The agreement, which has been signed in respect of its Cascina Alberto permit, also includes the agreed terms of a joint operating agreement.
As per the agreed terms, the company will farmout 80% stake in the Cascina Alberto permit and transfer operatorship to Shell.
Shell will carry Northern Petroleum for the costs of the exploration campaign, which will include a carry on the acquisition of any new seismic until the seismic costs reach $4m and a carry on any exploration well until the well costs reach US$50m, according to the company.
It will also have a pre-emptive right over Northern Petroleum’s remaining stake in Cascina Alberto permit.
Northern Petroleum CEO Keith Bush said: "This farm in demonstrates the value inherent in Northern’s Italian asset portfolio. Northern will continue to progress its permits and applications with the Italian authorities and partner with companies with larger resources, where appropriate, to maximise their value.
"We look forward to working with Shell as we explore the potential of the Cascina Alberto permit."
