Cabot Energy Regulatory News (CAB)

Embargoed for release: 0700 on 15 May 2013

Northern Petroleum Plc ("Northern" or "the Company") Audited Results for the Year Ended 31 December 2012

Northern Petroleum Plc (AIM:NOP) is pleased to announce its audited results forthe year ended 31 December 2012.

Richard Latham, Chairman of Northern, commented:

It has been an active year of exploration drilling, production enhancement andproduction testing operations, and the recognition of a major upgrading ofprospectivity in the Southern Adriatic Sea. The need to increase levels ofproduction to meet strategic forecasts was recognised and several materialdevelopments are now possible in the coming months. A decision has been takenthat the Company is prepared to sell some assets and to focus upon newopportunities to achieve faster production growth. After a detailed researching of several alternatives for additionalopportunities to achieve production targets quicker, Alberta was selected. Alicensing start has been made in the north west of Alberta at a low acquisitioncost. A proving programme of three to five well interventions will take placethis summer to establish details for a more extensive programme in the winterseason of 2013 - 2014. This larger programme will be made possible and becommitted to subject to a sale, at a satisfactory price, of all or part of theinterests held in The Netherlands for which we have received approaches and isnow at the letter of intent stage with one of the parties. The licences in The Netherlands were acquired for no cost, we brought fourfields into production, added two new fields, realised substantial cashproceeds from three significant partial asset sales and have now almost fullyrecovered capital investment, at an uplifted value, through production revenue.Although Northern has successfully developed, operated and benefitted fromthese assets, and in time greater production can be achieved, we believe it isnow the right time for us to reposition this part of our business to anotherregion. The timely trading of assets at the right price is our business strategy. Thismove will enable entry into a faster, greater cash generative arena andreplaces the cash flow from The Netherlands so that we continue to help fundother more exciting activities. Part of the proceeds from a Netherlands salewould be invested in Alberta, contingent on successful and encouraging resultsfrom the 2013 summer programme. The current letter of intent provides thatwithout recourse to its existing financial resources, Northern will retainfuture benefits in The Netherlands in certain potential exploration successes,in a field development and the shale oil potential. Until the issue of fraccingunconventional reservoirs becomes clearer, minimal resources will be spent uponthe last of these. Alberta offers the availability of unencumbered new leases, relative ease ofoperation, a competitive cost structure and a defined scope for expansion. Wehave considerable Canadian experience within our Board and key staff have beenhired to rapidly develop this project. Between January and March 2013, 11Canadian Crown leases were acquired covering 9,300 acres, at a direct cost ofCAD$711,000 or approximately €0.5 million. It is estimated that there were 56 million barrels of oil originally in placeon these leases, from which the average recovery to date has been 20%. TheCompany is undertaking a full reservoir engineering examination of thepotential to increase the recovery from known oil in place in well-defined reefstructures. This coming summer, on leases with all season access, a pilotproject will be undertaken on three to five selected wells at an estimatedtotal cost of CAD$1.5 million or approximately €1.2 million. This is beingcarried out to establish additional recovery levels and will provideoperational experience, before commitment is made to a larger winter programmeof operations. There has been an exciting new development in the potential of our explorationefforts in the Southern Adriatic as a result of newly available well data fromEni's producing oil field, Aquila. The Cygnus prospect, within the Group'sadjacent permit, has been shown to be an up-dip continuation of this field,following the interpretation of seismic data, combined with this new wellinformation. The mapping of the Cygnus prospect and Aquila Field may therefore have acombined resource of recoverable oil close to a billion barrels of which 80% iswithin Northern's permit. Not surprisingly this has resulted in a considerablepositive response to the farm-out process. This has coincided with anencouraging move from the Italian government which has now designated oil andgas as an important part of Italy's economic future. Offshore French Guiana, the four well exploration programme alongside Shell,Total, Tullow and Wessex to follow up the 2011 Zaedyus oil discovery iscontinuing apace. The province is very exciting and continues to have highpotential. This was an undrilled exploration play and for a discovery to havebeen made by the first wildcat well is exceptional. The drillship remains onthe licence to drill the next two wells. The exploration teams from all of thepartner companies are building a unique understanding of the oil system and areworking hard to refine the current programme, which may extend beyond the endof 2013. Following the Zaedyus oil discovery, the Northern exploration team wasstrengthened to bring in experience from comparable exploration projects inWest Africa. This has enabled the identification of similar explorationopportunities in unlicensed areas in suitable countries where low cost entrycan be made. Three such opportunities have been identified. One application hasalready been made, another may be made shortly pending examination of furtherdata and one is awaiting a future licensing round in 2014 or 2015. With thisre-positioning of our future exploration activities, careful control overresources will be maintained so as to achieve greater and faster success. Experience has also been gained in understanding shale oil plays as we examinethe potential in the West Netherlands basin. This has led to the seeking of newopportunities and the identification and application for licences elsewhere inthe world. On behalf of the Board, I report that the total revenue for the Group in 2012was €12.4 million (2011: €24.5 million). Annual production net to Northern was0.32 million barrels of oil equivalent (2011: 0.58 million) or 886 barrels ofoil equivalent per day, including deemed production from P12. The averagevolume-weighted gas sales price achieved was €0.29 per normal cubic metre orapproximately US$10 per thousand standard cubic feet. The results for the Groupfor the year show a loss before tax of €0.5 million compared with a profitbefore tax of €10.5 million for the prior year. The basic loss per share is 1.6euro cents, compared to earnings of 6.7 euro cents in 2011. The Group finishedthe year with a cash position of €22.5 million of cash on the balance sheet (31December 2011: €29.8 million).

