Savio 1x well, located in the prolific gas producing area of Emilia Romagna in the Po basin, encountered thicker than expected sandstone formations but examination of the electric logs suggests that the gas contained in them is insufficient to warrant testing.
The drilling operations are expected to have been performed at less than the budgeted costs even though the well was drilled an extra 280 meters (919 feet) deeper than planned. Planning of the lower risk wells on the Cerasa and Longastrino licences is in progress.
Northern Petroleum reduced its business risks and the call upon its cash balances through a farmout agreement with Avobone Italy S.r.l. (Avobone), a member of the Indofin Group.
Avobone paid 40% of the well costs, with the licence interests held as follows:
Northern Petroleum has 80% stake and Avobone has 20% share in the well.
A subsidiary of ATI Oil Plc (ATI Oil) currently has a commercial interest equal to half that of Northern Petroleum. ATI Oil is the subject of an Offer by Northern Petroleum announced on April 3, 2009.
Derek Musgrove, managing director, stated:
“The Savio well was the first of Northern’s three well programme in the Po Valley. Wells on the Cerasa and Longastrino licences are at the planning design stage. Drilling is also currently underway at Nieuwendijk, which together with Tiendeveen, forms a two well exploration drilling programme in the Netherlands quite separate to our six oil and gas field development projects. We must now look forward to short term success in those wells”.
