NORTHCOTE ENERGY LIMITED: Interim Results

Northcote Energy Ltd / Index: AIM / Epic: NCT / ISIN: VGG6622A1057 / Sector:
Oil & Gas 
30 September 2013 
      Northcote Energy Ltd (`Northcote Energy' or `the Company') 


                               Interim Results

Northcote Energy (AIM: NCT), an onshore US oil and gas exploration and
production company, is pleased to announce its interim results for the six
month period ended June 30 2013.

Highlights:

- Rapidly advancing strategy of building an extensive low-risk
onshore oil and gas production company

- Quadrupled production since January 2013 to 100boepd

- Increased net acreage by 500% to 2,895 net mineral acres since
listing

- Current P1 reserves with an NPV of US$61.9m based on
approximately half of acreage held- upgrade expected in the coming months

- Development programme in place to rapidly increase production and
reserves

- Targeting in excess of 250 boepd by mid 2014

- Partnership agreement to provide non dilutive capital on an
attractive risk basis to participate in field development

- Evaluating additional opportunities to consolidate our position
in Oklahoma and to expand into other prospective US onshore locations

Northcote Energy Managing Director Randall Connally said, "In our first 6
months since listing we have made dramatic progress in increasing our net
acres, reserves and production. Our current focus is in the state of Oklahoma
where we have built an excellent platform for further rapid growth in the
right address. With already increased production and a steep development curve
projected, we expect a re-rating of our stock which is currently trading at a
66% discount to P1 reserves for only half of our portfolio. With reserve
upgrades targeted in the second half and with a production target of in excess
of 250 boepd next year, we expect to build on the rapid progress made to date
and generate considerable value for shareholders."

CHAIRMAN'S STATEMENT

Since our Admission to AIM in January 2013 we have quadrupled our daily
production, in the process hitting our 100 BOEPD 12 month target five months
ahead of schedule, increased our net leasehold position by 500% to over 3,000
net mineral acres, and almost doubled our proven reserves to US$61.9million.
Achieving all this during our first six months as a listed entity demonstrates
our ability to rapidly and significantly increase net production, reserves and
acreage in the Mississippi Lime formation, our focus area in Oklahoma, as we
look to build Northcote into a leading producer of oil and gas in the region.

The Board believes that this growth has been impressive and is especially
pleased that the Company's net attributable reserves have increased from
0.94million barrels of oil equivalent ("BOE") at IPO to 1.699million BOE. This
does not include any reserves from our interests in the new projects, such as
Oklahoma Energy and Mathis. We expect to announce additional reserves and P1
PV10 later this year after reserve reports have been prepared for these
additional projects. This will significantly add to our reserves per share and
demonstrates the potential within our current asset portfolio. This
significant growth results from the successful implementation of operational
initiatives such as hydraulic fracture stimulation programmes, new wells and
workover campaigns, and the acquisition of additional assets which consolidate
and leverage our position in Osage County, where we believe our management
team provides a significant competitive advantage to the Company. Our reserves
are detailed in the table below:
                               (Grand Total) As of November 1, 2012