I would like to take this opportunity to thank the management and staff fortheir hard work and the loyalty of our shareholders. We have put in place aplan to improve our communications and as a business we are moving in the rightdirection to successfully deliver on our strategy.

To briefly summarise,

* we look forward to being able to explore, with partners, the huge potential

in the Southern Adriatic;

* we remain excited about French Guiana where activity continues apace with

good partners to prove up a major new oil province; * we look forward to establishing oil production in Alberta and expanding upon it; * we look forward to successfully increasing exploration activity from working on new areas where ground floor licensing is in progress and bringing in partners to exploit the identified potential; and * importantly, we look forward to being able to repay the faith our

shareholders have had in us and for the market to appreciate the true value

of our Company.

In accordance with the AIM Rules - Guidance for Mining and Oil & Gas Companies,the information contained in this announcement has been reviewed and signed offby the Exploration and Technical Director or Northern, Mr Graham Heard CGeolFGS, who has over 35 years experience as a petroleum geologist. He hascompiled, read and approved the technical disclosure in this regulatoryannouncement. The technical disclosure in this announcement complies with theSPE/WPC standard.

For further information, please contact:

Northern Petroleum Plc Tel: +44 (0)20 7469 2900Derek Musgrove, Managing DirectorKeith Bush, Chief Operating OfficerNick Morgan, Finance Director

Westhouse Securities (NOMAD and Broker) Tel: +44 (0)20 7601 6100Richard Baty - Corporate FinanceIan Napier - Corporate Broking

FTI Consulting Tel: +44 (0)20 7831 3113

Billy Clegg / Victoria Huxster

Bishopsgate Communications Tel: +44 (0)20 7562 3350Nick Rome Notes to Editors: Northern is a full cycle oil and gas company currently holding numerouslicences of low risk areas and is continuing with its strategy of adding andsecuring value for shareholders as it engages with projects at all stages ofthe E&P value chain.

