Alta, 2 March 2015

Reference is made to stock exchange announcement dated 12 February 2015 in which North Energy announced its intention to reduce its cost base as a response to the challenging market conditions following the recent collapse in the oil price. A strategic decision has now been taken to co-locate the north Norwegian operations to Tromsø and the remaining operations to Stavanger. In parallel the organization will be trimmed as part of the measures taken to position North Energy for the future.

The measures to be implemented will in total reduce the Company's annual operating costs down to a level of NOK 100 million.

Chairman of the Board, Anders Onarheim commented; "The dramatic drop in the oil price has led the whole industry into a restructuring phase. No one is unaffected by this, and as a responsible Company we are forced to take measures to adapt to a new reality. The cost initiatives we are now undertaking, although painful for those affected, will contribute significantly to the overall efforts to position North Energy as a robust and attractive oil company for the future."

Since its inception in 2007, North Energy has found oil or gas in 6 out of 13 exploration wells. However, the Company has yet to experience its commercial breakthrough.

"The fact that we are still chasing our commercial breakthrough is something we take very seriously. Our number one priority is to take part in a commercial discovery, thereby creating value for our shareholders and securing the Company's position as a long term competent player in the north and selected other target areas. In the meantime we are now taking responsible cost measures in response to the new reality facing the industry," said Knut Sæberg, acting CEO in North Energy.

The decision to co-locate the northern Norwegian operations to Tromsø implies a stepwise reduction and closure of the Alta office and a change in the Company's registered main office. The change of registered main office is dependent on a resolution at the upcoming Annual General Meeting in June.

North Energy's strategy is to explore for commercial oil on the Norwegian Continental Shelf with a focus on the Barents and the Norwegian Sea. An important part of the planned co-location is to strengthen both the commercial and technical arms of the Company through establishing more focused and efficient entities. 

The cost cutting initiatives shall contribute to routing more funds towards high impact exploration. The drilling plan for 2015 contains three fully funded exploration wells due to test roughly 700 million barrels of oil equivalent (mmboe), net 75 mmboe to North Energy. The Company is in the process of maturing wells for 2016 and beyond, both through its current portfolio of 27 licences and by exploring opportunities in the farm-in market. North Energy is also actively preparing for the 23 Licensing Round and the APA 2015.

"Our ambition remains to create a successful Norwegian oil company. The initiatives now being undertaken are responsible and necessary measures in a tougher market climate and will contribute to positioning North Energy for the future," Knut Sæberg commented. 

Further information from;

Anders Onarheim, Chairman of the Board
Mob: +47 974 01 511

Knut Sæberg, acting CEO
Mob: +47 918 00 720 | E-post: knut.saeberg@northenergy.no

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