                     Gross Reserves       Net Reserves                Net 
Cash Flow 
                   Oil &      Natural  Oil &      Natural  Future  Future 
Future  Future NPV 
                   Condensate Gas                 Gas      Net     Net    
Net     Net    Disc @ 
                                       Condensate          Reserve OPEX & 
Capital Cash   10% 
                                                                   Taxes     
  Flow
Reserve Class /        (MbbI)     (MMcf)   (MbbI)     (MMcf)   ($000)  ($000) 
($000)  ($000) ($000)
Category
Proved Developed              418    1,413         40      192   4,314  2,530    
-  1,784  1,178
Producing
Proved Developed            2,491    6,571      1,030    2,714 102,920 13,777   
1,854 87,290 56,372
Behind Pipe
Proved Shut in                300      944          1        2      57      8    
-     48     33
Proved Undeveloped          3,464    9,830        111      199  10,625  1,587   
  949  8,089  4,359 
      Total Proved      6,672   18,758      1,181    3,107 117,916 17,902   
2,803 97,211 61,942 
Probable Behind Pipe            -        -          -        -       -      -    
-      -      -
Probable Undeveloped        1,800    5,366          3        8     259     38    
41    179    102 
    Total Probable      1,800    5,366          3        8     259     38    
41    179    102 
          Total 2P      8,472   24,124      1,184    3,115 118,175 17,940   
2,844 97,390 62,044 
Possible Behind Pipe            -        -          -        -       -      -    
-      -      -
Possible Undeveloped        2,100    6,210          3        9     300     44    
48    208    117 
    Total Possible      2,100    6,210          3        9     300     44    
48    208    117 
          Total 3P     10,572   30,335      1,187    3,124 118,475 17,984   
2,892 97,598 62,161 
We are focused on the Mississippi Lime formation, a proven and producing
hydrocarbon formation, due to both the highly attractive economics it offers
and the excellent access to infrastructure, making it an ideal environment for
rapid expansion. At between US$2.5million and US$4.0million, drilling costs
are relatively low in the Mississippi Lime and third party commentators
believe it has one of the lowest breakeven oil prices among onshore US plays.
In recent years, US independents such as Chesapeake Energy, Devon Energy Corp.
and SandRidge Energy have successfully built a strong presence in the
Mississippi Lime. Northcote also actively seeks to take advantage of the
multiple pay zones that exist in its focus area and as such is actively
developing other objectives including the Layton and Bartlesville sands. 
Our core portfolio currently consists of the Horizon Project (51% working
interest ("WI")), the contiguous Mathis Project (100% WI), and the OKE Project
(100% WI), where our 100% acquisition conferred Northcote with operator status
in the region. We also have smaller working interests in the Bird Creek
Project, Osage County (3.125% WI), the De Agua Project, Woods County (0.125%
WI) and the South Weslaco Gas Unit, Hidalgo County, Texas (up to 25% WI). With
this in mind, we have set a new production target of reaching 250 BOEPD by the
end of July 2014 to be met through an aggressive work programme on existing
properties that will consist of continuation of the fracture stimulation
programme, new drilling and exploitation of existing well bores. 
We have a highly experienced team on the ground, led by our CEO Randy
Connally, who was involved in the successful formation of Eagle Energy Company
of Oklahoma ("Eagle"). In less than 3 years Eagle was transformed from a
small, gas focused E&P company to a significant player, which was acquired by
Midstates Petroleum for US$650 million in October 2012. The Board plans to
utilise Randy's experience to build Northcote in the mid term. 
Horizon Project, Osage County (51% WI) 
The Horizon Project currently produces from 10 wells with one further well
pending completion. The project has excellent infrastructure for continued low
cost development in the area. The significant and on-going progress we have
made at this asset reflects our multi-faceted approach to increasing our
exposure to the proven substantial reserves. 
Since listing we have increased our WI in Horizon from 28% to 51% through the
exercise of options at minimal cost to the Company, which automatically
enhanced our P1 PV10 and proven reserves considerably. 
We initiated our operational campaign through a workover programme at Horizon
which centred on four wells not scheduled for fracture stimulation in the near
term. This involved increasing water disposal capacity through a pipeline
project, re-acidizing, pumping down fluid levels and in some cases installing
larger submersible pumps. This low cost work had a positive impact on overall
production. The pipeline project in particular has provided significant
production gains and we continue to see additional production gains as the
water is pumped down. 
We elected to participate in the deepening of the Burkhart#1 well, which was
originally drilled to and produced from the Mississippi Chat formation, and it
has successfully reached its target depth of 4,226 feet. This well will be
completed in the Mississippi Lime formation and plans are currently being
discussed with our working interest partners in the well. 
Initially we plan to complete our hydraulic fracturing campaign at Horizon. We
have completed fracks at Big Hill #1 and Big Hill #2, which were deemed our
worst two performing wells when we acquired our interest in the project. We
chose to frack these two wells first to gain an understanding of the variables
associated with fracking in this area; optimization of a frac depends on a
number of variables associated with the well, but also the characteristics of
the formation in a particular region. Big Hill #1 returned positive results
from the frack which contributed towards hitting our 100 BOEPD target. We
reported an open flow rate of up to 1,210 Mcf/day of natural gas (215.5 boepd
gross, 88.4 net to Northcote). These numbers are highly encouraging and have
demonstrated that the fracture stimulation has enabled the well bore to open
up unexploited reservoir. 
We experienced significant technical issues with the frack at Big Hill #2.
Remedial action has been taken and the well is back on test and is currently
producing approximately 120 thousand cubic feet per day of natural gas.
However, management believes that given the issues associated with the well,
specifically split casing and a damaged submersible pump that were discovered
immediately after the frac, there is a significant likelihood that the frac
did not adequately stimulate the well and the reservoir remains, in effect,
unfracked. The performance of this well will be closely scrutinised but, at
this stage, it seems likely that it will be a candidate for further
stimulation at a future date. 
We have also advanced our share of the funds to secure the frack of the next
two wells, both of which are fully funded. The third frack is anticipated to
commence in early October subject to completion of certain work, which is
underway, on the surface location as required by regulatory authorities, with
the fourth frack following shortly thereafter. We plan to frack 4 wells total
in 2013, and will continue our programme across all the wells in our portfolio
in 2014. 
Mathis Project (100% WI) 
In June 2013 we completed the acquisition of a 100% working interest in leases
covering an additional 960 acres (`Mathis') contiguous to the our Horizon
Project for a relatively small payment of US$325,000. 
The Mathis Acquisition comprises 1,280 gross acres, inclusive of 320 gross
acres previously acquired via farm-in. This acquisition adds 960 acres
contiguous to two of the Company's existing wells acquired as part of the
Horizon Project in Osage County, Oklahoma. The approximate 320 acres held by
the Steele and Steinberger producing wells were held by Northcote in the
Mississippian only, but with this acquisition Northcote acquires rights to
drill to all formations on those leases. The acquisition is therefore highly
strategic, allowing us to consolidate our regional position and also further
leverage our existing field infrastructure at Horizon going forward. 
Twenty Two vertical well bores exist on the property and its production
directly offsets the Steele and Steinberger, which are 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 with two additional locations possible, subject to
further geologic analysis. Significantly, all of the leases are part of a
"unit" and as such, production on any part of the unit holds the entire lease
by production. 
Oklahoma Energy Project ("OKE") (100% owned) 
We completed the acquisition of a 100% working interest in the 1,040 acre OKE
Project in April 2013 for a total sum of US$700,000, of which US$250,000 was