Comprehensive information on Northern and its oil and gas operations, includingall press releases, annual reports and interim reports are available fromNorthern's website www.northpet.com

Highlights 2012 Geographical split: * Reserves by region: Italy: 53.2 million boe

The Netherlands: 12.2 million boe

UK: 4.3 million boe

* Revenue by region:

The Netherlands: € 11.2 million

UK: € 0.6 million

* Capital expenditure by region:

French Guiana: € 3.1 million

The Netherlands: € 2.7 million

UK: € 2.0 million Italy: € 0.8 million Operational:

* A four well follow up exploration drilling programme to the 2011 Zaedyus

oil discovery started in French Guiana in July 2012

* Well intervention and facilities optimisation programmes were successfully

undertaken in The Netherlands

* The assessed prospectivity of the Southern Adriatic was greatly increased

following the release of Aquila oil field well data by Eni and integrated

with the interpretation of 2D seismic acquired in 2011

* In the UK 26th Licensing Round the Company was successfully awarded part

blocks 98/13 and 98/14 offshore the Isle of Wight

* An extended well test of the Markwells Wood-1 discovery well successfully

produced oil Health and Safety:

* The Company successfully maintained a record of no lost time incidents on

its operations throughout the year

Production Highlights:

* Average daily production for the year was 886 barrels of oil equivalent, an

annual total of 0.32 million barrels which includes compensation for deemed

production * The Company maintained a good spread of income generation across eight fields in The Netherlands and the UK

Financial Highlights:

* Revenue and tariff payments totalled €12.4 million, to which P12 production

compensation payments of €1.0 million were added

* Cash on the balance sheet at the year end was €22.5 million and with no

debt the net current assets position was €23.7 million

* The average volume-weighted gas sales price achieved in The Netherlands was

€0.29 per normal cubic metre or almost US$10 per thousand standard cubic

feet Financial Review Financial summary Throughout 2012, the Group's revenue from its producing fields in TheNetherlands was supported by a consistently strong gas price. The averagevolume-weighted gas sales price achieved was €0.29 per normal cubic metre orapproximately $10 per standard cubic foot. In Italy, the La Tosca-1 explorationwell was drilled with minimal cash outlay by the Group. This was achievedthrough the continued successful implementation of the Group's stated strategyof farming out drillable prospects to reduce the Group's capital expenditureexposure. In French Guiana, the Group is in the enviable position of being ableto keep pace financially on a world class, multi-well, deep water frontierexploration programme through its small minority equity position and enjoy thedisproportionate benefits that any success might bring.

The Group finished the year in a good cash position with €22.5 million of cashon the Balance Sheet (31 December 2011: €29.8 million).

Income Statement

Total revenue for the year was €12.4 million (2011: €24.5 million). Annualproduction net to Northern was 0.32 million boe (2011: 0.58 million boe), whichincludes deemed production from the P12 field of 0.03 million boe. The majorityof the decrease in revenue during 2012 was due to the production from thefields in The Netherlands experiencing natural decline. In addition, a numberof shut-in periods were scheduled across the fields to undertake plannedmaintenance and operational enhancements, all designed to maximise therecoverable reserves. An increase in the average gas sales price achieved inThe Netherlands of approximately 10% in comparison to 2011 helped offset thereduction in produced volume for 2012. Two additional factors in the reporting of revenue reduced the total for 2012relative to the prior year. Production at P12, the platform offshore TheNetherlands, was shut in during the first half of the year and is likely toremain so until 2016. This reflects the transportation agreement negotiatedwith the owners of the Medway gas field to allow for the production of gas fromMedway. Northern is being compensated based on an agreed production profile forP12 per the transportation agreement with a cash payment representingproduction, a tariff payment for the use of the P12 facilities and a paymentfor a share of the operating expenditure. While the agreement is effectivelyallowing Northern to be paid as if it was producing gas from P12, no actual gasis being produced by Northern and since there is no current obligation toproduce in the future this net income is recognised in Other Operating Income,except for the tariff income which remains in Revenue. In 2016, once Northernhas received payment for the full forecast production profile, the owners ofMedway will have the option to restart P12 and recoup the compensation paymentsmade to Northern. Any gas produced from P12 in excess of the forecastproduction profile will be to the benefit of Northern. The second key element to the reduction in the revenue line, when compared tothe prior year, is that NAM, has been receiving a portion of the Group's gasproduction for the first time. This payment is as agreed in the original saleand purchase agreement, which provides a revenue stream to NAM following thepayback of certain costs and capital investment in the fields by Northern. Thefinal agreement on the categorisation of certain costs is yet to be finalised;however, the amount deducted for 2012 is based on the expected outcome of thesenegotiations. Even though revenues for the year have decreased, production costs have notdecreased entirely in line. This reflects the ongoing geological analysis onthe fields in The Netherlands and the level of fixed operating costs. Aspreviously announced, the technical review of the discovered fields in TheNetherlands involving the reprocessing of existing seismic and the remodellingof production from existing fields continues and is expected to be completed inthe second half of 2013. Initial findings to date have meant that somerecoverable gas volumes have been removed from the reserves category inrelation to The Netherlands assets. Therefore Dutch 2P reserves at the year end were 12.2 million boe (2011: 18.0million boe), which also takes into account 0.3 million boe of producedreserves in 2012. The net effect of this reduction in reserves is an increasein the depletion, depreciation and amortisation charge of €0.7 million. The increase in total expenses for the year to €4.9 million (2011:€3.4 million)was partly due to a reduced overhead allocation to partners relative to theprior year. Furthermore, a marked increase in new business activities alsocontributed to the loss from operations of €0.3 million. The successful resultfrom the largest of these new business costs was the new country entry for theGroup into Canada, which was announced after the year end in March of thisyear. The results for the Group for the year ending 31 December 2012 show a lossbefore tax of €0.5 million compared with a profit before tax of €10.5 millionfor the year ended 31 December 2011. In addition to the reasons for the changein revenue outlined above, a one off profit booked last year for the sale ofthe Vinkega gas field was the other major contributing factor for the swingfrom profit to loss, year on year. The basic loss per share is 1.6 Euro cents,compared to earnings per share of 6.7 Euro cents in 2011.

