North Energy Hoping to Benefit from 22nd Offshore Licensing Round (Norway)

North Energy Hoping to Benefit from 22nd Offshore Licensing Round (Norway)

A total of 86 blocks have been put on offer in Norway’s 22nd offshore licensing round. These include 72 in North Energy’s back yard, the Barents Sea. With eight licences already in this part of the Norwegian continental shelf and its head office in Finnmark county, the North Energy ASA is well positioned to explore the new oil province.

 “We see that this licensing round could provide the definitive breakthrough for oil and not least gas activities in our immediate vicinity,” says chief executive Erik Karlstrøm.

“That’s gratifying both for northern Norway and for us. So our whole organisation will be concentrated until the 4 December deadline on the extensive work required for our application. The 22nd round thereby represents our biggest effort so far.”

In connection with the licensing process, North Energy is investing in new databases of the highest quality and has taken the initiative for several seismic surveys. Work on interpreting the acquired data is now in full swing.

The Norvarg partners secured the Leiv Eriksson rig during the second quarter to drill the first appraisal well on this Barents Sea discovery, with spudding scheduled for March 2013. Data from the well will help to strengthen North Energy’s expertise on the area and reduce uncertainty over estimated resources.

Portfolio optimisation

To ensure good risk management and steady activity in the drilling programme, North Energy applies a portfolio perspective to its exploration activities. An agreement was entered into in that context with Dong during May, whereby

North Energy is acquiring 20 per cent of the PL 299 Frode oil prospect in the North Sea and Dong secures 20 per cent of the PL 385 Jette gas/condensate prospect in the Norwegian Sea.

This year’s exploration programme contains two more wells, with one on Jette in PL 385 set to spud in September with Statoil as operator. That will be followed in November by a planned well on PL 498, an oil prospect operated by Lotus.

Second-quarter results

North Energy showed a net loss of NOK 54.4 million in the second quarter of 2012. This reflects a high level of activity during the period, with substantial exploration costs.

The company is solidly financed with an equity of NOK 450.8 million. At 30 June, its net holding of cash and cash equivalents was NOK 243 million, including cash and tax receivable less net liabilities.

Press Release, August 22, 2012

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