Norse Announces Conversion of ~ $3.5 Million of Bonds to New Shares At 21% Premium to Market

 

Norse Energy Corp. ASA (“Norse”, with “NEC” ticker Oslo Stock Exchange, Norway; “NSEEY” ticker U.S. OTC) announces that it has acquired from DCF Capital bonds in NEC 04 at nominal value NOK 6,800,000 and bonds in NEC 02 at nominal value USD 2,400,000 plus cash payment of incurred interest of NOK 631,696.50.

Further, DCF Capital and Norse have entered into an agreement where DCF Capital subscribe for a total of 53,120,000 new ordinary shares in Norse (“the New Shares”) as consideration for the repurchase of the bonds as described above. The equity issue will be executed by conversion of DCF Capital’s claim on Norse from the sale of the bonds (the purchase price for the bonds exclusive of interest) into shares in the planned capital increase in Norse.

The New Shares has a nominal value NOK 0.3688 per share and is subscribed at a subscription price of NOK 0.40 per share giving a total subscription price of NOK 21,248,000.00. The subscription price represents a 21% premium to the closing price for the Norse shares at the Oslo Stock Exchange on 6 January 2012. The New Shares are issued under the power of attorney granted the Board of Directors of Norse in the Extraordinary General Meeting on 22 November 2011.

Norse previously advised by a press release dated January 3, 2012 that it has entered into a definitive agreement to sell acreage and overriding royalty interests for cash consideration of USD 26.7 million to undisclosed and unrelated buyers. Norse received USD 21.7 million as the first installment with the remaining cash consideration of USD 5 million to be held in escrow for confirmatory due diligence no later than 31 March 2012.

Under the terms of the existing bond agreements there is a sharing arrangement to redeem bonds at par value for 50% of net proceeds in excess of USD 10 million. USD 13.75 million of the proceeds has been used to pay down existing secured debt. After paying transactional fees of approximately USD 1 million, Norse does not anticipate applying any net proceeds to redeem bond debt under these bond agreements, unless and until the escrow funds are disbursed.

“Transactions such as our recently announced asset sale coupled with this conversion of debt to equity are helping to strengthen Norse’s financial condition”, commented Norse CEO Mark Dice. “We welcome a new major shareholder in DCF Capital”, concluded Dice.

The Company retains a significant land position of approximately 160,000 net acres in New York State of which approximately 110,000 net acres are in the Marcellus and Utica shale fairway in Central NY. This press release is a disclosure under the Norwegian Securities Trading Act Section 5-2 and the applicable listing rules of the Oslo Stock Exchange.

For further information, please contact:                                                                                                                                                                                                                                                  
J. Chris Steinhauser, Chief Financial Officer
Phone: +1 716 568-2048 Email: csteinhauser@norseenergy.com

S. Dennis Holbrook, Chief Legal Officer                                                                           
Cell: +1 716 713-2489 Email: dholbrook@norseenergy.com