settled in equity and a further US$200,000 earn-out to be paid from
production. 
On completion of the acquisition of OKE, Northcote gained operator status and
capacity to operate projects in Osage County, Oklahoma. This project has huge
potential and we have already commenced work to unlock this potential. The
first stage of our work programme has been completed and was highly successful
increasing production by 150% since acquisition to 37 BOPD. 
The second stage of the workover programme is now underway and targeting an
increase in gross production at OKE to 50 bopd by the end of 2013. In
conjunction, we are evaluating additional Mississippian opportunities on the
acreage to significantly enhance production and reserves with at least one
well scheduled to be drilled within the next twelve months. Importantly, the
project has the required infrastructure in place to support increased
production. 
These initiatives to increase production will be highly beneficial to
Northcote as we aim to accelerate the pay-out of the 41.5% BlueRock term
royalty inherited on acquisition. BlueRock's royalty will expire when it has
received US$1.23 million and an internal rate of return on that amount of 15%
from its share of the Project's revenues. On expiry of BlueRock's royalty, our
net revenue interest will increase to 80% and leave us well positioned to
develop all zones within our tenure. 
Bird Creek Prospect, Osage County: (average 3.125% working interest) 
We acquired a 3.125% working interest in the Bird Creek Prospect shortly after
listing. We have already elected to participate in the drilling of two wells,
one of which, the Bray #1, has been drilled to target depth of 1,820 feet and
encountered good oil shows across 10 feet of pay from 1,704 to 1,714 feet.
While the results from the well, together with well data from nearby wells
suggested we were on the outer edge of a structure, the porosity was less than
desired. We next participated in drilling the Keese #1 well which is complete
and a second Keese well (third overall), the Keese #2, is currently being
completed. On completion of the second well, work will begin to install the
necessary production facilities in order to permit production from the wells,
at which point production data will be announced. The Bray #1 will be
completed as a salt water disposal well. 
DeAgua Project, Woods County: (average 0.348 % working interest) 
This smaller working interest in the DeAgua Project enables us to participate
in wells alongside Chesapeake and Midstates, two of the leading operators in
the Mississippi Lime.The pace of drilling on this project has been a
disappointment as the operator has been focused on other acreage in their
portfolio. However, one well, the Cook 1H-12, in which Northcote has an
approximate 1.0% working interest, is being completed and results will be
announced in due course. 
Partnerships 
In July 2013 we were pleased to announce the formation of our first
partnership vehicle, Northcote Drilling Partners LLP (`the Partnership'). This
enables U.S. investors to participate with Northcote in the development of oil
and gas assets located onshore US, initially in Oklahoma. Full details of the
partnership can be found in the announcement dated 4 July 2013, but in
essence, the Partnership will de-risk Northcote's development programme by
providing it with a non-dilutive source of capital that offers direct upside
participation in additional assets, whilst also providing opportunities to
optimize our portfolio by sharing the costs associated with higher risk, but
also high reward. Importantly, our subsidiary, Northcote Energy Development,
is managing general partner of the Partnership and receives a participation in
the revenues generated by the partnership for this role. 
Financial Review 
Gross production at Horizon during the period averaged over 100 BOEPD,
significantly less than the full potential of the project. During the period
under review, production was affected by the work programme across the
project, which resulted in production at a number of the wells at our Big Hill
and Little Drum units being temporarily suspended whilst work was completed.
We look forward to reporting substantially increased revenues in our year end
accounts, as the full year effects of our work programme are shown through
increased production. 
During the period the Group reported a loss of $2,183,000 of which $1,273,000
(2012: $Nil) related to a one-off goodwill impairment related to the reverse
acquisition completed in January 2013. In addition the loss includes IPO costs
of $366,000 and non-cash share based payments of $64,000 (2012: $Nil). 
During the period, Northcote raised a total of $5.2million via placing. The
funds raised, both on admission and post admission, are being used to
accelerate our work programmes across both our original and expanded portfolio
of projects. As part of the placings we were delighted to welcome Cape Bouvard
Equities Pty Ltd, one of Australia's largest private investment companies, to
our shareholder register. 
Outlook 
We have significantly grown Northcote during the first six months of the year,
our first as a public entity. We now have a strong core portfolio with
excellent upside potential, operator status in Osage County and an exciting
and de-risked development campaign to considerably bolster our production to
250 BOEPD and build on our already sizeable reserves by the end of July 2014.
In tandem with this, our experience and network in Osage County will help us
secure further value accretive opportunities to consolidate our position, a
proven strategy which will substantially enhance Northcote's value, and build
the Company into a leading oil and gas company in the State of Oklahoma. 
We have set, and are confident of meeting, the following operating targets: 
- 5,000 net acres by 31 December 2013; and 
- 250 boepd production by 31 July2014. 
I would like to take this opportunity to thank our Board, management and
advisers for their hard work during this exciting period, which has seen us
achieve the first of our annual production targets, 5 months early, and we
look forward to the next 12 months as we continue to deliver our growth plans
by the execution of our ongoing work programme. 
Ross Warner 
CHAIRMAN 
For further information visit www.northcoteenergy.com 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 fracking
campaign in 2013. 
Consolidated statement of comprehensive loss (unaudited) 
                                           Six months                Nine 
months            Six months 
                                              ended          ended 31 Dec 
2012                 ended 
                                       30 June 2013             (unaudited 
and          30 June 2012 
                                        (unaudited)                  
restated)           (unaudited) 
                                           US$'000s                   
US$'000s              US$'000s 
Revenue                                             360                        
113                     -
Cost of sales                                     (234)                       
(53)                     -
Gross profit                                        126                         
60                     -
Administrative expenses
- Impairment of goodwill                          1,273                         
 -                     -
- Other administrative expenses                   1,133                        
241                     -
Total administrative expenses                   (2,406)                      
(241)                     -
Operating loss                                  (2,280)                      
(181)                     -
Finance income                                      125                         
 -                     -
Finance costs                                      (28)                         
 -                     -
Loss before tax                                 (2,183)                      
(181)                     -
Income tax expense                                    -                         
 -                     -
Loss after tax attributable to                  (2,183)                      
(181)                     -
equity holders of the parent 
Exchange differences arising on                   (166)                         
 3                    12
translating foreign operations 
Total comprehensive loss for the                (2,349)                      
(178)                    12
period attributable to equity
holders of the parent 
Weighted average number of shares           874,756,198                
102,870,880            14,950,001 
                                                                    0. 2 
cents                     - 
Basic and diluted loss per share              0.2 cents 
Consolidated statement of financial position (unaudited) 


