Noreco agrees to operate Danish permit

Norwegian Energy Co. (Noreco) has agreed to farm into the 02/05 license in the Danish North Sea.

Offshore staff

STAVANGER, Norway -- Norwegian Energy Co. (Noreco) has agreed to farm into the 02/05 license in the Danish North Sea. The company will take a 47% operating interest, the remainder held by Elko Energy and Nordsofonden.

Block 02/05 is on the Ringkøping Fyn High, an area containing several Chalk and Rotliegendes prospects. Water depths are shallow as are the subsurface drilling targets.

The partners are performing technical studies to determine an optimum location for their first exploration well, likely to be drilled in 2011.

Noreco will reimburse Elko $960,000 for its share of past license costs. In the event of a discovery, it will also cover Elko's share of costs associated with a production test.

Agreement for the transaction is subject to approval from the Danish Energy Agency.

06/02/2010

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