Outlook: Production-led growth
By exiting the Netherlands and refocusing on Canada, Northern has addressed the single fundamental issue affecting share price performance in recent years, a lack of operational progress across its key asset base. The investment thesis is now much stronger with a new board, €26m in cash and a tangible development programme in North West Alberta, while investors can retain option value in Italy and further afield. The story does not come without its challenges, specifically funding in H215 to progress Canada at a sensible rate, and navigating a potentially complicated farm-out process as well as regulatory approvals to drill offshore Italy. However, we consider the current share price is underpinned by only phase one of the Canada programme, so everything else is currently in for free.Northern Petroleum is an oil and gas exploration and production company, engaged in the exploration for, and development and production of, oil and gas reserves, and other related activities. Co.'s assets are located in: Canada, an onshore light oil production project base in north west Alberta, Canada; in Italy, with both onshore and offshore permits and applications containing exploration prospects and oil and gas discoveries, focused offshore in the southern Adriatic and onshore in the Po Valley region; and in Australia, an onshore exploration permit in South Australia comprising 1,400,000 acres in the Otway basin. At Dec 31 2016 Co. had reserves of 1,420,000 barrels of oil equivalent.
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