No dividend is proposed to be paid for the year ended 31 December 2012 (2011:€nil).

Balance Sheet The value of investments in joint ventures increased during 2012 to €6.6million (2011:€3.6 million). The majority of this increase relates to theexploration costs incurred during the year in relation to the ongoing drillingin French Guiana. The Group's interest is represented by Northpet InvestmentsLimited, a 50% owned investment vehicle. At the year end, current net assets were €23.7 million (2011: €31.3 million)and net assets were €91.7 million 2011 €93.3 million). The Group remained debtfree throughout the year. Taxation The reported tax expense for the Group in 2012 was €1.0 million (2011: €4.3million). This tax charge is almost entirely related to the Group's profitableoperations in The Netherlands offset by an adjustment to deferred tax on theItalian assets acquired from ATI Oil Plc in 2009. Outside of The Netherlandsthe Group has made taxable losses in other countries of operation, but has notrecognised deferred tax assets for these losses as they are not expected to beused in 2013. Shares and Warrants

Due to shares issued upon the exercise of warrants for cash, raisingapproximately €0.3 million during the year, the number of shares in issueincreased by 1,847,500 to 95,365,660, an increase of approximately 2.0% year onyear.

300,000 warrants were issued to new and existing employees with exercise pricesin the range of 66.0p to 85.0p and 1.6 million lapsed or were cancelled.

Therefore overall, at the year end there were approximately 2.8 millionwarrants in issue which represented approximately 3.0% of the issued capital(2011: 6.4%).

Since the year end a total of 140,000 warrants have lapsed.

Accounting policies

These financial statements have been prepared using the same accountingpolicies in 2011. There have been no new or revised International FinancialReporting Standards adopted during the year. Details of the accounting policiesused are included within the accounting policy notes.

Cautionary statement

This Annual Report contains certain judgements, assumptions and forward lookingstatements that are subject to the normal risks and uncertainties associatedwith the exploration, development and production of hydrocarbons. Furtherinformation on some of the key judgements and assumptions can be found withinthe "Critical accounting judgements and key sources of estimation uncertainty"section of the Accounting Policies note. While the Directors believe that expectations reflected throughout this AnnualReport are reasonable based on the information available at the time ofapproval of this Annual Report, actual outcomes and result may be materiallydifferent due to factors either beyond the Group's reasonable control or withinthe Group's control but, for example, following a change in project plans orcorporate strategy. Therefore absolute reliance should not be placed on thesejudgements or assumptions and forward looking statements.

