Noreco divests Brage and Hyme

Stavanger, 24 May 2011: Norwegian Energy Company ASA (Noreco, OSE:NOR) has signed an agreement to sell its shares in the Norwegian oil fields Brage and Hyme to Core Energy.

"It is a strategic priority for Noreco to renew and strengthen the company's production base, and we are currently undertaking a substantial investment program which will add two new producing fields to our portfolio and contribute to significantly higher production and lower unit cost from next year. Brage is one of the oldest fields in our portfolio, while Hyme is a discovery where the development is about to start. The sale of these assets will improve Noreco's financial capacity, and will also lower our investment requirements going forward. In sum we see this transaction as an important step towards a more balanced portfolio and a stronger financial position," says Einar Gjelsvik, CEO in Noreco.

The consideration to Noreco is USD 85 million net of tax with effective date 01.01.2011. In addition a pro et contra settlement will be made upon completion. Noreco may under the agreement receive additional compensation if a Plan for Development and Operations (PDO) for other discoveries in the Hyme license is submitted within six years. The transaction is subject to customary approval by Norwegian authorities.

Brage is an oil field east of Oseberg in the northern part of the North Sea. The field was discovered in 1980 and started production in 1993 from an integrated production, drilling and accommodation platform. Noreco owns 12.3 percent of the Brage field, which is operated by Statoil. Noreco's share of production from Brage in the first quarter 2011 was 2,818 barrels oil equivalents per day.

The Hyme discovery (formerly known as Gygrid) is located in license PL348 in the Norwegian Sea between the Draugen and Njord producing fields. Noreco has an interest of 17.5 percent in the license, and Statoil is the operator. A PDO was submitted 12 May 2011 for a subsea tie-back development to the Njord field, and first oil is scheduled for the first quarter of 2013.

Core Energy is an oil and gas company established with the aim of capturing the value potential in and around producing oil and gas fields on the Norwegian Continental Shelf. The company is backed by the leading oil and gas focused private equity investor HitecVision.

For further information, please contact:
Einar Gjelsvik, CEO (+47 992 83 856)
Kjetil Bakken, VP Strategy & Investor Relations (+47 91 889 889)