Norse Energy Corp. ASA to complete demerger with listing of Panoro Energy ASA (formerly New Brazil Holding) on June 8, 2010

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Norse Energy Corp. ASA (NEC ASA, OSE ticker code "NEC", U.S OTC symbol "NSEEY") yesterday received approval from Oslo Stock Exchange to list its subsidiary Panoro Energy ASA  (OSE ticker code “PEN”) and will therefore execute the resolution to demerge the company into two business units. The shares in Panoro Energy ASA will be traded separately as of Tuesday June 8, 2010, from when the shares in already listed NEC will trade exclusive of Panoro Energy ASA. A listing prospectus is expected to be issued shortly and prior to the listing. 

“This marks the conclusion of a long process to create two separate and distinct business units that we believe will be better positioned to achieve their growth objectives and create value for the shareholders. In NEC we now look forward to devote ourselves to the development our large existing resource base in Appalachia and to evaluate M&A growth opportunities in unconventional onshore oil and gas assets in North America”, says CEO Øivind Risberg in Norse Energy Corp. ASA. 

“This marks the beginning of Panoro Energy, which will be a South-Atlantic focused independent E&P Company positioned to take advantage of growth opportunities in this exciting region. The region represents fast growing, emerging markets with resources and opportunities for a company like Panoro Energy. We have the experience and competence to succeed and look forward to getting started”, says CEO Kjetil Solbrække in Panoro Energy ASA. 

The demerger of NEC was approved by an extraordinary general meeting on January 28, 2010, and was contingent also on the approval by the Oslo Stock Exchange of a separate listing of Panoro Energy ASA. 

Please see below for an overview of the number of shares and changes in the number and exercise price of options and warrants as a result of the demerger. 

For further information, please contact:

Anders Kapstad, CFO  
Tel: +47 23 01 10 01
Cell: +47 918 17 442
Email: akapstad@norseenergy.com

Jonas Gamre, Investor Relations
Tel: +47 23 01 10 02
Cell: +47 971 18 292
Email: jgamre@norseenergy.com 

Shares: Each shareholder in NEC ASA will retain a shareholding in NEC ASA and in Panoro Energy in proportion to their shareholding in NEC ASA at the closing of trading at the Oslo Stock Exchange on Monday, June 7, 2010. After the completion of the demerger, NEC ASA will still have 468 million shares, whereas the number of shares in Panoro Energy ASA will be 46.8 million after a 10:1 reverse split. Panoro Energy ASA will in connection with the listing register shares for USD 28 million of the USD 65 million equity issue announced March 15, 2010. Following this the new number of shares in Panoro Energy will be approximately 61.2 million.

The demerger entails certain changes with respect to the number and/or exercise price of options and warrants outstanding in NEC ASA and Panoro Energy ASA, respectively:

Options: The Compensation Committee of NEC ASA has resolved the following regarding the Company’s option programs: For the 2006 option program, option holders of NEC ASA maintain the number of options but the exercise price of the options has been reduced to 60 percent, in line with the valuation split between NEC and Panoro Energy as set out in the demerger plan as of December 21, 2009.

As consideration for the spin-off of the Brazilian entity, the option holders under the 2006 plan have received cash settlement for the option value of the remaining 40 percent, using the Black Scholes Option Pricing Model. The total number of options issued under the 2006 program is 5,940,000 options after cancellation of 1,500,000 options.

For the 2009 option program, option holders of NEC ASA have had the exercise price of their options reduced to 60% of the original exercise price, and received an additional 0.667 option per initial option (1/0.60-1) as consideration for the spin-off of the Brazilian entity. The number of options under the 2009 program has increased from 5,975,000 options to 9,625,000 options.

The total amount of outstanding options in NEC ASA after the demerger will be 15,565,000 options out of authorized 17,500,000 under both programs.

Furthermore, the Board of Directors of NEC ASA has resolved to extend the maturity on 2,000,000 options granted to CEO, Øivind Risberg with one year, from May 31, 2010 to May 31, 2011 with the same original strike price, adjusted for the demerger.

Following this, primary insiders of the Company hold 11,900,000 options:

• Øivind Risberg, 4,000,000 options with average exercise price of NOK 2.42
• Mark Dice, 4,166,667 options with average exercise price of NOK 2.10
• Richard Boughrum, 1,666,667 with average exercise price of NOK 2.38
• Dennis Holbrook, 833,333 with average exercise price of NOK 2.01
• Stu Loewenstein, 666,667 options with average exercise price of NOK 2.18
• Steve Novakowski, 566,667 options with average exercise price of NOK 2.22 

Warrants: The original strike price of the NEC-J warrants was NOK 6.10, which NEC ASA and the Norwegian Trustee has agreed to adjust to NOK 6.09 due to the effect of the shares issued in the NOK 38.6 million repair issue in March, 2010. The NEC-J warrants mature July 14, 2011.

Upon the demerger of the company, NEC ASA will still have 75 million (NEC-J) warrants outstanding, whereas Panoro Energy ASA will issue 7.5 million warrants after the 10:1 reverse split of the shares.

The strike price for the warrants in NEC ASA and Panoro Energy ASA, respectively, will be decided based on the relative share price performance of NEC ASA and Panoro Energy ASA for the five first days of trading after the listing of Panoro Energy ASA (5-day volume weighted average price). The 7.5 million warrants to be issued in Panoro Energy ASA will thus be issued when a strike price has been established five days after the company’s shares have been listed on OSE.