Consolidated Income Statement

For the year ended 31 December 2012

Year Year ended ended 31 31 December December 2012 2011 Notes €'000 €'000 Revenue 12,407 24,531 Production costs (4,255) (5,298) Depletion and amortisation - property, (2,548) (7,116)plant & equipment Cost of sales (6,803) (12,414) Gross profit 5,604 12,117 Pre-licence costs (898) (521) Administrative expenses (4,912) (3,413) Profit on disposal of assets 23 3,108 Other operating income 3 1,143 - Other operating expenses 4 (1,275) (327) (Loss) / profit from operations (315) 10,964 Finance costs (511) (1,033) Finance income 328 579 Share of operating loss of joint (27) (23)ventures & associates (Loss) / profit before tax (525) 10,487 Tax expense (1,042) (4,256) (Loss) / profit for the year (1,567) 6,231 Basic earnings per share on (loss) / 5 (1.6) 6.7 centsprofit for the year cents Diluted earnings per share on (loss) / 5 (1.6) 6.5

cents

profit for the year cents

All results are from continuing activities and are attributable to equityshareholders of the parent.

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2012

Year ended Year ended 31 December 31 December 2012 2011 €'000 €'000 (Loss) / profit for the year (1,567) 6,231 Exchange differences on translation of foreign (317) 527operations Other comprehensive (loss) / income for the year, (317) 527net of income tax

Total comprehensive (loss) / profit for the year (1,884) 6,758

All amounts are attributable to equity shareholders of the parent.

Consolidated Statement of Financial Position

At 31 December 2012 2012 2011 Notes €'000 €'000 Assets Non-current assets Intangible assets 6 36,962 34,694 Property, plant and 7 47,527 47,513equipment Investments in joint 6,621 3,568ventures Investments in associates 90 15and others 91,200 85,790 Current assets Inventories 99 70 Trade and other 9,870 10,608receivables Cash and cash equivalents 22,473 29,794 32,442 40,472 Total assets 123,642 126,262 Liabilities Current liabilities Trade and other payables 4,172 6,278 Corporation tax liability 4,582 2,891 8,754 9,169 Non-current liabilities Trade and other payables 19 24 Provisions 9,434 9,437 Deferred tax liabilities 13,718 14,352 23,171 23,813 Total liabilities 31,925 32,982 Net assets 91,717 93,280 Capital and reserves Share capital 8 5,964 5,855 Share premium 12,553 12,366 Merger reserve 10,289 10,289 Special reserve 28,583 28,583(distributable) Share incentive plan 1,364 3,020reserve Foreign currency (135) 182translation reserve Retained earnings 33,099 32,985 Total equity 91,717 93,280

Consolidated Statement of Cash Flows

For the year ended 31 December 2012

Year ended Year ended 31 December 31 December 2012 2011 €'000 €'000 Cash flows from operating activities (Loss) / profit before tax (525) 10,487 Depletion and amortisation 2,548 7,116 Depreciation - non-oil and gas property, 629 194plant and equipment Profit on disposal of property, plant and (23) (3,108)equipment Foreign exchange gain (190) (244) Finance income (138) (335) Finance charges 511 1,033 Share-based payments 25 199 Expenses settled by issue of shares -

29

Share of operating loss in associate 27

23

Net cash inflow before movements in working 2,864 15,394capital (Increase) / decrease in inventories (29) 56 Increase in trade and other (671) (2,427)receivables (Decrease) / increase in trade and (2,162) 36other payables Net cash inflow from changes in working (2,862) (2,335)capital Taxes (paid) / refunded - 1,913 Net cash inflow from operating 2 14,972activities Cash flows from investing activities Interest received 138 335 Interest paid (87) (312) Purchase of property, plant and (3,119) (3,579)equipment Expenditure on exploration and (1,735) (2,191)evaluation assets Purchase of other intangible assets (815)

(1,184)

Investment in joint venture company (3,155)

(3,012)

Sale of property, plant and equipment 1,002

2,154

Net cash outflow from investing (7,771) (7,789)activities Cash flows from financing activities Proceeds from the exercise of equity 296 923warrants Net cash inflow from financing 296 923activities Net increase in cash and cash (7,473) 8,106equivalents Cash and cash equivalents at start of 29,794 21,430year Effect of exchange rate movements 152

258

Cash and cash equivalents at end of 22,473

29,794

year

There have been no significant non-cash transactions during either year.

