Northcote, an onshore US oil and gas exploration and production company, has signed an agreement with NAPP to acquire the entire issued share capital of NAPP’s wholly owned US subsidiary, NAP USA.
The acquisition significantly enhances Northcote’s field level cash flow, lease acreage and net production, providing the enlarged company with a robust platform for future production and cash flow growth even during times of oil price weakness. The acquisition provides the company with a 100% increase in working interest from 35% to 70% at Shoats Creek and a 55% increase in working interest from 55% to 85% at Zink Ranch.
Acquisition is conditional on NAPP shareholder approval at forthcoming NAPP General Meeting and certain other conditions including the raising of a minimum amount of GBP 1M to provide full settlement of the outstanding Darwin Strategicloan note of GBP 1.05M between signature and closing. This will be achieved through asset sales and equity and/or debt. The disposal process of certain non-core assets is underway to pay down Darwin and fund ongoing work on core company assets. Furthermore, on closing, NAP USA’s non-core assets are also expected to be sold.