                                                                                  
                         30 June
                                                                                
      31 Dec
                                                                                
                            2012
                                                        30 June 2013            
        2012          (unaudited


                                                                          
(unaudited and                 and 
                                                     (unaudited)             
restated)           restated) 
                                                          US$'000s             
US$'000s            US$'000s
Assets
Non-current assets
Intangible Oil & Gas assets                                    1,575             
     400                   -
Tangible Oil & Gas assets                                      4,055             
     978                   -
Total non-current assets                                       5,630             
   1,378                   - 
Current assets
Receivables                                                      241             
     111                   -
Cash and cash equivalents                                      1,420             
      11                  31
Total current assets                                           1,661             
     122                  31
Total assets                                                   7,291             
   1,500                  31 
Liabilities
Non-current liabilities
Promissory notes                                                  50             
     476                   -
Provisions                                                        72             
       -                   -
Total non-current liabilities                                  (122)             
   (476)                   - 
Current liabilities
Trade and other payables                                         323             
      80                  62
Other loans                                                      343             
     250                   -
Provisions                                                       128             
       -                   -
Total current liabilities                                      (794)             
   (330)                (62)
Total liabilities                                              (916)             
   (806)                (62)
Net assets                                                     6,375             
     694                (31) 
Capital and reserves
Share capital                                                      -             
      38                  15
Share premium                                                 15,588             
   1,421                 529
Shares to be issued                                            1,888             
       -                   -
Foreign currency translation reserve                           (189)             
    (23)                (14)
Reverse acquisition reserve                                  (8,202)             
       -                   -
Accumulated loss                                             (2,710)             
   (742)               (561)
Total equity attributable to the parent entity                 6,375             


         694                (31)


Consolidated statement of changes in equity (unaudited)
                                                                     Foreign
                                                                  currency


