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14 January 2013 Proforma Schedule 1 Pre-Admission Announcement
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NORTHCOTE ENERGY LIMITED - Operational Update

NORTHCOTE ENERGY LIMITED - Operational Update

PR Newswire

 Northcote Energy Ltd / Index: AIM / Epic: NCT / ISIN: VGG6622A1057 / Sector:
                                   Oil & Gas

13 March 2013


              Northcote Energy Ltd (`Northcote' or `the Company')

                      Operations Update & Issue of Equity

Northcote (AIM: NCT), an onshore US oil and gas exploration and production company, is pleased to provide a positive update regarding its operations in Oklahoma, where it produces from the proven Mississippi Lime and Layton formations.

Highlights

  * Progress achieved across all three areas of the Company's project portfolio
    which has a P1 PV10 of US$47.6million

  * Horizon Project in Osage County:

  *
      + First fracture stimulation at the Big Hill 1H-12 ("Big Hill #1") well
        expected to commence in the week beginning 18 March 2013 - preparation
        milestones met with necessary water volumes being procured locally

      + Second fracture stimulation targeting the Big Hill 2H-12 ("Big Hill #2)
        well to follow Big Hill #1

      + Burkhart #1 has reached target depth of 4,226 feet and intercepted oil
        shows in multiple objectives. Evaluating completions in Viola and
        Mississippi Lime formations

      + Solid progress on Little Drum unit workover programme - completion of
        salt water disposal pipeline system expected in next 30 days to
        substantially lift oil and gas production rates

  * Bird Creek Project in Osage County:

  *
      + Bray #1 well has successfully reached target depth of 1,820 feet with
        good oil shows across 10 feet of pay from 1,704 to 1,714 feet

      + Keese #1 well being permitted with drilling expected to commence in the
        next four weeks

      + Better of these two wells to be completed as producer and second well
        as a salt water disposal well

  * DeAgua Project in Woods County:

  *
      + Completion of salt water disposal well to service the Busse #1H and the
        Bouziden #1H-17 with production expected to commence in April 2013
       

Northcote's Chief Executive Officer Randy Connally said, "The forthcoming commencement of Northcote's first fracture stimulation programmes at the Horizon Project signals an exciting time in the Company's development, which we are confident will result in substantially enhanced net production and group revenues. Fracture stimulation can initially increase the productivity of a previously untreated well by 2 to 30 times, and with this in mind, we look forward to announcing the outcome of these initiatives after production volumes have stabilised.

"We have already substantially increased production at Horizon having recently exercised an option to increase our working interest in the Horizon Project to 37.5% combined with the receipt of positive results from workover programmes at the project. We believe that this success, along with our decisions to deepen and drill wells across our entire Oklahoman portfolio and the range of corporate and acquisition opportunities currently available to the Company, bodes well for Northcote as we focus on exceeding our production targets for our first year of listing."

Horizon Project, Osage County: (average 37.5% working interest)

The fracture stimulation of the Big Hill #1, the first of two programmes targeted for this well and the Big Hill #2 well, is expected to commence during the week beginning 18 March 2013. The Big Hill frac tank liner project is now complete and the necessary water volumes are currently being procured from local sources. Results from the fracture stimulation will be announced in due course on the first 30 day average production rate after injected water volumes have been recovered. This usually occurs around 35 to 45 days after stimulation.

Northcote intends to utilise hydraulic fracturing techniques in relation to the unfracked horizontal wells on the Horizon Project as part of its strategy to significantly increase production. Hydraulic fracturing is the primary choice for enhancing production, and typically has the effect of increasing productivity 2 to 30 times compared to an untreated well, by increasing the amount of contact that the well bore has with high quality reservoir rock. Northcote's average working interest in the 10 wells currently producing in the Horizon Project is 37.5%.

The workover programme was initiated based on the evaluation of wells and bottomhole pressure tests run in December 2012 in preparation for the fracture stimulation programme. Whilst the work programme contained in the CPR in the AIM Admission Document detailed Steele 2-1 1H and Sarah (MS1) as being the initial two wells targeted for fraccing, the focus now is on fraccing Big Hill #1 and Big Hill #2 first, with further fracs to follow dependant on the results of these initial two. As part of the evaluation of wells, it was determined that Northcote could materially increase production from wells that were not part of the planned four well fracture stimulation programme through a workover programme that consisted of, depending on the well, increasing water disposal capacity, re-acidizing, pumping down fluid levels and in some cases installing larger submersible pumps.

