NORTHCOTE ENERGY LIMITED: Intention to Drill 1st Horizontal Well Mississippi Lime

NORTHCOTE ENERGY LIMITED: Intention to Drill 1st Horizontal Well Mississippi 
Northcote Energy Ltd / Index: AIM / Epic: NCT / ISIN: VGG6622A1057 / Sector: 
Oil & Gas 
4 October 2013 

          Northcote Energy Ltd (`Northcote Energy' or `the Company')           
    Intention to drill first Horizontal well targeting the Mississippi Lime    

Northcote Energy (AIM: NCT), an onshore US oil and gas exploration and
production company, is pleased to announce plans to drill its first horizontal
well targeting the Mississippi Lime formation on its 100% owned Mathis lease
prior to end of December 2013. In addition as part of the well planning
process, the first two undeveloped locations on Mathis have been designated P1
PV-10% reserves of US$14.8million, which combined with the previously announced
reserves brings the value of the Northcote's P1 reserves to US$76.7 million.


  * New horizontal well, targeting the Mississippian, anticipated to spud prior
    to the end of December 2013
      * First well location designated proved undeveloped (P1) status by Moyes & Co
      + 200,000 barrels of oil, 1.7Bcf of natural gas and a PV-10% of

  * Total Mathis lease assigned P1 reserves of 328,000 barrels of oil and 

    2.79Bcf of natural gas and a PV-10% of US$14.8 million
      * Mathis lease acquired for US$325,000 - Reserves assigned by Moyes & Co
    validate strategy to acquire and develop leases in Oklahoma and grow net
    production and reserves through drilling
      * Advanced discussions to sell at least a 50% working interest in the well as
    part of our strategy for balancing upside with the management of financial
      * Total value of P1 reserves (PV10%) assigned by Moyes across Northcote's
    portfolio of 2,895 net mineral acres now stands at US$76.7million compared
    to its current market capitalisation of £12.24 million

Northcote Energy Managing Director Randall Connally said "As the first
horizontal well drilled by Northcote since listing this is a very exciting next
step in the evolution of our company and we are excited about the prospects for
completing this well during our first 12 months on AIM. This has the potential
to be a high impact well for us and on a net basis to significantly contribute
to meeting our newly established 250 BOE/d production target by mid-2014. In
the meantime the Mathis Oil & Gas reserves, estimated by Moyes, represent on a
gross basis a 24% increase in our P1 PV10 to US$76.7m, further strengthening
the asset backing behind our current market valuation of £12.24 million." 
Further Information 
Northcote holds a 100% interest in the Mathis project which was acquired in May
2013 for US$325,000 and covers 960 acres contiguous to the Company's 51% owned
Horizon Project in the producing Mississippi Lime formation in Osage County,
Oklahoma. Management's rationale for the acquisition of Mathis, as announced in
May 2013, was that for a relatively small investment it provided shareholders
with exposure to significant value upside potential through the development and
workovers of existing wellbores alongside at least two horizontal drilling
As part of the Company's diligence in preparing for this well, the project has
now been evaluated by Moyes & Co and we are delighted that they have validated
our assessment of the Mathis project's potential. The first location has been
designated as a proved undeveloped location (P1) with 200,000 barrels of oil
and 1.7Bcf of natural gas and a PV-10% of US$9.7 million, net of expected
drilling and completion costs. 
In addition to this first horizontal well, Northcote has been given a second
proven undeveloped location with the combined proven undeveloped reserves for
both locations totalling 328,000 barrels of oil and 2.79Bcf of natural gas and
a PV-10% of US$14.8 million, net of expected drilling and completion costs.
This represents a 28% increase in total oil reserves and 90% increase in total
natural gas reserves. 
The surface location for the first well will be located near the Company's
existing producing Steele and Steinberger wells to the west of the Horizon
project, Osage County, Oklahoma. The two horizontal locations identified were
each selected based on the same 3-D seismic used to identify the Steele and
Steinberger well locations. 
Northcote intends to drill the well using an existing vertical well pad site to
drill a new well to test the Mississippi lime formation at an approximate true
vertical depth of 3,000' with a contemplated 3,500' cased horizontal extension
to target unexploited reservoir identified on existing 3-D seismic. A
multi-stage fracture stimulation will be undertaken as part of the completion
of the well. By utilizing an existing pad site, Northcote will save time and
capital in drilling the well as it eliminates the need to prepare a new
location, does not require additional permitting and eliminates the need for an
archaeological survey on a new well site. 
The estimated completed well cost is US$3.25 million on a 100% working interest
basis. As part of our strategy for managing our portfolio and balancing
retention of upside with management of financial risk, Northcote intends to
sell at least 50% working interest in the well while retaining between 30% and
50% working interest as well as operational control of the project. 
The Company is presently in advanced discussions with a number of industry and
private investors regarding farming into the 50% working interest being offered
in the well. Subject to completion of the farm-in, the anticipated spud date
for the well is prior to the end of December 2013. 
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. 
`bopd' means barrels of oil per day 
`boe' means barrels of oil equivalent: a unit of energy based on the
approximate energy released by burning one barrel (42 US gallons or 158.9873
litres) of crude oil. 
There are 42 gallons (approximately 159 liters) in one barrel of oil, which
will contain approximately 5.8 million British Thermal Units (MBtus) or 1,700
kilowatt hours (kWh). The value is necessarily approximate as various grades of
oil have slightly different heating values. BOE is used by oil and gas
companies in their financial statements as a way of combining oil and natural
gas reserves and production into a single measure. 
`boepd' means barrels of oil equivalent per day 
`Mbbl' means thousand barrels 
`Mcf' means thousand cubic feet 
`Mmcf' means million cubic feet 
`1P' means Proved Reserves 
`2P' means Proved plus Probable Reserves 
`3P' means Proved plus Probable plus Possible Reserves 
`P2' means Probable Reserves 
`P3' means Possible Reserves 
`PV10'means net present value using an annual discount on cashflow of 10% per
`WI' means Working Interest, a percentage of ownership in an oil and gas lease
granting its owner the right to explore, drill and produce oil and gas from a
tract of property. Working interest owners are obligated to pay a corresponding
percentage of the cost of leasing, drilling, producing and operating a well or
unit. After royalties are paid, the working interest also entitles its owner to
share in production revenues with other working interest owners, based on the
percentage of working interest owned 
For further information visit 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 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 fracking
campaign in 2013. 
-0- Oct/04/2013 06:00 GMT