Noreco Enters Farms-In for Denmark Exploration

Noreco Energy entered into a farm in agreement with Elko Energy to acquire a 47% participating interest and to become the operator of the 02/05 license in Denmark. Elko will retain a 33% interest in the license, while Nordsofonden owns the remaining 20%. Drilling costs in the license are expected to be moderate due to shallow water depths and relatively shallow drilling targets. Currently, the partners are performing technical studies to optimize the location for the first exploration well to be drilled in 2011. Under the terms of the agreement, Noreco will reimburse Elko US $959,000 for its share of past license costs, and in the event of a discovery, Noreco will cover Elko's share of the costs associated with the discovery well's production test. The agreement is subject to approval from the Danish Energy Agency.

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