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

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

  * 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. 
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 8391   
Roland Cornish            Beaumont Cornish Ltd           +44 (0) 20 7628 3396   
Jerry Keen                Shore Capital Stockbrokers     +44 (0) 20 7408 4090   
Bidhi Bhoma               Shore Capital Stockbrokers     +44 (0) 20 7408 4090   
Hugo de Salis             St Brides Media and Finance    +44 (0) 20 7236 1177   
Elisabeth Cowell          St Brides Media and Finance    +44 (0) 20 7236 1177   
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. 
-0- May/03/2013 06:05 GMT
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