 2.227500 30.633750 1H-12

Big Hill 2H 27.875000 20.906250 0.000000 37.875000 28.406250 2.227500 30.633750 & 4H-12

Little Drum 27.875000 20.906250 0.000000 37.875000 28.406250 2.227500 30.633750 & Sarah (MS1)

Steele 27.875000 20.906250 0.000000 37.875000 28.406250 2.227500 30.633750 2-11H

Steinberger 27.875000 20.906250 0.000000 37.875000 28.406250 2.227500 30.633750 1H-10

West Little 29.937500 22.453125 0.000000 39.937500 29.953125 2.103000 32.056125 Drum & Lauren (MS 2)

Table 1 - Northcote's increased interest in the Osage wells.

The additional interests acquired by Northcote will increase their NPV10 in the Osage wells from US$28.74 million to US$42.50 million. These figures are representative of the proved producing properties plus their respective behind pipe reserves. These wells have water fracture treatments planned throughout 2013 and 2014 that will significantly increase production accounted for in the behind pipe category.

Northcote holds another option agreement allowing for the acquisition of up to an additional 8.33% working interest in the nine leases in Osage County producing from the Mississippian.

Detailed below are the updated tables from the Moyes Revision letter dated 20 February 2013 that show the updated reserve and cash flow summaries including all properties on Osage and Woods County:

                                 As of November 1, 2012
                 Gross Reserves      Net Reserves               Net Cash Flow

Reserve Class/Category

Oil & Natural Oil & Natural Future Future Future Future NPV

Condensate Gas Condensate Gas Net Net Net Net Disc @

(Mbbl) (MMcf) (Mbbl) (MMcf) Revenue OPEX & Capital Cash 10%

($000) Taxes ($000) Flow ($000)

($000) ($000)

Proved 417 1,411 33 146 3,507 1,920 - 1,587 1,035 Developed Producing

Proved 2,491 6,573 769 2,029 76,907 10,218 1,430 62,259 42,129 Developed Behind Pipe

Proved Shut In 300 944 1 2 57 8 - 48 33

Proved 3,464 9,830 111 199 10,625 1,587 949 8,089 4,359 Undeveloped

Total Proved 6,671 18,757 914 2,376 91,096 13,733 2,379 74,983 47,556

Probable - - - - - - - -

- Behind Pipe

Probable 1,800 5,366 3 8 259 38 41 179 102 Undeveloped

Total Probable 1,800 5,366 3 8 259 38 41 179 102

Total 2P 8,471 24,124 916 2,384 91,354 13,771 2,421 75,162 47,658

Possible - - - - - - - -

- Behind Pipe

Possible 2,100 6,210 3 9 300 44 48 208 117 Undeveloped

Total Possible 2,100 6,210 3 9 300 44 48 208 117

Total 3P 10,571 30,334 919 2,392 91,654 13,815 2,469 75,370 47,775

All reserve estimates have been prepared using standard engineering practices generally accepted by the petroleum industry and conform to the guidelines adopted by the Society of Petroleum Engineers.

All of the technical information, including information in relation to reserves and resources that is contained in this announcement has been reviewed internally by the Company's Technical Director, Mr. Kevin Green. Mr. Kevin Green is a Petroleum Geologist who is a suitably qualified person with over 30 years' experience in assessing hydrocarbon reserves and has reviewed the release and consents to the inclusion of the technical information.

* The revision to Northcote's net reserve P1 PV10 is based solely on the increase in the Company's interest in the Horizon Project following the exercise of the Horizon Option and the WCR Royalty Option. All other inputs remain the same as at the time of the original report dated 20 December 2012.


For further information and the full Admission document visit, see below or contact the following:

Randy Connally Northcote Energy Ltd +01 214 675 7579 Ross Warner Northcote Energy Ltd +44 7760 487 769 Dan Jorgensen Northcote Energy Ltd +44 (0) 20 7024 8395 Roland Cornish Beaumont Cornish Ltd +44 (0) 20 7628 3396 James Biddle Beaumont Cornish Ltd +44 (0) 20 7628 3396 Jerry Keen Shore Capital Stockbrokers +44 (0) 20 7408 4090

Limited Bidhi Bhoma Shore Capital Stockbrokers +44 (0) 20 7408 4090

Limited Hugo de Salis St Brides Media and Finance +44 (0) 20 7236 1177

Ltd Elisabeth Cowell St Brides Media and Finance +44 (0) 20 7236 1177

Ltd Notes:

Northcote Energy Ltd is a revenue generative US onshore oil and gas production company focussed on the rapidly emerging Mississippi Lime formation in Oklahoma. The Company participates with leading operators, including Midstates Petroleum and Chesapeake Energy, in low risk development plays where advanced techniques, such as horizontal drilling and fracking, are used to unlock known oil accumulations and dramatically improve recovery rates. Management is focused on increasing production through a multi-well drilling and fracking campaign in 2013.

The Horizon Project, Osage County Oklahoma

Northcote's interests in Osage County comprise working interests in 10 producing wells, of which nine are unfracked horizontal wells producing from the Mississippian formation and one is a vertical well producing from the shallower Layton formation (Burkhart #3).

The workover programme was initiated based on evaluation of wells and bottomhole pressure tests run in December 2012 in preparation for the fracture stimulation programme. As part of the evaluation of wells, it was determined that Northcote could materially increase production from wells that were not part of the planned four well fracture stimulation programme through a workover programme that consisted of, depending on the well, re-acidizing, pumping down fluid levels and in some cases installing larger submersible pumps.

Northcote intends to utilise hydraulic fracturing techniques in relation to the unfracked horizontal wells. Hydraulic fracturing (`fracking') is the primary choice for enhancing production, and typically has the effect of increasing productivity 2 to 20 times compared to an untreated well, by increasing the amount of contact that the well bore has with high quality reservoir rock.

The Company has commenced an evaluation of a number of low cost opportunities to develop other prospective formations on Northcote's existing lease portfolio and other properties. As with the successfully producing vertical Burkhart #3 well, new well opportunities are targeted based on information obtained through the on-going Mississippian programme and are undertaken only in situations where Northcote believes the well will generate compelling economics to Northcote shareholders.


-0- Feb/28/2013 07:00 GMT

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