November production

Bullet

Stavanger 7 December 2009 Norwegian Energy Company ASA (Noreco - OSE:NOR), Noreco's production in November 2009 was 6,250 barrels of oil equivalents per day. Production was still affected by the shutdown of the Siri field in Denmark.

The Siri area fields (Siri, Nini and Cecilie) have been shut down since 31 August. The operator DONG is currently working on a temporary solution to stabilize the platform's water buffer tank and still expects to bring the field back on stream during December, conditional upon approval from certifying and governmental bodies and on weather conditions. Once a temporary solution is in place, work on a more permanent solution will commence. The shutdown is not expected to have any adverse effect on the reservoir or field reserves.
 
The Nini East development is progressing as planned, and the third and final well is currently being drilled. Nini East is a tie-back development to Siri, and production is expected to start shortly after the Siri field is back on stream.
 
Under its group energy insurance package Noreco has cover for inter alia business interruption, subject to a retention period of 60 days and an overall limit of 12 months. Thus, provided there is found to be cover under its policy Noreco will for any period of resulting production loss in excess of 60 days receive an insurance payment of USD 50 per barrel of crude not produced. In addition, the business interruption cover also provides coverage for costs associated with acts aimed at mitigating a production loss, such as temporary/provisional measures to restart production. The loss adjuster is currently processing the claim. Although Noreco is hopeful of cover, it is at this stage premature to attempt to draw any definite conclusion until the investigations into the cause of the damage has been completed.
 
Brage production was high and stable in November with an monthly average of 36,400 boed gross. The Brage Bowmore well is still the dominant oil producer at Brage and continues to perform favourably with low water cut and Gas-Oil-Ratio. Drilling of the next infill producer at Brage is ongoing and is expected to be completed in Q2 2010.
 
The South Arne field produced 22,000 boed gross in November. The production is slightly down from October, mainly due to ongoing workover operations. Drilling of two new infill wells is expected to commence in Q1 2010, and both wells are expected to be put on stream in Q3 2010.
 
The Lulita field continued to be shut down in November. Due to ongoing repairs of a gas compressor on the Harald platform, restart of production from Lulita is expected during first quarter 2010.
 
The net realized price was USD 71 per barrel in November, after deduction for the cost of Noreco's oil price put options at USD 50 and USD 75 per barrel and adjusted for inventory and NGL and gas prices.
 
The production volumes and prices are preliminary and are subject to adjustments, including final allocations between fields, quality adjustments and prices.
 
 
Contacts:
Scott Kerr , CEO (+47 99 28 38 90)
Einar Gjelsvik, VP Strategy & IR (+47 99 28 38 56)