The Siri area fields (Siri, Nini and Cecilie) have been off line since the shutdown of the Siri platform on 31 August. The operator, DONG, is currently working on a temporary solution to stabilize the platform's water buffer tank, where cracks have been observed, and bring the field back on stream. Based on updated information on analyses and on schedule for manufacturing of the lifting gear, the operator now expects the production to start in December (previously expected to start in November). The delay does not impact Noreco's production guidance for 2009 of 10,500 - 11,000 barrels per day. The start-up is conditional upon approval from certifying and governmental bodies and on weather conditions during the installation of the temporary solution. Once a temporary solution is in place, work on a more permanent solution will commence.

 

Prior to the production shutdown at Siri, the field was producing 10,000 barrels per day gross, while the total production over the Siri platform was in the order of 13,500 barrels per day gross. The shutdown is not expected to have any adverse effect on the reservoir or field reserves.

 

While the restart of production from Siri is being prepared, the Mærsk Resolute drilling rig continues to drill Nini East development wells as planned. The first producer has been completed with a very promising production potential. The second well, a water injector, is expected to be completed in November. Nini East production and water injection will be ready for startup when the Siri facilities are available in December.

 

Under its group energy insurance package Noreco has cover for inter alia business interruption, subject to a retention period of 60 days and an overall limit of 12 months. Thus, provided there is found to be cover under its policy Noreco will for any period of resulting production loss in excess of 60 days receive an insurance payment of USD 50 per barrel of crude not produced. In addition, the business interruption cover also provides coverage for costs associated with acts aimed at mitigating a production loss, such as temporary/provisional measures to restart production. The loss adjuster is currently processing the claim. Although Noreco is hopeful of cover, it is at this stage premature to attempt to draw any definite conclusion until the investigations into the cause of the damage has been completed.

 

On the Brage field, the production has been better than expected in October, with continued strong performance from the Bowmore well, combined with higher than planned gas export. The Brage Fensfjord well was completed and put on stream on 5th of October. The well has produced at rates up to 5,000 barrels oil equivalents per day (boed) gross in October. The Brage field was producing at rates exceeding 39,000 boed gross at the end of October. The drilling of the next infill well has now started, and is expected to start production in Q2 2010.

 

The South Arne field produced 25,000 boed in October. The increased production level is a result of several successful well workovers in 2009.

 

The Lulita field was shut down in October. Several operational problems related to restart of the Harald facilities have been experienced and these have delayed start-up of production. Restart of production is expected shortly.

 

The net realized price was USD 72 per barrel in October, and reflects Noreco's oil price put options at USD 50 and USD 75 per barrel as well as adjustments for inventory and NGL and gas prices. The production volumes and prices are preliminary and are subject to adjustments, including final allocations between fields, quality adjustments and prices.

Contacts:

Scott Kerr , CEO (+47 99 28 38 90)

Einar Gjelsvik, Vice President Strategy & Investor Relations (+47 99 28 38 56)