Northern Petroleum Plc (NOP.L) announced that it has signed a binding heads of agreement with ATI Oil Plc. Northern currently has a 37.05% shareholding in ATI.
As per the principle terms of the deal, a subsidiary of ATI will assign to Northern Petroleum (UK) Ltd. its entire economic interest in exploration licences G.R17.NP, G.R18.NP, G.R19.NP, G.R20.NP, G.R21.NP and G.R22.NP in exchange for a 1.5% gross overriding royalty over 30% of NPUK's post farmout percentage in the six licences.
Also, a subsidiary of ATI will assign to Northern Petroleum (UK) Ltd. 40% of its economic interest in exploration licence C.R147.NP, reducing its economic interest to 10%.
Further, Northern Petroleum will extend the existing GBP 2 million-loan facility to ATI until December 31, 2011 at a fixed interest rate of 8.125%.
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