                                                           translation     
Reverse 
                                                               reserve 
acquisition 
                    Share capital Share premium  Shares to                 
reserve Accumulated loss   Total equity 
                                                 be issued 
                         US$'000s      US$'000s   US$'000s    US$'000s    
US$'000s         US$'000s       US$'000s
Balance at 1                       15           529          -        (26)       
 -            (561)           (43)
January 2012
Total comprehensive                 -             -          -          12       
 -                -             12
loss for the period
Balance at 30                      15           529          -        (14)       
 -            (561)           (31)
June 2012
Total comprehensive                 -             -          -         (9)       
 -            (181)          (190)
loss for the period
Issue of share capital             22           880          -           -       
 -                -            902
Share-based payments                1            12          -           -       
 -                -             13
Balance at 31                      38         1,421          -        (23)       
 -            (742)            694
December 2012
Total comprehensive                 -             -          -       (166)       
 -          (2,183)        (2,349)
loss for the period
Issue of shares                     -        15,014      1,888           -       
 -                -         16,902
Conversion of                       -           250          -           -       
 -                -            250
debt to equity
Share issue costs                   -         (443)          -           -       
 -                -          (443)
Reverse acquisition              (38)         (503)          -           -     
(8,202)                -        (8,743)
adjustment
Share options                       -             -          -           -       
 -               60             60
issued
Share warrants                      -         (151)          -           -       
 -              155              4
issued
Balance at 30 June 2013             -        15,588      1,888       (189)     
(8,202)          (2,710)          6,375 
Consolidated statement of cash flows (unaudited) 


