Norse Energy To Buy 19,700 Acres In Barnett Shale Combo For $77MM

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Estimated Price
70MM
Description

CANCELED: To acquire 19,700 Barnett acres in Montague & Clay counties, TX, gaining 600 BOE/d, 3.7 MMBOE 2P.

CANCELED: Norse Energy Corp ASA, Oslo, Norway, (OTCBB: NSEEF; Oslo: NEC) plans to acquire oil and gas assets in the Barnett shale in North Texas from Strategic Petroleum Investment Consultants Enterprise Inc., Paris Oil & Gas Corp. and Eleon Operators LLC for US$70 million in cash and stock.

Norse Energy will pay US$55 million in stock to be issued at NOK4.70 per share, and US$15 million in cash, of which US$12 million is in the form of a seller's credit. In addition, a US$5 million contingent earn-out will be paid subject to production standards to be met for the first six wells to be drilled in the Bellevue area post closing.

The assets represent virtually all of the sellers' holdings and include approximately 19,700 acres of oil and gas shale in Montague and Clay counties. Some 4,760 acres are in the Midway project and 13,600 acres are in the Bellevue area. Another 4.1% working interest is in 32,500 gross acres in Montague and Wise counties operated by EOG Resources Inc., Houston, (NYSE: EOG) and EnCana Corp., Calgary (NSYE: ECA).

Current net production is approximately 600 barrels of oil equivalent per day. Proved plus probable reserves are 3.7 million barrels of oil equivalent, with 4.4 million barrels equivalent proved probable and possible. Contingent resources are estimated at 48.6 million barrels of oil equivalent.

Norse Energy chief executive Øivind Risberg says, "We believe that the emerging Barnett combo play represents a great opportunity for Norse Energy. As an early entrant into the most well known unconventional U.S. onshore play, this transaction is attractive from a risk/reward perspective."

Strategic Petroleum president Dimitrios Kousparis, who will remain with the company, says, "My main focus will be the successful execution of an active drill-out program for the Midway and Bellevue acreage in the Barnett."

Carnegie ASA is financial advisor to Norse Energy. Norse Energy operates in the Marcellus and Utica shales and in Brazil.