21.12.2015 08:45:00 CET

North Energy ASA - North Energy acquires Explora Petroleum

Tromsø, 21 December 2015

North Energy hereby announces that it has acquired Explora Petroleum AS ("Explora") for a cash payment of USD 2.5 million. The transaction is being implemented through the purchase of all the shares in Explora from the company's shareholders, who comprise certain employees and individual shareholders, and a group of institutional investors. North Energy is financing the acquisition through existing credit facilities and cash in hand.

Through the acquisition of Explora, North Energy is taking over the company's net cash position, exploration tax refund, uncovered tax-related loss and future commitments related to organisation and the licence portfolio.

Explora Petroleum in brief
Explora had 18 employees and 16 licences on the Norwegian continental shelf (NCS) at the date of transaction, including small interests in the Skarfjell and Grosbeak discoveries, both in PL 378 in the north-eastern North Sea, located about 20 kilometres south-west of the Gjøa field. Skarfjell is currently estimated to contain 139 million barrels of recoverable oil equivalents (NPD, RNB 2015) while Grosbeak is currently estimated to contain 35 million barrels of recoverable oil equivalents (NPD, RNB 2015). Net to Explora the resources in license PL 378 are estimated to be approximately 4 mmboe.

Explora is headed by John R Pickard (Chief Executive Officer), Frode Vassbø (Commercial Manager), Birte N. Borrevik (HSE and Operations Manager), and Knut Hansch (Chief Geophysicist). The Board comprises Simon Eyers (chair), Peder Bratt, Scott Kerr, Jan Vollset, Dr Christopher A Wright, Frode Vassbo and John R Pickard.

Key figures for Explora's operations (amounts in USD)
Income statement

  2012 2013 2014
Turnover   0   0   0
EBITDA (20 229 805) (44 960 192) (96 058 718)
Loss   (4 417 843) (17 561 430) (26 800 942)

Balance sheet

  2012 2013 2014
Assets, including 25 731 151 79 311 069 77 840 610
 ­- cash in hand   6 136 246 11 205 580   8 354 837
Equity   8 149 094 12 285 481 12 985 391

Significance of the transaction
In connection with the acquisition of Explora, North Energy will concentrate its petroleum operations in a single company. This is to be done by transferring today's petroleum operations from North Energy to Explora, and thereby bringing employees together in a new organisation for the combined company.

Acquiring Explora will strengthen North Energy's financial position and increase its net cash position and tax balances. The Explora organisation being taken over by North Energy represents a competent team which will be important for further activity in the company. North Energy will also continue its strategic process with the aim of creating shareholder value on the basis of the overall resources in both companies.

"We want to contribute actively to what we believe to be a necessary consolidation on the NCS," says Knut Sæberg, North Energy's acting CEO. "The sharp fall in the price of oil has necessitated a much greater focus on cost optimisation and larger, more robust entities. We are therefore well positioned to play an active role in this consolidation."

The Explora transaction is conditional on the approval of the Norwegian government, and is expected to be completed during the first quarter of 2016.

Apart from the sale by Explora's senior executives and directors of their shares in the company to North Energy, no other agreements related to the transaction have been entered into with senior executives or directors of either Explora or North Energy.

Further information from: 
Anders Onarheim, Chairman of the Board
Mob: +47 974 01 511 I E-mail: ao@spitsbergen.no

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

This information is subject to the disclosure provisions in section 5, sub-section 12 of the Norwegian Securities Trading Act.