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NORTHCOTE ENERGY LIMITED: Increased Acreage in Oklahoma and Issue of Equity


NORTHCOTE ENERGY LIMITED: Increased Acreage in Oklahoma and Issue of Equity Northcote Energy Ltd / Index: AIM / Epic: NCT / ISIN: VGG6622A1057 / Sector: Oil & Gas

3 May 2013

Northcote Energy Ltd (`Northcote' or `the Company')


     Letter of intent to increase Acreage in Oklahoma and Issue of Equity      

Northcote (AIM: NCT), an onshore US oil and gas exploration and production
company, is pleased to announce that it has entered into a letter of intent to
acquire a 100% working interest in leases covering an additional 960 acres
(`Matthis') contiguous to the Company's 50.15% owned Horizon Project which, if
completed, would significantly increase its acreage position in the producing
Mississippi Lime formation in Osage County, Oklahoma to 2,865 acres
(`Acquisition').

Key Highlights

  * Over 500% increase in net leasehold position since listing propels
    Northcote over halfway towards its target of securing 5,000 net acres by
    the end of the year in the Mississippi Lime formation in the area
    surrounding its core Horizon Project
      * Acquisition is in line with strategy to acquire and develop leases in
    Oklahoma and grow net production and reserves through drilling
      * Matthis offers Northcote additional upside as a result of:
          + Existing 3-D seismic covering a portion of the additional acreage
       
      + At least two previously identified horizontal well locations with
        additional acreage to be evaluated
       
      + Directly offsets Northcote's two existing, producing wells, Steele and
        Steinberger on the Horizon Project
       
      + Will allow Northcote to leverage existing investment in field
        infrastructure

* Acquisition price of US$325,000 - the Acquisition is subject to the


    completion of satisfactory due diligence and it is intended to close within
    thirty (30) days
      * Strategic shareholder secured through a subscription of 42,833,707 ordinary
    shares in the Company (at 1.55p per share, raising A$1million (£663,922))
    by Cape Bouvard Equities Pty Ltd (`Cape Bouvard'), one of Australia's
    largest private investment companies
      * P1 PV10 of CPR assigned US$61.94 million value to P1 reserves does not
    include Matthis or recently acquired OKE acreage

Northcote's Chief Executive Officer Randy Connally said, "Following successful completion of the Matthis Acquisition, we will be over halfway towards meeting our end of year target of building a net land position covering 5,000 acres in Osage and contiguous counties. Neighbouring our core Horizon Project, the Matthis property is a very exciting acquisition and we have put considerable effort into acquiring the property which is not only located in a productive area, but will also allow us to leverage existing infrastructure as we look to grow our Mississippian production and reserves further. Being comparatively under-developed and combined with a 100% WI, we believe Matthis provides our shareholders with exposure to significant value upside potential through development and workovers of existing wellbores. In addition with at least two horizontal drilling locations highlighted to date, we are confident that there is plenty of underlying value to be realised from our investment over the coming months.

"Since listing on AIM at the beginning of the year, we have strived to demonstrate the scale of our ambition through the swift implementation of work programmes and acquisitions. We are grateful for having secured a supportive institutional investor base since the IPO and through the placing in March and we are now pleased to welcome to that group one of Australia's largest private investment companies, Cape Bouvard. I am hopeful that its subscription for A$1million (£663,922) represents the start of a strong, long term association with the Company as we focus on becoming a significant producer in the de-risked Mississippi Lime play."

Matthis Property

The Matthis Acquisition comprises the purchase of 1,280 gross acres, inclusive of 320 gross acres previously acquired via farm-in. This acquisition conveys all rights to all objectives to Northcote on the 320 acres previously acquired via farm-in and adds 960 acres contiguous to two of the Company's existing wells acquired as part of the Horizon Project (approx. 51% WI) in Osage County, Oklahoma. The approximate 320 acres held by the Steel and Steinberger producing wells were held by Northcote in the Mississippian only, with this acquisition Northcote acquires all rights on those leases.

Eight vertical wells exist on the property and its production directly offsets Northcote's two existing, producing wells, Steele and Steinberger, two of the best performing wells on the Horizon Project.

3-D seismic exists covering a portion of the leasehold and the Company has already identified two potential horizontal well locations. Significantly, all of the leases are part of a "unit" and as such production on any part of the unit holds the entire lease position indefinitely, all of the acreage under these leases are therefore held by production.

Subscription by new strategic investor

The Company has raised A$1million (£663,922 before expenses of £2,000) by way of a subscription of 42,833,707 new ordinary shares (`Subscription Shares') by Cape Bouvard at a price of 1.55 pence per share. Cape Bouvard is one of Australia's largest private investment companies. The Subscription Shares will represent approximately 4.0% of the enlarged issued share capital of the Company and the proceeds will be used to acquire assets and to accelerate the development programme.

The subscription is conditional, inter alia, on receipt of cleared funds from Cape Bouvard and admission of the Subscription Shares to trading on AIM. It is expected that trading in the Subscription Shares on AIM will begin, at 8 a.m. on 9 May 2013. The Subscription Shares will rank pari passu in all respects with the Company's existing ordinary shares of 0.1p each ("Ordinary Shares").

Following completion of the subscription, the Company's issued share capital will consist of 1,066,627,375 Ordinary Shares.

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.

**ENDS**

For further information and the full Admission document visit www.northcoteenergy.com, 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 8391

Roland Cornish 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 fracing, are used to unlock known oil accumulations and dramatically improve recovery rates. Management is focused on increasing production through a multi-well drilling and fracing campaign in 2013.

END

-0- May/03/2013 06:05 GMT

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