Naftex Energy Declares Caravela Sul Discovery Commercial

Naftex and its subsidiary, Coplex Brasil, have confirmed to the ANP that the discovery well 1-SCS-10A in the Caravela Sul Field is a commercial discovery.

Naftex is the indirect owner of all of the shares in Coplex Brasil. Coplex Brasil participates with a 27.5% interest in three operating licenses offshore the Santo Catarina Coast in Southern Brazil, identified as the coral, Estrela-do-Mar and BS-3 licenses. The partners in all three licenses are Starfish Oil & Gas (with 7.5% participating interest), Queiroz Galvao Perfuracoes S.A. (30% interest) and Petrobras (35% interest). Petrobras is the operator of all three licenses.

Northern Oil ASA, the parent company of Naftex, announced that it has received a USD 1.1 million additional working capital facility from its major shareholder World Shipholding Ltd. The additional credit has been advanced as loan to Coplex Brasil. Coplex Brasil has used the funds to settle two outstanding invoices linked to the operation of the Coral field.

The remaining outstanding invoices on Coral - which are estimated to approximately USD 1.3 million - are expected to be covered through the proceeds from the sale of the third oil cargo already delivered to Petrobras. The Coral field is currently producing approximately 5,000 barrels per day from one production well. The work with putting the next production well on stream is according to the Operator, estimated to be completed during the next 10 days. The tie up of the second and subsequently also the third production well will put the Coral field into a strong positive cash flow situation.

Coplex Brasil has in July been granted an extended injunction for the unpaid invoices on the BS-3 license estimated to USD 7.2 million, meaning that the Operator Petrobras' rights to act against Coplex Brasil on the basis of Coplex Brasil's non-payment of cash calls under the joint operating agreement is still suspended. Furthermore, Coplex Brasil and Petrobras have started a process of arbitration. The duration of this process is uncertain.

The Partners in the BS-3 licenses have, in a filing sent to ANP yesterday August 6th, declared the commerciality of the discovery made by the well 1-SCS-10 A in the Caravela Sul field. The new field has been given the name Cavalo Marinho (Sea Horse in English).