Noreco opts out of Brage, Hyme

Norwegian Energy Co. (Noreco) has agreed to sell its shares in two Norwegian oil fields to Core Energy.

Offshore staff

STAVANGER, Norway -- Norwegian Energy Co. (Noreco) has agreed to sell its shares in two Norwegian oil fields to Core Energy.

The package comprises 12.3% of the Brage field in the North Sea, operated by Statoil, and 17.5% of the Hyme discovery in the Norwegian Sea, between the producing Draugen and Njord fields.

Last week, Statoil submitted a development plan for Hyme involving a subsea tieback to the Njord facilities. First oil is scheduled for 1Q 2013.

The transaction will be worth $85 million net of tax to Noreco, and the company may be entitled to further compensation if more discoveries in the Hyme license go forward to development within six years.

Noreco CEO Einar Gjelsvik said: "It is a strategic priority for Noreco to renew and strengthen the company's production base, and we are currently undertaking a substantial investment program which will add two new producing fields to our portfolio and contribute to significantly higher production and lower unit cost from next year.

“Brage is one of the oldest fields in our portfolio, while Hyme is a discovery where the development is about to start. The sale of these assets will improve Noreco's financial capacity, and will also lower our investment requirements going forward.”

Core Energy aims to capture potential value in and around producing oil and gas fields on the Norwegian continental shelf. The company has backing from private equity investor HitecVision.

05/25/2011

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