Norse Energy Corp ASA signed an LOI and Exclusivity Agreement for the potential acquisition of approximately 19,700 acres in the Barnett combo play in Texas.
Norse Energy Corporation ASA has signed a Letter of Intent and exclusivity agreement to acquire substantially all assets of Strategic Petroleum Investment Consultants Enterprise Inc, Paris Oil & Gas Corporation and Eleon Operators LLC (collectively referred to as “Spice/Paris”) for the purchase price of US $70 million.
The purchase price will be paid by issuing US $55 million in NEC ASA shares with the reference price NOK 4.70 per NEC ASA share. US $15 million will be paid in cash, of which US $3 million to be paid upon closing of the transaction, and US $12 million to be a seller’s credit.
The acquisition includes approximately 19,700 acres of oil and gas shale in Texas, with current net after royalty production of approximately 600 boe per day from the Barnett combo play. The Barnett assets to be acquired by Norse includes a 4.1% working interest in 32,500 Barnett acres operated by EOG Resources/EnCana, who are pursuing the same emerging play with good success so far. The acquisition of the Barnett assets provides diversification of commodity, geology, and regulatory regimes.
“We believe that the emerging Barnett combo play represents a great opportunity for Norse Energy. As an early entrant into the most well known unconventional US onshore play, this transaction is attractive from a risk/reward perspective and will be beneficial to our shareholders. I look forward to working with Dr. Kousparis as we develop our Barnett assets,” says Øivind Risberg, CEO of Norse Energy Corporation ASA.
Dr. Dimitrios Kousparis, the President and main owner of Spice/Paris, will remain a full time employee of NEC USA and will be instrumental in continuing to develop the Barnett opportunity.
“My main focus will be the successful execution of an active drill-out program for the Midway and Bellevue acreage in the Barnett. I am convinced that we will see exciting results and create value for the Norse shareholders”, says Dr. Kousparis.
The closing of the transaction is subject to completion of confirmatory due diligence, the execution of a Purchase Sale Agreement, and approval by an Extraordinary General Meeting in NEC ASA, to be held late March.