Herkimer Gas Field Update
Norse Energy Corp. ASA (“NEC” ticker code OSE – NEC, Oslo, Norway, U.S OTC symbol “NSEEF”)
HERKIMER GAS FIELD UPDATE
Norse Energy announces the completion of its 12 inch plastic pipeline which connects two existing sales points. The new pipeline capacity is 15 000 Mcf per day, with the potential of upgrading for additional capacity. This connection should add significant production growth from our proven Herkimer field which we estimate to yield 0.5 Tcf of gas. The Herkimer field also has the potential to access two additional interstate pipelines both feeding the New York City metropolitan area, which is only 120 miles away.
With this important milestone behind us and the incurred costly infrastructure investment, our focus is on developing our profitable Herkimer play. The last five horizontal Herkimer wells drilled, of which two has been announced in a separate press release, continue to yield economical return exceeding our expectations.
The latest horizontal Herkimer well has an initial flow rate similar to the two wells previously announced on September 18th of one million cubic feet (178 BOE) per day. Given today’s gas price, our payback time is around a year. Drilling cost has come down, and the last two horizontal Herkimer wells will cost us less then one million USD.
Norse has previously estimated average reserves for the Herkimer at 1.2 billion cubic feet (214 000 BOE) per well. The Company has previously announced to have 250 seismically identified locations in the Herkimer formations with a likelihood of direct offset of another 250 locations on the Companys 130 000 acreage located closer to New York City than any other producing gas fields in United States.
Norse Energy has now moved from the exploration phase to a full scale development play with all attention to convert Herkimer resources into producing reserves. The development play with access to pipeline should provide the Company with additional financial flexibility going forward.
Current production is 4 500 Mcf per day with an additional 2 000 Mcf per day awaiting pipeline connection. Our production prior to the Jamestown Medina divestiture was 5 900 Mcf.
Norse Energy’s CEO Øivind Risberg also commented that “...it is comfortable to know that our exploration efforts have proven not only our Herkimer play but have resulted in strong interest in our Marcellus & Utica shale play. Our resource potential of likely more than 2 Tcf of gas close to New York City, the highest priced gas market in the United States, and with access to three interstate pipelines, has attracted a lot of interest from industrial E&P company’s looking for an entry to the shale play. The Company is well positioned to take advantage of the strong industrial asset market we have seen in the USA but also in Brazil.”
Norse Energy Corp. is a Norwegian based publicly listed company with its focus on energy operations offshore Brazil and in the Appalachian Basin U.S., concentrating primarily in the states of New York and Pennsylvania.
For further information please contact:
Anders Kapstad, CFO
Tel.: +47 6751 6112
Cell: +47 918 17 442
S. Dennis Holbrook, U.S. Investor Relations
Tel.: + 1 (716) 568-2048