                                                                                  
                              Six months
                                                                                
                                ended 30
                                                                                
                                Jun 2012


                               Six months ended 30 Jun 2013          Nine 
months ended 31 Dec 2012     (unaudited and 
                                              (unaudited)               
(unaudited and restated)           restated) 
                                                   US$'000s                    
        US$'000s            US$'000s
Cash flows from
operating activities:
Net loss for                                                                     
                                   -
the period                                            (2,183)                    
           (181)
Items not involving cash:
Depreciation of                                                                  
                                   -
property, plant and
equipment                                                  24                    
               -
Impairment of                                                                    
                                   -
goodwill                                                1,273                    
               -
Share-based                                                                      
                                   -
payment expense                                            64                    
               -
Net interest                                                                     
                                   -
expense                                                    28                    
               -
Net foreign                                                                      
                                   -
exchange                                                (125)                    
               -
Change in working
capital items:
(Increase)/Decrease                                                              
                                   -
in receivables                                           (90)                    
           (107)
Increase/(Decrease) in                                                           
                                   -
trade and other payables                                    1                    
               5
Net cash used in                                                                 
                                   -
operations                                            (1,008)                    
           (283)
Cash flows from
investing activities
Acquisition of                                                                   
                                   -
subsidiary                                              (450)                    
               -
Purchases of property,                                                           
                                   -
plant and equipment                                   (1,826)                    
               -
Payments to acquire                                                              
                                   -
intangible assets                                       (325)                    
               -
Interest received                                           3                    
               -                   -
Net Cash acquired                                                                
                                   -
on reverse acquisition/
acquisitions                                              577                    
               -
Net cash used in                                                                 
                                   -
investing activities                                  (2,021)                    
               -
Cash flows from
financing activities
Proceeds from                                                                    
                                   -
issue of convertible
loans                                                       -                    
             250
Proceeds from                                                                    
                                   -
issue of share capital                                  5,243                    
              13
Share issue costs                                       (442)                    
               -                   -
Proceeds from                                                                    
                                   -
borrowing                                                 363                    
               -
Repayments of                                                                    
                                   -
loans                                                   (696)                    
               -
Loan and bank                                                                    
                                   -
interest paid                                            (30)                    
               -
Net cash generated                                                               
                                   -
by financing
activities                                              4,438                    
             263
Net increase/
(decrease) in cash
and cash                                                                         
                                   -
equivalents                                             1,409                    
            (20)
Cash and cash
equivalents, beginning
of period                                                  11                    
              31                  31
Effect of foreign                                                                
                                   -
exchange rate changes                                       -                    
               -
Cash and cash
equivalents, end
of period                                               1,420                    
              11                  31 
Significant non-cash transactions relate to the issue of shares on reverse
acquisition of Northcote Energy and issue of shares as consideration for Oil &
Gas acquisitions during the period. 
Notes to the consolidated financial statements (unaudited) 
For the six months ended 30 June 2013 
(Stated in U.S. dollars) 
1. Basis of preparation 
The condensed consolidated interim financial statements have been
prepared in accordance with the requirements of the AIM Rules for Companies.
As permitted, the Company has chosen not to adopt IAS 34 "Interim Financial
Statements" in preparing this interim financial information. The condensed
interim financial statements should be read in conjunction with the annual
financial statements for the period ended 31 December 2012, which have been
prepared in accordance with International Financial Reporting Standards (IFRS)
as adopted by the European Union. 
The interim financial information set out above does not constitute
statutory accounts. They have been prepared on a going concern basis in
accordance with the recognition and measurement criteria of International
Financial Reporting Standards (IFRS) as adopted by the European Union.
Statutory financial statements for the year ended 31 December 2012 were
approved by the Board of Directors on 27 March 2013. The report of the
auditors on those financial statements was unqualified. 
The 2013 interim financial report of the Company has not been
audited or reviewed by the Company's auditor, PKF Littlejohn LLP. 
Going concern 
The Directors, having made appropriate enquiries,
consider that adequate resources exist for the Group to continue in
operational existence for the foreseeable future and that, therefore, it is
appropriate to adopt the going concern basis in preparing the condensed
interim financial statements for the period ended 30 June 2013. 
Risks and uncertainties 
The Board continuously assesses and monitors the
key risks of the business. The key risks that could affect the Group's medium
term performance and the factors that mitigate those risks have not
substantially changed from those set out in the Group's 2012 Annual Report and
Financial Statements, a copy of which is available on the Group's website:
www.northcoteenergy.com. The key financial risks are liquidity risk, foreign
exchange risk, credit risk, price risk and interest rate risk. 
Critical accounting estimates 
The preparation of condensed interim financial
statements requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the end of the reporting period. Significant items
subject to such estimates are set out in the notes of the Group's 2012 Annual
Report and Financial Statements. The nature and amounts of such estimates have
not changed significantly during the interim period. 
Presentation currency 
Upon completion of the RTO the presentational
currency of the Group and its comparatives was made US $. This change was made
as the Directors considered the US$ to most faithfully represent the economic
effects of the underlying transactions, events and conditions in the Company.
As a consequence of this change in presentational currency the financial
information for the period ended 30 June 2012 and the period ended 31 December
2012 has been presented in US$ and has been described as "unaudited and
restated". 
2. Accounting Policies 
The same accounting policies, presentation and
methods of computation have been followed in these condensed interim financial
statements as were applied in the preparation of the Group's annual financial
statements for the period ended 31 December 2012 except for the impact of the
adoption of the Standards and interpretations described below. 
 Changes in accounting policy and disclosures 
(a) New and amended standards, and
interpretations mandatory for the first time for the financial year beginning
1 January 2013 but not currently relevant to the Group. 
Standard                    Impact on initial application              
Effective date 
                 Deferred tax: recovery of underlying
IAS 12 (Amendment)   assets                                     1 January 2013
IFRS 13              Fair value measurement                     1 January 2013 
(b) New standards, amendments and interpretations issued but
not effective for the financial year beginning 1 January 2013 and not early
adopted 
Standard                                                    Effective date 
                                                        1 January
IFRS 10            Consolidated financial statements        2013*1 
                                                        1 January
IFRS 11            Joint arrangements                       2013*1 
                                                        1 January
IFRS 12            Disclosure of interest in other entities 2013*1
IAS 19 (Amendment                                           1 January
2011)              Employee benefits                        2013*2
IAS 27 (Amendment
2011)              Separate financial statements            1 January 2013
IAS 28 (Amendment  Investments in associates and joint      1 January
2011)              ventures                                 2013*1
IAS 32 (Amendment  Offsetting financial assets and
2011)              financial liabilities                    1 January 2014 
                                                        1 January
IFRS 9             Financial instruments                    2015*2 
               Financial Instruments: Disclosures 
               Offsetting Financial Assets and          1 January
IFRS 7             Financial Liabilities                    2013*2 
1 Effective date 1 January 2014 for the EU. 
2. Not yet endorsed by the EU 
3. Reverse acquisition of Northcote Energy Limited 
On 14 January 2013 the Company acquired 100% of the issued share
capital of Northcote Energy Limited, Cayman Islands ("Northcote CI"), a US
focused on-shore oil and gas company, for a consideration of US$10.4 million
to be satisfied by the issue of 645,084,519 new Shares to the Sellers.
Northcote Energy Limited was incorporated as an investment vehicle focused on
the completion of a natural resources acquisition. The Directors identified
and completed the acquisition of Northcote CI in line with this strategy and
to further the business interests of the Company. 
In accordance with IFRS 3 (Revised) the acquisition represents a
reverse acquisition and the details of the reverse acquisition are below: 
Total consideration                                   $000's
Equity instruments in issue (5,995,841 ordinary       1,645
shares at 17.012p each)
Recognised amounts of identifiable assets
acquired and liabilities assumed
ASSETS
Receivables                                           40
Cash and cash equivalents                             574
Total identified net assets                           614
LIABILITIES
Trade and other payables                              (242)
Total identified liabilities                          (242)
Total identified net assets                           372
Goodwill                                              1,273 
In a reverse acquisition the acquisition date fair value of the
consideration transferred by Northcote Energy Limited is based on the number
of equity instruments that Northcote CI would have had to issue to the owners
of Northcote Energy Limited to give the owners of Northcote Energy Limited the
same percentage of equity interests that results from the reverse acquisition.
The cost of the combination was calculated using the fair value of all the
pre-acquisition issued equity instruments of Northcote Energy Limited at the
date of acquisition. The fair value of the share consideration was based on
the latest share transaction of Northcote Energy CI from October 2012 of 
�0.17
immediately prior to the acquisition. Goodwill of $1,273,000 was be expensed
immediately on acquisition and all the acquisition related costs will also be
expensed in accordance with IFRS 3 (Revised). 
The costs of the reverse acquisition of Northcote CI totalled
$690,000; of this amount $366,000 was charged to the income statement in the
period under review, with the remaining amount being recorded in the prior
period ended 31 December 2012 
4. Acquisition of Oklahoma Energy 
Effective 1 April 2013 the Group acquired a 100% interest in
Oklahoma Energy LLC ("OKE") , a US company with Oil & Gas assets in Oklahoma
in exchange for consideration totaling $900,000 comprising $500,000 payable to
the vendor and a $400,000 payment to BlueRock Capital LLC, a third party. 
Prior to Northcote agreeing to purchase OKE, OKE had sold a term
overriding royalty interest (`Royalty') to BlueRock Capital, LLC (`BlueRock').
The Royalty confers a direct NRI on BlueRock in the project assets. Northcote
has agreed to pay BlueRock US$400,000 at completion to reduce the outstanding
balance of the Production Payment to US$1.23 million. 
The consideration for the acquisition is as follows: 
1) US$50,000 in cash (`OKE Cash Consideration'); 
2) US$250,000 to be settled by the issue of 9,523,809 new Ordinary Shares at
1.75 pence per new Ordinary Share (`OKE Consideration Shares'); and 
3) up to a maximum payment of US$200,000 in cash payable at the rate of US$10
per boed produced up until 4 March 2020. 
4) payment to BlueRock $400,000 
In accordance with IFRS 3 (Revised) the details of the acquisition are below: 
Total consideration                                      $000's
Equity instruments in issue (9,523,809 ordinary shares   250
at 1.75p each)
Earn-out provision ($10 per barrel of production to a    200
maximum of $200,000)
Cash (including $400,000 BlueRock facility               450
payment)
Total consideration                                      900 
Recognised amounts of identifiable assets acquired and   $000's
liabilities assumed
ASSETS
Tangible Oil & Gas assets                                87
Intangible Oil & Gas assets                              850
Cash and cash equivalents                                3
Total identified net assets                              940
LIABILITIES
Trade and other payables                                 (40)
Fair value of total net assets                           900 
5. Segmental analysis 
In the opinion of the Directors, the operations of the Group
comprise one single operating segment comprising production, development and
sale of hydrocarbons and related activities. The Group operates in one
geographic area, USA. The Group has head office operations in the UK but the
quantitative thresholds of IFRS 8 are only met for the USA, which is therefore
the Group's one reportable segment and the Directors consider that the primary
financial statements presented substantially reflect all the activities of
this single operating segment. 
6. Oil & Gas Assets 


