Norse Announces Restructuring Agreement

25 April 2013

Norse Energy Corp. ASA ("NEC ASA" or the “Company”, with the ticker “NEC” on the Oslo Stock Exchange, Norway) announces that NEC ASA and certain of its bondholders, convertible lenders and shareholders have reached an agreement (the "Restructuring") that will (i) facilitate a comprehensive restructuring of the group's balance sheet and (ii) provide new funding for NEC ASA. As previously advised NEC ASA, is in default on its existing loans and requires a separate source of funds to sustain operations. Consequently, NEC ASA has for several months been in close dialogue with its creditors and other stakeholders in pursuit of new funding, resulting in the Restructuring agreement.

The Restructuring comprises, among other things, (i) the funding of NOK 7.1 million in a new convertible loan to the Company (the “Convertible Loan”), (ii) conversion of certain unpaid interest under the 5 per cent NEC Convertible Callable Bond Issue 2012/2015 (the “Bond Loan”) into equity in the Company, (iii) certain amendments to the Bond Loan, including a conversion of the NOK equivalent of minimum USD 6 million and maximum USD 15 million of the principal amount of the Bond Loan into equity in the Company , (iv) a conversion of the entire outstanding principal, totalling NOK 21.5 million, of the existing convertible loans into equity in the Company and waiver of accrued interest thereon, (vii) issue of warrants by the Company to the management , and (v) a rights offering of new shares in the Company with gross proceeds of up to the NOK equivalent of USD 10 million.

The Restructuring will be implemented through the following transactions:

Share Capital Reduction:

It will be proposed that an extraordinary general meeting of NEC ASA contemplated to be held no later than 31 May 2013 (the “EGM”) approves to reduce the par value of the shares from NOK 1.20 to NOK 0.075 (the “Share Capital Reduction”). The capital reduction will be done to cover accumulated uncovered losses based on an interim balance sheet as at 31 December 2012. The implementation of the Share Capital Reduction is a condition for the Restructuring.

The Convertible Loan:

The Convertible Loan will be funded by certain existing convertible lenders and shareholders. Principal together with interest of 5% p.a. will be payable at the maturity date, which will be 9 months from the date of funding. The new Convertible Loan will rank pari passu with the Bond Loan with the same security. The Convertible Loan will be issued by the board of NEC ASA pursuant to the authorization to issue Convertible Loan, as granted by the extraordinary general meeting held on 5 July 2012. Funding will take place as soon as possible into an escrow account pledged in favor of the lenders. However, the lenders have agreed that up to USD 700,000 may be drawn immediately from the escrow account in order to fund NEC ASA’s short term obligations. At any time from the date on which the shares to be issued in the Interest Conversion are issued and tradable on the Oslo Stock Exchange to the maturity date, the new convertible lenders shall have the right to (at one or more times) convert the principal amount of the Convertible Loan (in whole or in part) into shares in the NEC ASA at a conversion price of NOK 0.075 per share.

The Convertible Loan will, inter alia, be proposed subscribed by primary insider Bjarte Bruheim (NOK 1,500,000).

Interest Conversion:

The entire amount of unpaid interest under the Bond Loan, which for the purpose of the Restructuring shall be considered fixed at USD 1.05 million, shall be transferred to the bondholders of a single purpose vehicle company which has undertaken (subject to certain conditions) to fund the DIP financing in the USA (as further described in NEC ASA’s stock exchange notices of 11 April 2013 and 6 April 2013). The transferred claim will be converted to equity in NEC ASA at a conversion price of NOK 0.075 per share (the “Interest Conversion”).

Bond Loan Conversion and amendments of the Bond Loan:

USD 6,000,000 of the principal amount of the Bond Loan will be converted into shares at a conversion price of NOK 0.25 per share (the “Bond Loan Conversion”). The remaining outstanding amounts under the Bond Loan will be subject to amended terms and conditions of the Bond Loan agreement, such amended terms and conditions to include waiver by the bondholders to receive interest payments from and including 16 May 2013 to and including 1 April 2014, a first priority pledge over inter-company loans from the Company to Norse Energy Holdings, Inc. (such pledge to be shared pari passu with the Convertible Loan), and an adjusted conversion price of NOK 0.30 per share).

Shareholder Loans Conversion:

The entire outstanding principal amounts totalling NOK 21.5 million of the existing shareholder convertible loan will be converted into shares at a subscription price of NOK 0.25 per share (the “Shareholder Loans Conversion”).

Management Warrants:

The Restructuring includes a proposal for the Company to issue 94,000,000 warrants to the management and employees of NEC ASA, each of which shall (on certain conditions) give the holder the right to require NEC ASA to issue one new share at a price of NOK 0.10 (the “Management Warrants”). The Management Warrants will have a term of five years and will be exercisable from the date one year after the EGM.

Rights Issue:

It will be proposed that the EGM approves a public offering of new shares at a subscription price of NOK 0.25 per share with total gross proceeds of up to the NOK equivalent of USD 10,000,000 and with transferable subscription rights to shareholders as at the date of the EGM (as registered in VPS T+3 days after such date) (the “Rights Issue”). Up to USD 1 million of the gross proceeds shall be used to cover transaction costs and for general company purposes. Any part of gross proceeds exceeding such amount shall be used to repay the Bond Loan.

Guarantee Conversion:

An amount under the Bond Loan of up to USD 9,000,000, less the gross proceeds in the Rights Offering exceeding USD 1,000,000, will be converted into equity at a subscription price of NOK 0.25 per share (the “Guarantee Conversion”).

Conditional lock-up:

All parties to the Restructuring agreement have agreed and accepted that, except in the case of a material adverse effect, no new shares received as part of the Restructuring may be sold at a price lower than NOK 0.30 until the expiry of the subscription period for the Rights Issue. The subscription period for the Rights Issue has not yet been finally determined.

Conditions:

The Restructuring is subject to a substantial number of outstanding conditions, some of which are outside the control of the Company. These conditions include, inter alia , (i) required approvals of the Share Capital Reduction, the Convertible Loan, the Interest Conversion, the Bond Loan Conversion, amendments of the Bond Loan, the Shareholder Loans Conversion, the Management Warrants, the Rights Issue and the Guarantee Conversion by the EGM no later than 31 May 2013, (ii) required approvals by the bondholder meeting under the Bond Loan, (iii) no material adverse effect occurring, (iv) that an offering and listing prospectus will be prepared and approved, (v) final documentation as required to implement the Restructuring, and (vi) that the DIP financing will be accomplished. There are no guarantees that all conditions for the Restructuring will be fulfilled in an appropriate and/or timely manner.

The Company has a significant land position of ~130,000 net acres in New York State with certified 2C contingent resources of 951 MMBOE as of 31 December 2012.

For further information, please contact:

J. Chris Steinhauser, Chief Financial Officer
Phone: +1 713 975-1900 Email: csteinhauser@norseenergy.com

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

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