Consolidated Statement of Changes in Equity

For the year ended 31 December 2012

Share Foreign Share incentive currency Share premium Merger Special plan translation Retained capital account reserve reserve reserve reserve earnings Total €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 At 1 January 5,768 11,501 10,289 28,583 3,964 (345) 25,611 85,3712011 Total - - - - - 527 6,231 6,758comprehensiveincome forthe year Issue of 87 865 - - - - - 952shares duringthe year -warrants andstaff bonus Equity share - - - - (1,143) - 1,143 -warrantsexercised Share-based - - - - 199 - - 199payments At 31 5,855 12,366 10,289 28,583 3,020 182 32,985 93,280December 2011 Total - - - - - (317) (1,567) (1,884)comprehensiveloss for theyear Issue of 109 187 - - - - - 296shares duringthe year -warrants andstaff bonus Equity share - - - - (1,681) - 1,681 -warrantsexercised Share-based - - - - 25 - - 25payments At 31 5,964 12,553 10,289 28,583 1,364 (135) 33,099 91,717December 2012

All amounts are attributable to equity shareholders of the parent.

Notes to the Group Financial Statements

At 31 December 2012

1. BASIS OF PREPARATION

The financial information set out above does not constitute the Company'sstatutory accounts for the years ended 31 December 2012 or 2011 but is derivedfrom those accounts. Statutory accounts for 2011 have been delivered to theRegistrar of Companies, and those for 2012 will be delivered in due course. Theauditors have reported on those accounts; their reports were (i) unqualified,(ii) did not include a reference to any matters to which the auditors drewattention by way of emphasis without qualifying their report and (iii) did notcontain a statement under section 498 (2) or (3) of the Companies Act 2006 inrespect of the accounts for 2011 and 2012.

Going concern basis of preparation

After consideration of the guidance provided to company directors by theFinancial Reporting Council (FRC) in the document "Going Concern and LiquidityRisk: Guidance for Directors of UK Companies 2009" the Directors consider theuse of the going concern basis of accounting is appropriate for the Companybecause no material uncertainties related to events or conditions that may castsignificant doubt about the ability of the Company to continue as a goingconcern have been identified by the Directors. The Group has a substantial range of projects and opportunities which it coulddevelop in the short to medium term. It is clear that the Group can only fund avery small number of these from its current cash balances, and clearly not thecapital intensive offshore projects. Similar to other oil and gas companies theGroup maintains a degree of flexibility over the timing of the majority of itscapital expenditure. Most of the current projects will only be able to proceedin their development following a successful farm out to other industry partnersor from funds from the successful sale of existing assets, in particular fromthe possible sale of the Company's assets in the Netherlands and the UK.Depending on the respective projects this may not result in immediate newrevenues to the Group, in which case there will be a short to medium termreduction or cessation of cashflows from operations. If the assets in theNetherlands or any other asset is not sold, then the Group will seek to securealternative funds by the end of 2014 to fund planned capital expenditures inthe Netherlands and other opportunities after that time. In addition to seekingfarm in partners the Company's producing assets may also support a lendingfacility secured against attributable production and reserves. While the Group has no external debt and cash resources of approximately €22.5million (2011: €29.8 million) at the year end, the Board recognise that thecost base and structure of the business must be appropriately positioned forefficient use of these funds and the Directors have identified overheadreduction measures. These will bring some immediate cash savings during 2013and 2014. All long term commitments continue to be monitored in order to makesure that no expenditure is incurred which would take the Group's cash balancebelow a level necessary to maintain ongoing operations. Costs and commitmentsare monitored on a frequent basis and more so while the Group is going throughthe current phase of change. Having considered the Group's current activitiesand projected cashflow requirements for the period of at least 12 months fromthe date of approving these financial statements, the Directors believe thatthe Group is well placed to manage its business risks successfully and financeits current commitments. It also recognises that new funds may be needed tofully progress its current projects, pursue new opportunities and secure newproduction revenues. After making appropriate enquiries, the Directors have a reasonable expectationthat the Group has adequate resources to meet all of its commitments and tocontinue in operational existence for the foreseeable future. Accordingly theBoard continue to believe that it is appropriate to adopt the going concernbasis in preparing the Annual Report and Accounts.