                              Intangible    Tangible
                              assets        assets      Total


                          $'000s        $'000s      $'000s
Cost
At 1 January 2012 and 30 June
2012                          -             -           -
Additions                     400           978         1,378
At 31 December 2012           400           978         1,378
Additions                     325           3,014       3,339
Acquired through business
combination                   850           87          937
At 30 June 2013               1,575         4,079       5,654 
Depletion charge
At 1 January 2012 and 30 June
2012                          -             -           -
Charge for the period         -             -           -
At 31 December 2012           -             -           -
Charge for the period         -             24          24
At 30 June 2013               -             24          24 
Net book value
At 30 June 2013               1,575         4,055       5,630
At 31 December and 30 June
2012                          400           978         1,378 
Analysis of NBV by project:
Oklahoma Energy               850           186         1,036
Other projects                725           -           725
Horizon Project               -             3,869       3,869
At 30 June 2013               1,575         4,055       5,630 
On 13 February 2013 the Group acquired an additional 10% working
interest in the Horizon project for US$800,000 satisfied by the payment of
$107,500 cash and the issue of 18,083,183 fully paid Shares in Northcote with
the issue of a US$192,500 promissory note. 
On 13 February 2013 On 13 February 2013 the Group acquired an
additional 2.2% royalty interest in the the Horizon Project for US$300,000
satisfied by cash of US$101,000, the issue of 5,424,955 fully paid Shares in
Northcote and the issue of a US$49,000 promissory note. 
On 22 March 2013 the group agreed to acquire an average 7.25%
working interest in 10 wells at the Company's Horizon Project for
consideration of US$600,000 to be satisfied by the issue of 22,857,143 new
Ordinary Shares at a price of 1.75 pence per new share. 
Additionally on 22 March 2013 the Company entered into an agreement
with Horizon to acquire a further 6% working interest in the Horizon Project
for US$480,000 payable in cash. 
Acquisition of Oklahoma Energy ("OKE") is described in more detail
in note 3. 
7. Share options and warrants 
The following is a summary of the share options outstanding and exercisable as
at 30 June 2013, 31 December 2012 and 30 June 2012 changes during the period: 
                                       30 June 2013          30 June 2012 
and 31 
                                                             December 2012 
                                                  Weighted             
Weighted 
                                                  average              
average 
                                                  exercise             
exercise 
                                                  price                
price 
                                       Number     (Pence)    Number of 
(Pence) 