In line with this, the workover programme on Little Drum unit is progressing well with the completion of a salt water disposal pipeline system expected in the next 30 days. This will enable disposal of substantially increased water volumes and, based on the relationship between water and hydrocarbon production in these assets, substantially higher oil and gas production rates.

Additionally, the Burkhart#1 well has successfully reached its target depth of 4,226 feet. This was an existing well that was originally drilled to and produced from the Mississippi Chat formation. As announced on 20 February 2013, the decision was made to deepen it to evaluate further formations. The well intercepted oil shows in multiple objectives and the Company is now evaluating completion options in the Viola and Mississippi Lime formations. Further information will be provided at the appropriate time. Northcote has a 3.69% working interest in the well.

Bird Creek Prospect, Osage County: (average 3.125% working interest)

As announced upon acquiring a 3.125% working interest in the Bird Creek Project on 20 February 2013, the Company is participating in the drilling of two wells in H1 2013. The Bray #1 has been drilled to target depth of 1,820 feet with good oil shows across 10 feet of pay from 1,704 to 1,714 feet. The Company now plans to drill the Keese #1 well which is currently being permitted and drilling is expected to begin later in March/ April 2013. Once the Keese #1 is drilled to target depth, the better of the two wells will be completed as a producer and the other well will be completed as a salt water disposal well to support future production.

DeAgua Project, Woods County: (average 0.348 % working interest)

The salt water disposal well to service the Woods County wells, the Busse #1H and the Bouziden #1H-17, is complete. These wells will be added to production starting this month and the production rates will be announced in due course.

Issue of Equity

In addition, further to the announcement made on 13 February 2013, with respect to the exercise of an option to increase its interest in the Horizon Project, Oklahoma, Northcote has now applied for 23,508,138 new Shares to be admitted to trading on AIM with admission expected to commence on 15 March 2013. Following the issue of the new Shares, the Company's issued share capital now consists of 890,412,716 Shares.

As detailed on 13 February 2013, Horizon is now the holder of 85,025,917 fully paid Shares representing approximately 9.55 per cent. of the enlarged issued share capital of the Company and WCR is the holder of 5,424,955 fully paid Shares representing approximately 0.61% of the enlarged issued share capital of the Company.

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.


                                   **ENDS**

For further information and the full Admission document visit www.northcoteenergy.com, see below or contact the following:

Randy Connally         Northcote Energy Ltd        +01 214 675 7579

Ross Warner            Northcote Energy Ltd        +44 (0) 7760 487 769

Dan Jorgensen          Northcote Energy Ltd        +44 (0) 20 7024 8395

Roland Cornish         Beaumont Cornish Ltd        +44 (0) 20 7628 3396

James Biddle           Beaumont Cornish Ltd        +44 (0) 20 7628 3396

Jerry Keen             Shore Capital Stockbrokers  +44 (0) 20 7408 4090
                       Limited

Bidhi Bhoma            Shore Capital Stockbrokers  +44 (0) 20 7408 4090
                       Limited

Hugo de Salis          St Brides Media and Finance +44 (0) 20 7236 1177
                       Ltd

Elisabeth Cowell       St Brides Media and Finance +44 (0) 20 7236 1177
                       Ltd

Notes:

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 fracking, 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.

The Horizon Project, Osage County Oklahoma

Northcote's interests in Osage County comprise working interests in 10 producing wells, of which nine are unfracked horizontal wells producing from the Mississippian formation and one is a vertical well producing from the shallower Layton formation (Burkhart #3).

The workover programme was initiated based on evaluation of wells and bottomhole pressure tests run in December 2012 in preparation for the fracture stimulation programme. As part of the evaluation of wells, it was determined that Northcote could materially increase production from wells that were not part of the planned four well fracture stimulation programme through a workover programme that consisted of, depending on the well, re-acidizing, pumping down fluid levels and in some cases installing larger submersible pumps.

Northcote intends to utilise hydraulic fracturing techniques in relation to the unfracked horizontal wells. Hydraulic fracturing (`fracking') is the primary choice for enhancing production, and typically has the effect of increasing productivity 2 to 20 times compared to an untreated well, by increasing the amount of contact that the well bore has with high quality reservoir rock.

The Company has commenced an evaluation of a number of low cost opportunities to develop other prospective formations on Northcote's existing lease portfolio and other properties. As with the successfully producing vertical Burkhart #3 well, new well opportunities are targeted based on information obtained through the on-going Mississippian programme and are undertaken only in situations where Northcote believes the well will generate compelling economics to Northcote shareholders.