Noreco pulls out of Norway transaction

Offshore staff

STAVANGER, Norway -- Norwegian Energy Co. (Noreco) has decided not to sell its interests in the Oselvar and Enoch fields offshore Norway to Marubeni Corp.

The two parties entered into an agreement for the sale last September 2010. However, earlier this month the Norwegian authorities revealed that Marubeni had not fulfilled the requirements to become a licensee on the Norwegian continental shelf, and this situation still applies.

"The Oselvar development is progressing according to plan and the strong improvement of market fundamentals has contributed to a significant increase in the value of the field,” said Noreco's CEO Einar Gjelsvik.

“Noreco therefore sees the decision to terminate the agreement with Marubeni as accretive to shareholder value, and the company will continue investing in the Oselvar field development. The remaining investment cost is expected to be financed with new debt."

Oselvar is an oil and gas field under development by DONG Energy in licenses PL274 and PL274CS in the southern Norwegian North Sea. Noreco has a 15% interest in the field, representing reserves of 8.1 MMboe.

Production is due to start during the first half of 2012, later than planned due to rescheduling of installation works on BP’s host Ula platform.

Enoch is an oil field straddling the North Sea median line between Norway and the UK. Noreco has 4.36% of this field via a 21.8% share in license PL048D.

03/29/2011



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