21.01.2014 08:00:00 CET

North Energy ASA - Strategic, technological and financial strengthening of the company

Alta, 21 January 2014

North Energy announces stronger focus on the company's core home market, the Barents Sea. The strategy is supported by North Energy's unique position in northern Norway coupled with an adaptation of technologies particularly well suited in the Barents Sea, namely Electromagnetic surveys (EM) and Virtual Drilling (VD). To support these plans, North Energy has raised NOK 285 million in cash through a private placement of 71.3 million shares at NOK 4.00 per share and NOK 75 million in a convertible loan. The transactions are subject to EGM approval. The fundraising makes North Energy fully funded for 8 - 12 wells over the coming years.

The strategic focus

North Energy is focusing on the company's primary exploration region; the Barents Sea, where North Energy has been active since the company's formation in 2007. With headquarters in Alta and a strategy to contribute to industrial value creation in northern Norway, North Energy has an attractive and unique position in the region. The company expects to further build on this to add additional wells in the Barents Sea through farm-ins and licensing rounds.

The technology advantage

The Barents Sea focus is supported by a strengthened technical analysis of prospects through dedicated adaptation of EM and VD. Conventional G&G coupled with EM and VD screening is expected to yield lower finding cost and commercial oil discoveries. EM has proven to be a particularly effective exploration tool in the shallow hydrocarbon basins such as the Barents Sea.

North Energy has entered into an agreement with EMGS ASA (EMGS) for the license of EMGS' EM data library for the Barents Sea for an amount equal to NOK 75 million. In addition, EMGS has committed to provide various services over the coming two years and North Energy has agreed to prefund certain surveys all for a total amount of NOK 25 million.

The transactions

North Energy has raised NOK 285 million in a private placement directed towards i.a., large North Energy shareholders and certain other investors. The private placement is subject to approval at North Energy's EGM, scheduled for 13 February. The new shares will be listed upon prospectus approval, which is expected late February/early March, subject to Norwegian FSA approval process.

The new shares are issued at an issue price of NOK 4.00 per share which represents a premium on the last trade on Monday 20 January at NOK 3.75. A total of 71.3 million new shares are issued in the private placement. Following the private placement, the new number of shares will be 112.1 million.

The NOK 75 million convertible loan with EMGS is related to the license of the EM data library. The loan has a term of 6 months and can be converted to shares after 4-6 months at a strike price of NOK 4.15 per share. If the loan is converted in full, the fully diluted new number of shares will be up to 130.2 million. The transactions are subject to EGM approval.

Carnegie AS and Pareto Securities AS have acted as financial advisors to North Energy in connection with the transactions.

Further information from:

Erik Karlstrøm, CEO
Mob: +47 476 52 990 | E-mail: erik.karlstrom@northenergy.no

Knut Sæberg, CFO
Mob: +47 918 00 720 | E-mail: knut.saeberg@northenergy.no

Kristin Ingebrigtsen, vice president strategy and PA/PR
Mob: +47 926 05 601 E-mail: kristin.ingebrigtsen@northenergy.no

This information is mandatory under Section 5-12 of the Securities Trading Act.


North Energy ASA - Investor Presentation