Oselvar Field Development Plan Submitted to Norwegian Authorities

Norwegian Energy Company ASA (Noreco) reports that the development plan for Oselvar has been submitted to Norwegian authorities. Noreco owns 15% of the field, and will book an additional 7.8 million barrels of oil equivalents, a 24% increase in the company's 2P reserves.

"Oselvar is one of several discoveries in our portfolio that are being brought towards development, all of which will add material reserves and create significant value for the company," says CEO Scott Kerr.

The field is expected to start producing in the fourth quarter of 2011, and will increase Noreco's production by 2,700 boepd. The reserves of the development are 52 MMboe. Noreco's share is 7.8 million barrels (3.7 million barrels of oil and 4.1 million boe of gas), and these will be added to Noreco's proven and probable reserves (2P) at the end of Q1 2009. This excludes any contribution from the Ipswich discovery, which has significant add-on potential. There is also further exploration potential from identified prospects in the license.

The total cost of the development is estimated to be NOK 4.7 billion, of which Noreco's share amounts to NOK 0.7 billion. The bulk of the capital investments will come in late 2010 and 2011. The investments in 2009 are limited, and are included in the guidance Noreco provided on 19 February 2009.

Facts About Oselvar

The Oselvar field is located on the Norwegian continental shelf, close to the English border and 23 kilometers from the Ula Field. According to the development plan, three subsea horizontal production wells will be drilled and connected via a multi-phase pipeline to the Ula platform for further processing. From Ula, the produced oil will be transported via the Ekofisk/Norpipe system to Teesside, UK. The other partners in license PL274 are DONG E&P Norge AS (operator, 40%), Bayerngas Produksjon Norge (30%), and Wintershall Norge ASA (15%)