                                                                 options
                                           of


                                         options
Outstanding at beginning of period         -          -          -         -
Warrants in Northcote Energy Ltd at
acquisition                                1,000,000  1.00       -         -
Warrants granted post acquisition          20,669,046 1.15       -         -
Options granted to Directors               49,000,000 2.46       -         -
Outstanding and exercisable, end of period 70,669,046 2.06       -         - 
At 30 June 2013 the following share options were outstanding in respect of the
ordinary shares: 
Grant Date Expiry Date Number of    Acquired/     Number of      Exercise 
Exercisable at 
                   Options      Issued        Options        Price 
                   b/fwd                      Outstanding    per      30 
June 13 
                                                             Option 
14.01.13   14.01.16    -            1,000,000     1,000,000      1.00p    
1,000,000
14.01.13   14.01.16    -            14,669,046    14,669,046     1.00p    
14,669,046
22.03.13   22.03.16    -            6,000,000     6,000,000      1.50p    
6,000,000
05.04.13   05.04.18    -            14,000,000    14,000,000     1.75p1   -
05.04.13   05.04.18    -            17,500,000    17,500,000     2.25p2   -
05.04.13   05.04.18    -            17,500,000    17,500,000     3.25p3   - 
                   -            70,669,046    70,669,046              
21,669,046 
1) Vests after 31.12.13 on condition that the Director is employed at that
date and that net production is greater than 100 boepd; 
2) Vests after 31.12.13 on condition that the Director is employed at that
date and that net production is greater than 250 boepd; 
3) Vests after 30.06.13 on condition that the Director is employed at that
date and that net production is greater than 400 boepd; 
The new options have been valued using Black-Scholes and the assumptions used
are detailed below: 
Grant date Share price Exercise   Volatility Option life Dividend   Risk-free 
investment    Fair value per 
       at grant    price                             yield      rate         
        option
14-01-13   1.00p       1.00p      60%        3 years     0%         1%          
0.655cents
22-03-13   1.50p       1.50p      60%        3 years     0%         1%          
0.922cents
05-04-13   1.48p       1.75p      40%        5 years     0%         1%          
0.694cents
05-04-13   1.48p       2.25p      40%        5 years     0%         1%          
0.523cents
05-04-13   1.48p       3.25p      40%        5 years     0%         1%          
0.208cents 
The Group recognised $215,000 (2012: $Nil) related to
equity-settled share based payment transactions during the year, of which
$151,000 was charged to share premium and $64,000 was expensed. There is a
further $184,000 (2012: $Nil) to be recognised in the subsequent financial
period, in relation to the above issue of options. 
8. Loans and borrowings 


                      6% Bank    4.5%        6%           30      31      30
                      Debt       Promissory  Promissory
                                 notes       notes        June    Dec     June
                      $'000s
                                 $'000s      $'000s       2013    2012    2012


                                                        $'000s  $'000s  
$'000s 
Brought forward       -          -           -            -       -       -
Initial drawdown      350        49          669          1,068   -       -
Interest              3          1           29           33      -       -
Repayments            (10)       (50)        (648)        (708)   -       -
Carried at period end 343        -           50           393     -       - 
Principal terms and the debt repayment schedule of the Group's
loans and borrowings are as follows for 30 June 2013 and 31 December 2012 
                          Currency Interest rate Year of maturity
Bank loans                    US$      6%                2014
Promissory notes              US$      4.5%              2016
Promissory notes              US$      6%                2016 
The promissory notes are unsecured and shall be payable between
issue and a maximum of five years from the date of issue. In the event that
the loan hasn't been paid down by maturity the outstanding principal and
interest will be fully payable at maturity. 
9. Provisions 


                             30 June    31 Dec  30 June
                               2013       2012    2012


                         $'000s     $'000s  $'000s 
Due within one year or less  128        -       -
Due after more than one year 72         -       -
Total provision              200        -       -
The provision is in respect of an earn-out provision payable to the
vendor of Oklahoma Energy LLC. Up to a maximum payment of US$200,000 in cash
payable at the rate of US$10 per boed produced up until 4 March 2020. 
10. Events after the balance sheet date 
Northcote Energy has entered into an agreement to acquire up to a
25% working interest (`WI') in certain producing leases at the South Weslaco
Field, Hidalgo County, Texas. The effective date for the Acquisition will be 1
September 2013 and the consideration being paid consists of US$150,000 in cash
and 12,348,372 new ordinary shares of no par value in the Company. The
completion is pending and is contingent on the assignment of oil and gas
leases to the Group but is expected to complete in the next few weeks. 
There were no other events to report after the balance sheet date 
END 
-0- Sep/30/2013 06:08 GMT
 
 
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