Niobe Exploration Well Spudded

Drilling of the Niobe exploration well in UK licence P1889 has started. The Norwegian Energy Company ASA (Noreco) group is partner in the licence with a current equity interest of 22.5 per cent.

The licence is located in blocks 12/26b and 12/27 close to the Beatrice oil field in the Outer Moray Firth area off the north east coast of Scotland. The well is being drilled by the jackup drilling unit Ensco 100. The main target is in a stratigraphic pinch-out trap in Late Jurassic sands 940 meters below mean sea level. Drilling time to target depth is estimated to 31 days.

Noreco estimates that chance of success of the Niobe well is 30 per cent and that the prospect contains between 7 and 157 million barrels of oil equivalents (mmboe), with a P50 of 38 mmboe (gross).

As informed in the Q1 report, Norwegian Energy Company (UK) Ltd has issued an option in favour of a third party for a 10 per cent working interest in the Niobe licence (carried well cost). Also, following from a separate agreement, Noreco Norway AS has obtained the right to acquire without further consideration either a) all shares in Norwegian Energy Company (UK) Ltd from Norwegian Energy Company ASA, or b) the remaining 12.5% of the Niobe licence should the option be exercised by the third party.