Nordic Energy plc/ Index: ISDX / Epic: NORP / Sector: Oil & Gas
4 September 2013
Nordic Energy plc (`Nordic' or `the Company')
Acquires Largest Exploration and Production Licence in the Danish North Sea
Nordic Energy plc, a company focussed on making investments in the North Sea
oil and gas sector, is pleased to announce the formal transfer to the Company
of licence 01/13 (`the Licence'), the largest exploration and production
licence in the Danish North Sea, covering an area of 3,600 sq km in a proven
hydrocarbon system. This follows the award of the Licence by the Danish
Government to NikOil Limited (`NikOil'), a private company jointly owned by the
Directors of Nordic, as previously announced on 1 May 2013.
Highlights
* Licence located close to existing production and multiple discoveries
*
+ Two previous wells drilled in 1970s - one encountered and tested gas
* Ten large previously identified prospects/leads estimated by a Competent
Person in 2010 to hold potential P50 recoverable resources of 1.2 billion
barrels of oil and 2.8 trillion cubic feet of gas
* 11,600km of existing 2-D seismic and well data available to Nordic at
nominal cost - represents a significant asset as cost of acquiring the
seismic data alone would be in excess of US$20m
* Currently reprocessing existing 2-D seismic into a pseudo 3-D seismic
dataset to further delineate the prospectivity - results will be included
in a Competent Person's Report with updated volumetrics and economics in Q4
2013
* Licence acquired for low cost - NikOil issued with £104,000 nominal of an
unsecured interest free convertible loan note, converting into 8,320,000
Ordinary Shares in the Company at 1.25p per share
* Danish North Sea Fund will participate in the Licence with a fully-paying
20% working interest
Nordic Energy CEO Rudolf Kleiber said, "Nordic Energy is now the operator of
the largest exploration and production licence in the Danish North Sea. Licence
01/13 is considered highly prospective as, based on existing seismic, a number
of very large structures have been mapped updip from the Central Graben, the
source of all the oil found in the Danish, Norwegian and UK North Sea.
"Management has made previous multiple commercial field discoveries in the
Nordic area and we intend to immediately apply our combined experience and
expertise to further define the Licence's company-making prospectivity towards
drill ready status. The Licence comes with access to an extensive seismic
database which at today's prices would cost in excess of US$20m. We are
currently using advanced technologies to re-process a significant amount of
this data to generate a pseudo 3-D seismic dataset. Advanced technologies and
new ideas were successfully used by Lundin to locate the nearby Johan Sverdrup,
a 3.3 billion barrel `super giant' oil discovery off the coast of Norway,
where, as with our Licence, migration has taken place out of the Central Graben
to a high lying area to the east.
"This is a highly exciting time for Nordic Energy. Further updates will be
provided in the months to come, as we look to close the large gap we believe
exists between our current market capitalisation of less than £2m and the
considerable historic investment made to date in the area covered by Licence 01
/13, let alone the near term value drivers we have put in place, notably an
updated CPR due later this year."
Further information
Licence 01/13 is located in close proximity to existing production and multiple
discoveries in the Danish Central Graben, the location of major North Sea
producing fields and the source of Palaeocene Siri oil. Two previous wells were
drilled on the Licence in 1970s, one of which tested gas in the Miocene. Since
2008, Chevron has developed a number of shallow Miocene gas fields in the
northern part of the Dutch offshore sector, thereby demonstrating that these
resources can be developed commercially.
Based on previous technical work, ten large prospects and leads have been
mapped and independently confirmed in a Competent Person's Report by Tracs
International Consultancy Limited in 2010. The Licence contains, totally or
partially, six oil prospects and leads with potential P50 recoverable resources
of 1.2 billion barrels of oil and four gas leads with potential P50 recoverable
resources of 2.8 trillion cubic feet of gas. The mapped structures occur at a
range of geological horizons, i.e. Top Chalk, Top Rotliegendes and Top
Pre-Permian. The Luna well drilled last year in close proximity to the licence
demonstrated the presence of Auk Formation sandstones. The Auk Formation is the
main reservoir in the southern UK Gas Basin and in the Netherlands, including
the Supergiant Groningen field.
Nordic has secured an option to acquire 11,600 km of existing 2-D seismic and a
pseudo-3-D seismic data volume covering the Licence area which is presently
being processed. Both 2-D and pseudo-3-D seismic will be interpreted, together
with data from existing wells, to develop drill ready prospects on the licence.
Pseudo-3-D is a new technology employed in seismic processing which the
Directors hope will reveal new information on the prospectivity of the Licence
area. Following this, a CPR will be commissioned with updated volumetrics and
economics. The costs of the above work programme and CPR are fully covered by
existing resources. The Directors envisage a multi-well drilling programme
could commence within the next 24-36 months.
The transfer of the Licence to Nordic has been approved by the Danish
Government. Nordic has an 80% working interest in the Licence with a single
partner, the Danish North Sea Fund, holding a fully-paying working interest in
the remaining 20%. Under the terms of the transfer, £104,000 nominal of an
unsecured interest free convertible loan note has been issued to NikOil which
is convertible into 8,320,000 Ordinary Shares in the Company at 1.25p per
share.
The Directors of the Company are responsible for the contents of this
announcement.
**ENDS**
For further information please visit www.nordicenergyplc.com or contact:
Enquiries:
Rudolf Kleiber Nordic Energy plc Tel: +44 20 7283 0179
Patrick Rocholl Nordic Energy plc Tel: +44 20 7283 0179
Jo Turner Cairn Financial Advisers LLP Tel: +44 20 7148 7900
Liam Murray Cairn Financial Advisers LLP Tel: +44 20 7148 7900
Frank Buhagiar St Brides Media & Finance Ltd Tel: +44 20 7236 1177
Lottie Brocklehurst St Brides Media & Finance Ltd Tel: +44 20 7236 1177