North Energy ASA — M&A Activity 2015

Dec 21, 2015

North Energy ASA - North Energy acquires Explora Petroleum

North Energy ASA - North Energy acquires Explora Petroleum

Tromsø, 21 December 2015

North Energy hereby announces that it has acquired Explora Petroleum AS

("Explora") for a cash payment of USD 2.5 million. The transaction is being

implemented through the purchase of all the shares in Explora from the company's

shareholders, who comprise certain employees and individual shareholders, and a

group of institutional investors. North Energy is financing the acquisition

through existing credit facilities and cash in hand.

Through the acquisition of Explora, North Energy is taking over the company's

net cash position, exploration tax refund, uncovered tax-related loss and future

commitments related to organisation and the licence portfolio.

Explora Petroleum in brief

Explora had 18 employees and 16 licences on the Norwegian continental shelf

(NCS) at the date of transaction, including small interests in the Skarfjell and

Grosbeak discoveries, both in PL 378 in the north-eastern North Sea, located

about 20 kilometres south-west of the Gjøa field. Skarfjell is currently

estimated to contain 139 million barrels of recoverable oil equivalents (NPD,

RNB 2015) while Grosbeak is currently estimated to contain 35 million barrels of

recoverable oil equivalents (NPD, RNB 2015). Net to Explora the resources in

license PL 378 are estimated to be approximately 4 mmboe.

Explora is headed by John R Pickard (Chief Executive Officer), Frode Vassbø

(Commercial Manager), Birte N. Borrevik (HSE and Operations Manager), and Knut

Hansch (Chief Geophysicist). The Board comprises Simon Eyers (chair), Peder

Bratt, Scott Kerr, Jan Vollset, Dr Christopher A Wright, Frode Vassbo and John R

Pickard.

Key figures for Explora's operations (amounts in USD)

Income statement

+----------+---------------+--------------+--------------+

|   | 2012 | 2013 | 2014 |

+----------+---------------+--------------+--------------+

| Turnover |   0 |   0 |   0 |

+----------+---------------+--------------+--------------+

| EBITDA | (20 229 805) | (44 960 192) | (96 058 718) |

+----------+---------------+--------------+--------------+

| Loss |   (4 417 843) | (17 561 430) | (26 800 942) |

+----------+---------------+--------------+--------------+

Balance sheet

+-------------------+-------------+------------+-------------+

|   | 2012 | 2013 | 2014 |

+-------------------+-------------+------------+-------------+

| Assets, including | 25 731 151 | 79 311 069 | 77 840 610 |

+-------------------+-------------+------------+-------------+

|  ­- cash in hand |   6 136 246 | 11 205 580 |   8 354 837 |

+-------------------+-------------+------------+-------------+

| Equity |   8 149 094 | 12 285 481 | 12 985 391 |

+-------------------+-------------+------------+-------------+

Significance of the transaction

In connection with the acquisition of Explora, North Energy will concentrate its

petroleum operations in a single company. This is to be done by transferring

today's petroleum operations from North Energy to Explora, and thereby bringing

employees together in a new organisation for the combined company.

Acquiring Explora will strengthen North Energy's financial position and increase

its net cash position and tax balances. The Explora organisation being taken

over by North Energy represents a competent team which will be important for

further activity in the company. North Energy will also continue its strategic

process with the aim of creating shareholder value on the basis of the overall

resources in both companies.

"We want to contribute actively to what we believe to be a necessary

consolidation on the NCS," says Knut Sæberg, North Energy's acting CEO. "The

sharp fall in the price of oil has necessitated a much greater focus on cost

optimisation and larger, more robust entities. We are therefore well positioned

to play an active role in this consolidation."

The Explora transaction is conditional on the approval of the Norwegian

government, and is expected to be completed during the first quarter of 2016.

Apart from the sale by Explora's senior executives and directors of their shares

in the company to North Energy, no other agreements related to the transaction

have been entered into with senior executives or directors of either Explora or

North Energy.

Further information from:

Anders Onarheim, Chairman of the Board

Mob: +47 974 01 511 I E-mail: ao@spitsbergen.no

Knut Sæberg, acting CEO

Mob: +47 918 00 720 | E-mail: knut.saeberg@northenergy.no

This information is subject to the disclosure provisions in section 5, sub-

section 12 of the Norwegian Securities Trading Act.

[HUG#1974057]