(MENAFN- ProactiveInvestors)Northcote Energy Ltd (LON:NCT) has unveiled two transactions that it says will accelerate the development of the Shoats Creek project in Louisiana. First Northcote has agreed to sell a 50% working interest (which equates to 36% net revenue interest or NRI) in the most recently drilled well at the project - Lutcher Moore 20 - to Gulf Coast Western Inc a privately-owned Dallas based company. Gulf Coast Western will also have the right to participate with a 25% working interest (18% NRI) in future wells that target the Frio and Cockfield formations at the property. Northcote gets US$500000 of cash in return and it will also benefit from a 10% carry on the cost of the next four wells as well as a new royalty. A second deal will see Northcote acquire an additional interest (20% WI 14.4% NRI) in the project's Cockfield play. This deal is with Northcote's partner and the operator of the project Shoats Creek Development Inc (SCDI). To complete the transaction Northcote is issuing US$67000 worth of shares to SCDI. It says the new arrangement will realise US$30000 per month of savings to US general and administrative costs. Randy Connally Northcote managing director described the changes to the company's ownership in the project as 'right-sizing'. 'Many of the high impact opportunities and initiatives within our portfolio which provide Northcote with diversified upside and revenue potential will benefit greatly from these transactions as the company can now contemplate allocating financial and managerial resources to them where we could not while we had responsibility for funding 70% of the capital costs at Shoats Creek Field' he said. 'I would like to add that in entering into this transaction with us GCW has shown a great vote of confidence in the potential of the Shoats Creek Field and for the organisation we are building. 'This is particularly true given that there are no shortage of US companies and operators looking for project funding in the current environment.' Additionally the company told investors it is now in talks with engineering firms to potentially commission a new competent person's report that would reflect improvements at Shoats Creek since Northcote acquired the project and drilled the Lutcher Moore 20 well.
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