2. ACCOUNTING POLICIES

Basis of preparation

The consolidated financial statements have been prepared under the historicalcost convention and have been approved by the Directors in accordance with EUadopted International Financial Reporting Standards (IFRS) and InternationalFinancial Reporting Interpretations Committee (IFRIC) interpretations issued bythe International Accounting Standards Board (IASB), and with those parts ofthe Companies Act 2006 applicable to companies reporting under IFRS. The Grouphas adopted all of the standards and interpretations issued by theInternational Accounting Standards Board and the International FinancialReporting Interpretations Committee that are relevant to its

operations.

Notes to the Group Financial Statements (continued)

At 31 December 2012

The principal accounting policies applied in the preparation of theseconsolidated group financial statements are set out in the 2011 Annual Report.These policies have been consistently applied to all the years presented,unless otherwise stated

2. ACCOUNTING POLICIES (CONTINUED)

Changes in accounting policies

Adoption of new and revised standards

A. In the current year, the following new and revised standards andinterpretations are effective and have been adopted but have had no effect onthe amounts reported in these financial statements.

i. Standards affecting the reported results and financial position

There were no new or revised standards affecting the reported results andfinancial position.

ii. Standards affecting presentation and disclosure

IFRS 7 - Financial Instruments: Disclosure

The IASB issued amendments to IFRS 7 in November 2011. This was effective forannual periods beginning on or after 1 July 2011. The amendments are asfollows:

* to require additional disclosures about transfers of financial assets e.g.

securitisations, so that the user understands the possible effects of any

risks that may remain with the transferor; and

* to require additional disclosures if a disproportionate amount of transfer

transactions are undertaken around the end of a reporting period.

3. OTHER OPERATING INCOME Year ended Year ended 31 December 31 December 2012 2011 €'000 €'000 P12 compensation payment 1,046 - Condensate storage 63 - Other 34 - Other operating income 1,143 - Production from the P12 field was shut in during April 2012 to allow the Danaoperated Medway gas fields to utilise the P12 platform facilities as aprocessing and transport route. Northern is being fully compensated for theloss of production of P12 and the use of the facilities. The P12 field may bebrought back on production when the Medway pipeline permits. .

Notes to the Group Financial Statements (continued)

At 31 December 2012 4. OTHER OPERATING EXPENSES Year ended Year ended 31 December 31 December 2012 2011 €'000 €'000 New business expenses 1,190 327 Business acquisition expenses 85 - Other operating expenses 1,275 327

Other operating expenses comprise new business expenditure and businessacquisition expenses. This includes allocated payroll and other overhead costsincurred during the screening of new opportunities including Canada.

5. BASIC (LOSS) / EARNINGS PER SHARE

Basic earnings or losses per share amounts are calculated by dividing theprofit or loss for the period attributable to ordinary equity holders of theparent by the weighted average number of ordinary shares outstanding during theyear. Diluted earnings per share amounts are calculated by dividing profit for theperiod attributable to ordinary equity holders of the parent by the weightedaverage number of ordinary shares outstanding during the year, plus theweighted average number of shares that would be issued on the conversion ofdilutive potential ordinary shares into ordinary shares. The calculation of thedilutive potential ordinary shares related to employee and director shareoption plans includes only those warrants with exercise prices below theaverage share trading price for each period. 2012 2011 €'000 €'000 Net (loss) / profit attributable to equity (1,567) 6,231holders used in basic calculation Net (loss) / profit attributable to equity (1,567)

6,231

holders used in dilutive calculation Number Number `000 `000 Basic weighted average number 95,067 93,013of shares Dilutive potential ofordinary shares: Warrants exercisable under - 2,227Company schemes Diluted weighted average 95,067 95,240number of shares

The calculation of the diluted EPS assumes all criteria giving rise to thedilution of the EPS are achieved.

