Paladin Wins Stake in Four Blocks Offshore Norway

Paladin Resources' subsidiary, Paladin Resources Norge AS, has been awarded a 50 percent interest and operatorship of four blocks and one part block in the Norwegian 18th Licensing Round.

Paladin (50 percent) and partners, Pertra AS (30 percent) and Revus Energy AS (20 percent) have been awarded blocks 9/2, 9/3, 9/6 and 10/4, and part-block 9/ 5 (in all blocks for stratigraphic horizons down to 200 meters below base Jurassic) in return for a firm work program to acquire at least 800 square kilometres of 3D seismic in blocks 9/6 and 10/4 and to drill one exploration well to the pre-Jurassic within four years of license award.

The blocks lie in the relatively under-explored Egersund Basin ca.100 kilometers to the south west of Stavanger. However, the presence of hydrocarbons is proven in the area, primarily by the Yme Field, a 39 degree API oil discovery in Middle Jurassic sandstones with some 280 million barrels of oil originally in place. This field, which lies within the awarded blocks, was developed using a leased jack-up rig and floating storage vessel in 1996, but was abandoned in 2001, having recovered 51 million barrels of oil. Field production rates prior to abandonment were 22,000 barrels of oil per day.

A number of Middle Jurassic prospects with standalone potential, analogous to the Yme Field, have been identified on the existing seismic data base. In addition, preliminary analysis indicates that there may be scope for redevelopment of the Yme Field using innovative contractual arrangements and latest production well technologies to improve recovery factors. Both the exploration potential and Yme redevelopment options will be evaluated in detail in the coming months.

Roy Franklin, Chief Executive of Paladin Resources plc, commented:

'This operated license award constitutes a significant addition to our Norwegian portfolio; in a relatively under-explored proven hydrocarbon basin, the identified exploration prospects are of a size that is material for a company such as Paladin and well worth pursuing aggressively, as is the possibility of redeveloping Yme.'