Stavanger, [4] November 2013: Reference is made to stock exchange announcement from Norwegian Energy Company ASA ("Noreco" or the "Company", ticker "NOR") on 21 October 2013 regarding its proposed refinancing plan, as well as subsequent releases.

The proposed refinancing remains conditional on i.a. approval by the respective bondholders’ meetings and an extraordinary general meeting, with a 2/3 majority in each meeting. The bondholders’ meetings will be held on 5 November 2013. The extraordinary general meeting will be held on 15 November 2013.

The Company notes that the refinancing proposal remains the only available solution, and that it is currently not aware of any alternative solutions. Any alternative would in any event have to address the severity and urgency of the situation, provide the cash necessary to fund the Company during the period of implementation and maintain an overall balance and robustness that can be acceptable for all relevant stakeholders. In this respect, the Company would therefore remind and inform that:

- Noreco raised NOK 430 million through the previously announced private placement, and has good reason to believe that the planned additional NOK 100 million will be raised through the subsequent offering in December. This equity is raised on the firm condition that, and will only be available if, the bondholders approve the proposed bond restructuring.

- Noreco’s Reserve Based Lending facility (RBL) has in the period from 15 July 2013 been reduced from USD 69.9 million to USD 44.9 million, of which USD 20 million has already matured for payment. Noreco has negotiated a deferred repayment of said USD 20 million until 8 November 2013, on the prospects of approval by the bondholders on 5 November 2013. If said approval is not received, the status of any continued deferral is uncertain. Noreco will not have available cash to repay the full amount on 8 November 2013 and is dependent on obtaining a further deferral. BNP Paribas is agent for the RBL facility which is granted by a syndicate of eight banks and has security in the Huntington license and the group’s Danish assets.

- Noreco has an Exploration Finance Facility (EFF) of NOK 1,240 million, of which NOK 869 million currently is utilized. This facility is only available for funding of exploration in Norway. Noreco will not be able to further utilize said facility unless e.g. an acceptable 12 month budget and business plan is presented. A positive development of the refinancing process is essential in this presentation. SR-bank is agent for the EFF which is granted by a syndicate of five banks and has security in the ordinary tax refund related to exploration in Norway and all exploration licenses in Norway.

- As of today (end of week 44), the Company has approximately NOK 42 million of available cash outside the RBL ring fence. There is also approximately NOK 102 million of cash within the ring fence, but this amount is not available for the parent company or the Norwegian subsidiary, and will not be available to the Danish and Huntington companies unless the RBL is redeemed. Consequently, Noreco is not in a liquidity position to pay the bond interests or the bond and RBL amortizations that are due for payment in November and December. These interests and amortizations are part of the refinancing proposal and the relevant bond interest payments have been requested deferred until December 2013, upon settlement of the new bonds. Furthermore, Noreco is not in a position to pay other operational costs in the second half of November even with deferred interest payments, as the cash outside the RBL ring fence at this time will be negative. The Company is working on, and has good hope to establish a limited bridge financing until final settlement of equity and new bond structure if sufficient support is achieved in the bondholders’ meetings on 5 November 2013 and the extraordinary general meeting on 15 November 2013.

- When preparing and announcing the proposed refinancing, projected available cash has been a key concern for the Company. In its company presentation of 21 October 2013, Noreco estimated a cash buffer of NOK 300-400 million by year end, after and assuming successful refinancing as proposed, and following establishment of security of DKK 500 million for Danish abandonment liabilities. At the end of 2014, after bond amortization as per the terms of the refinancing proposal, Noreco expects the cash buffer to be at the low end of the same range. This estimate has been based on the following assumptions, which are attached with significant uncertainty: (i) oil price USD 100 and NOK/USD exchange rate of 5.75; (ii) Huntington ramp-up from early November towards the end of December 2013, followed by stable production at plateau throughout 2014 at a higher level than has been achieved in 2013; (iii) Siri Fairway expected back on stream in Q2 2014 at reduced volumes until platform is permanently repaired, and production forecasts in line with operator expectations, i.e. gradually declining with depletion of the field. Opex for 2014 is expected to be significantly higher than normal; (iv) Oselvar expected to produce in line with levels seen in the past, but substantially lower than October 2013; and (v) exploration costs based on one well on Verdande, start-up of Xana well in Denmark and one additional well in Norway. At the same time, the terms of refinancing proposal provide for mandatory early prepayments on several events, including i.a. asset sales and receipt of outstanding insurance proceeds.

- Should any of the bondholders' meetings on 5 November 2013 nevertheless fail to approve the proposed refinancing, Noreco’s board will in the current circumstances be forced to promptly initiate preparations for a liquidation of the parent company and possibly other companies in the group in order to preserve value for creditors. Noreco is currently preparing such processes with relevant authorities and legal advisors in relevant jurisdictions. The only way to avoid such steps following a negative decision by one or more of the individual bondholders' meetings would be either shareholders, bondholders or others presenting an alternative refinancing plan as well as providing the necessary cash to fund the Company while implementing such alternative refinancing plan. A failure to approve the refinancing plan and the implications thereof may however also trigger other negative effects and have further unforeseen consequences.

For further information, please contact:
Svein Arild Killingland, CEO (0047 913 40 786)
Ørjan Gjerde, CFO (0047 900 35 738)

This information is subject of the disclosure requirements pursuant to section of 5-12 of the Norwegian Securities Trading Act


About Norwegian Energy Company ASA

Noreco is an independent Norwegian oil company. The company’s focus is to explore, develop and produce oil and gas in the North Sea region. Since incorporation in 2005, the company has grown through license rounds, successful exploration and acquisitions. Noreco operates in Norway, Denmark and United Kingdom, and employs around 70 oil and gas professionals. Noreco is listed on the Oslo Børs (ticker NOR).

For further information, please visit: www.noreco.com

About Us

Noreco is a publicly owned company with focus on the oil, gas and offshore industry. The company's shares are listed on the Oslo Stock Exchange (ticker NOR). For further information, please visit: www.noreco.com.