Loan facility underpins 2008 and 2009 exploration and appraisal activities
Stavanger, 4 February, 2008: Norwegian Energy Company ASA (OSE:NOR), Noreco today signed a 800 million NOK loan facility agreement with Sparebank1 SR-Bank and DnB NOR. The facility will enable Noreco to finance up to 70% of its exploration and appraisal activities on the Norwegian Continental Shelf over the next two years.
- We are now well into our extensive exploration and appraisal programme of 30 wells over 3 years. Two wells have already been completed and another three are ongoing now. The loan facility ensures financing of the majority of this programme at a low cost to the company, says CEO Scott Kerr.
The agreement is a NOK 800,000,000 revolving loan facility and USD 25,000,000 guarantee facility agreement is entered into with Sparebank1 SR-Bank and DnB NOR as lenders and guarantors. The revolving loan facility shall be utilized to finance up to 70% of Noreco's exploration activities in 2008 and 2009. The guarantee facility will be utilized in connection with a drilling contract entered into with Seadrill for the drilling rig West Alpha. The loan and guarantee agreement will be finally completed when customary conditions have been fulfilled.
For further information, please contact:
Scott Kerr, CEO (+47 992 83 890)
Einar Gjelsvik, Vice President Investor Relations (+47 992 83 856)
Notice to editors:
In 2005 the Norwegian State implemented an incentive to increase exploration activity on the Norwegian Continental Shelf. The tax value (78%) of direct and indirect exploration costs for any given year is refunded in cash the next year (normally in December). The loan facility described above bridges the gap between incurring exploration costs and the tax refund from the Norwegian state. A pledge in the tax refund from the state provides lenders with good security, and gives good terms