Revus Rolls in $20.5MM Net Profit in Third Quarter
Revus reported a net profit of NOK 137.2 million (USD 20.5 million) in the third quarter 2008, compared to NOK 418.0 million in the same quarter in 2007. The operational highlight of the quarter was the confirmation of a significant oil discovery on the "Jordbaer" prospect in PL 373 in the Norwegian Continental Shelf.
On October 27, Wintershall Holding Aktiengesellschaft announced a cash bid for Revus at NOK 110 per share. Offer documents were issued November 5 and the Revus board has recommended that shareholders accept the bid.
The exploration activities in the third quarter was very much dominated on activities on the Jordbaer discovery. The company's current estimate of reserves proven is approximately 125 mmbbl, including volumes of the untested Jordbaer West. The preliminary view of the company is that the discovery is likely to be commercial on its own but that full focus will now be to appraise and further exploit the area with the aim to bring the asset to a decision for development as quickly as possible. The license partners are currently evaluating the work program for 2009, and as it currently looks likely plans will include the drilling of two wells in 2009 of which one will be the Jordbaer East. Jordbaer East holds potential large volumes (400-600 mmboe gross) and it is important to confirm the potential presence of these volumes in order to direct the further appraisal and development planning phase.
The appraisal well on Luno has just spudded and results are expected early in first quarter 2009. The Cladhan well on the UKCS is currently drilling and is expected to reach its target imminently. A large oil discovery in the Cladhan well would increase the reserves and the underlying value of Revus Energy substantially.
The development concept for the Oselvar discovery has been decided. The sanction of the project and submission of PDO is expected in the first quarter of 2009.
Revus Energy's production for the fourth quarter of 2008 is estimated to be 6 600 boepd against actual production of 6 039 boepd in the third quarter, which was largely influenced by shut downs on the Murchison and Veslefrikk fields. The annual estimated production is forecasted to be 6 000 boepd.
On the Broom field the Company is currently building its own reservoir model with the intention to use this to agree infill well locations with the operator Lundin. Revus Energy's ambitions are to include such wells in the 2009 budget.
The offer document for the NOK 110 per share cash offer from Wintershall has been posted to the Revus shareholders. The deadline for accepting the offer is 5th December, and providing the required acceptance level of 90 per cent is obtained, the settlement is expected to take place as soon as reasonably possible and not later than ten business days after the Conditions for the Offer set out in section 2.6 ("Conditions to the Offer") are met or waived. Revus Energy board has unanimously recommended that shareholders accept the offer. Members of senior management and Board members holding shares have provided pre-acceptances, whereby said shareholders have undertaken to accept the Offer, unless a higher competing offer is presented and Wintershall elects not to match such competing offer. The offer has also been pre-accepted by Revus' largest shareholder, Sector Asset Management on the same terms for approximately 16.5 per cent of the outstanding shares.
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