Notes to the Group Financial Statements (continued)

At 31 December 2012

6. INTANGIBLE ASSETS

a. Exploration and Evaluation Assets

Intangible assets consist of the Group's exploration projects which are pendingdetermination of technical feasibility and commercial viability of extracting amineral resource. Netherlands United Italy Other EU Total Kingdom €'000 €'000 €'000 €'000 €'000 Cost: At 1 January 2012 15,986 5,270 11,230 195 32,681 Additions 1,296 122 308 52 1,778 Exchange movement - 130 - (2) 128 At 31 December 2012 17,282 5,522 11,538 245 34,587 Exploration expenditurewritten off: At 1 January 2012 99 43 - 28 170 Exchange movement - 3 - - 3 At 31 December 2012 99 46 - 28 173 Net book value: At 31 December 2012 17,183 5,476 11,538 217 34,414 b. IT systems c. Computer software €'000 Cost: At 1 January 2012 2,183 Additions 815 At 31 December 2012 2,998 Depreciation: At 1 January 2012 - Charge for the year 450 At 31 December 2012 450 Net book value: At 31 December 2012 2,548

Notes to the Group Financial Statements (continued)

At 31 December 2012

7. PROPERTY, PLANT AND EQUIPMENT

a. Oil and Gas Assets Netherlands Netherlands UK - UK - Italy Total -Developed -Undeveloped -Undeveloped Developed Undeveloped €'000 €'000 €'000 €'000 €'000 €'000 Cost: At 1 35,130 8,194 849 3,319 17,306 64,798January2012 Additions 1,096 299 4 565 508 2,472 Disposals (12) - - - - (12) Transfers 877 (877) - - - 0 Adjustments (470) - - - - (470) Exchange - - 21 99 - 120movement At 31 December 36,621 7,616 874 3,983 17,814 66,9082012 Depletion andamortisation: At 1 16,970 - 622 - - 17,592January2012 Charge for 2,462 - 86 - - 2,548the year Disposals - - - - - - Exchange movement - - 16 - - 16 At 31 December 19,432 - 724 - - 20,1562012 Net bookvalue: At 31 December 2012 17,189 7,616 150 3,983 17,814 46,752

Notes to the Group Financial Statements (continued)

At 31 December 2012 b. Non-Oil and Gas Assets c. Leasehold Computer Motor Total improvements and office equipment vehicles €'000 €'000 €'000 €'000 Cost: At 1 January 2012 303 898 36 1,237 Additions 20 627 - 647 Disposals - - - - At 31 December 2012 323 1,525 36 1,884 Depreciation: At 1 January 2012 302 616 12 930 Charge for the year 7 163 9 179 Disposals - - - - At 31 December 2012 309 779 21 1,109 Net book value: At 31 December 2012 14 746 15 775 8. SHARE CAPITAL 2012 2011 €'000 €'000 Authorised: 311,316,404 (2011: 311,316,404) ordinary shares of 5p 19,648 19,648each Allotted, issued, called up and fully paid: 95,365,660(2011:93,518,160 ) ordinary shares of 5p 5,964 5,855each

The ordinary shares above all hold the same voting rights and there are norestrictions on the distribution of dividends.

9. APPROVAL BY DIRECTORS

The results for the year ended 31 December 2012 were approved by the Directorson 14 May 2013.

10. ANNUAL REPORT AND ACCOUNTS

The Annual Report and Accounts will be made available shortly in electronicformat on the Company's website, www.northpet.com, and will shortly be postedto shareholders. Following posting, the Annual Report will also be availablefree of charge for a period of not less than one month by application to theCompany Secretary at the Company's registered office being Martin House, 5Martin Lane, London, EC4R 0DP.