Noreco Continues to Produce at 'High Level' in September

Norwegian Energy Company ASA

Noreco reported that its oil, gas and NGL production for September 2008 was 15,400 barrels of oil equivalents per day.

"We continue to produce at a high level and are ahead of plan," commented CEO Scott Kerr.

Production from Noreco's portfolio of seven producing fields was 15,400 barrels of oil equivalents (boe) per day in September 2008. The average daily production in the third quarter of 2008 was also 15,400 boe per day. The strong production is underpinned by good underlying performance in the fields. The fields in the Siri area (Siri, Nini and Cecilie) have experienced a high operational efficiency through the quarter, and the Brage A-28 well continues to perform very well.

In 3Q, the Company has also completed 19 days of planned production shutdown on South Arne according to plan, as well as unplanned shutdowns on Enoch (28 days) and Brage (1 day).

The Company will review the production guidance for 2008 in conjunction with the presentation of the Q3 results on October 23.

Sale of oil in September was done at an average oil price of US $98 per barrel (US $116 for Q3). After value adjustments for oil inventory, cost of put options and NGL and gas prices the average net price per barrel oil equivalent achieved for September was US $86 (US $104 for Q3).

The strong production has further improved the cash position for the Company, and parts of the cash has been used to repay debt.

"I am very pleased with the development and value creation in Noreco this year. Our production is increasing and oil prices are still at a high level. The strong cash flow from our production gives us flexibility and we are improving our balance sheet," said CEO Scott Kerr.

The production volumes are preliminary and are subject to adjustments, including final allocations between fields, quality adjustments and prices.