First Quarter Report 2011
Norse Energy Corp. ASA ("NEC" ticker code OSE - NEC, Oslo, Norway, U.S. OTCQX symbol "NSEEY") and its subsidiaries ("Norse Energy" or "the Company") reports revenue of USD 0.949 million and EBITDA of USD -4.6 million for the quarter.
First Quarter Highlights
The Company successfully completed a Private Placement of USD 30 million of equity on 25 March. An Extraordinary General Meeting of Shareholders approved the Private Placement on 15 April. A Prospectus for the shares issued in the Private Placement was approved 19 May. The subsequent repair offering directed to investors not participating in the Private Placement was cancelled on 27 May.
The Company executed Purchase and Sale Agreements (“Agreements”) to sell certain of its midstream assets to Appalachian Transportation and Marketing LLC (“Appalachian”) for a total consideration of USD 20.7 million.
As a direct result of the New York State Governor’s Executive Order #41 prohibiting the New York Department of Environmental Conservation (“DEC”) from issuing high volume hydraulic fracturing permits to drill shale wells in New York State, the Company in early January gave a notice declaring force majeure to its landowners in order to preserve its acreage position.
The first five wells drilled on 3D seismic delivered an average thirty day initial production rate (IP-30) exceeding 1,300 Mcf/d. The Company resumed drilling in May following a seasonal suspension for spring thaw.
The Company’s year-end reserve and economic evaluation, prepared by Schlumberger, reported a 5% increase in 1P reserves; 2C reserves remain unchanged at 3.9 Tcf when compared to 2009.
Subsequent Events
An employee of a contractor suffered a fatal work incident on a Company well site in May. Norse Energy has worked closely with the contractor and the involved authorities to ensure that the cause of this accident was understood before site preparation was resumed.
Regulatory approval for the sale of Norse Pipeline was received on 19 May 2011.
Key Figures
E&P gross production was 7,186 Mcf/d (1,281 BOE) in Q1-11, an increase of 13% from 6,335 Mcf/d (1,129 BOE) in Q4-10 and down 6% from 7,612 Mcf/d (1,357 BOE) in Q1-10.
E&P net sales production was 5,008 Mcf/d (893 BOE) in Q1-11, a decrease of 3% from 5,172 Mcf/d (922 BOE) in Q4-10 and a decrease of 23% from 6,491 Mcf/d (1,157 BOE) in Q1-10. The decrease in net production while gross production increased reflects the joint venture partners’ net revenue interest in the producing wells.
EBITDA for the first quarter was USD -4.6 million compared with USD -1.7 million in Q1 2010. EBITDAX for the first quarter was USD -3.8 million compared with USD -0.5 million in Q1 2010.
Please find attached the first quarter report and the investor slide presentation. The presentation will be broadcasted live from Shippingklubben in Oslo on May 30 from 08:30, and can be seen using the following link: http://www.serialive.com/watch.php?id=13890
For further information, please contact:
Richard Boughrum, Chief Financial Officer
Cell: +1 714 520 1702
Email: rboughrum@norseenergy.com