Nordic awarded Danish licence

Nordic Energy - press release
Wednesday, May 1, 2013

Nordic Energy PLC, a company focussed on making investments in the North Sea oil and gas sector, is pleased to announce that NikOil Limited (‘NikOil’), a private company jointly owned by the Directors of Nordic, has been awarded by the Danish Government the 3,600 sq km offshore exploration and production licence 01-13 (‘the Licence’) located in a working hydrocarbon system off the west coast of Denmark in the Danish North Sea.  

Pursuant to a Letter of Intent (‘LOI’) signed by the Company and Nikoil and announced on 25 February 2013, Nordic will acquire the Licence from Nikoil, subject to the consent of the Danish Government.  The terms of the transfer, which are not expected to be material, will be announced following the Danish government consent.

Overview

  • Licence located in a working hydrocarbon system 
    • Close to existing production and multiple discoveries
    • Two previous wells drilled in 1970s – one encountered gas
  • Ten large prospects/leads previously identified and independently confirmed by a Competent Person in 2010 
    • Six oil prospects and leads with potential recoverable resources of between 805 - 7,526 million barrels oil (‘MMbo’)
    • Four gas leads with potential recoverable resources of 1,084 - 7,304 billion cubic feet of gas (‘BCF’)
  • Multiple geological horizons – structures mapped in Top Chalk, Top Rotliegendes and Top Pre-Permian reservoirs
  • Significant (11,600km) existing 2D seismic and well database is available at nominal cost. This database represents a significant investment by previous operators which supports the project
  • New processing technology being applied to existing seismic data set to further delineate the prospectivity (pseudo-3D)
  • Danish North Sea Fund will participate in the Licence with a fully-paying 20% working interest

Nordic Energy CEO Rudolf Kleiber said: “We are focussed on generating substantial value for shareholders by building and developing a multi-stage portfolio of highly prospective oil and gas assets in the Nordic region, including both exploration and production.  This, our first licence, matches our investment criteria: low cost entry; proven hydrocarbon system; large existing seismic dataset that can be reworked using advanced technology; identified prospects; located in shallow water close to markets and infrastructure.  

"Upon final approval from the Danish Government, we will rework the existing data using the existing 2D and pseudo-3D seismic technology to further delineate and mature the identified prospects and leads to drill ready status.  I look forward to providing further updates in due course.”

Further information

The Licence originally formed part of Danish Exploration and Production Licence 02-05, which was awarded in 2005 to Elko Energy Inc., a company founded by Mr. Kleiber and managed by him until 2009.  Based on previous technical work that led to the mapping of a number of prospects and leads, the Directors of Nordic believe that the Licence is highly prospective. 

The Licence is located close to existing production in the Danish Central Graben and the Palaeocene Siri trend which makes Denmark the only net oil exporter in the European Union.  The latest available set of official numbers published by the Danish Energy Agency indicates an average daily production of 221,000 barrels/day in 2011, a total of 80.7MMbo for the year.  Remaining reserves in already discovered accumulations are estimated to be in excess of 1 billion barrels as at 1 January 2012.

According to a 2010 Competent Person's Report by Tracs International Consultancy Limited, the Licence contains, totally or partially, six oil prospects and leads with a range of potential recoverable resources of 805 - 7,526MMbo and four gas leads with potential recoverable resources of 1,084 - 7,304 BCF gas.  A discovery of such a magnitude would have a major impact on Denmark as an oil and gas producer.  The mapped structures occur at a range of geological horizons, i.e. Top Chalk, Top Rotliegendes and Top Pre-Permian.  Although all of the above leads and structures are deemed to be high risk (with a chance of success below 10%), the Directors believe that the very large volumes that could potentially be discovered make this area a highly attractive exploration target. 

Nordic has secured an option to acquire 11,600 km existing 2D seismic and a pseudo-3D seismic data volume covering the Licence area, which is presently being processed.  Both 2D and pseudo-3D seismic will be interpreted, together with data from existing wells, to develop drill ready prospects on the licence. Pseudo-3D is a new technology employed in seismic processing which the Directors hope will reveal new information on the prospectivity of the Licence area.  Use of new seismic technology together with innovative exploration concepts was recently used to locate Johan Sverdrup, a 3.3 billion barrel oil discovery off the coast of Norway operated by Lundin.  Similar to Licence 1/13, Johan Sverdrup is situated on mature exploration acreage that has seen extensive seismic and drilling since being included in the first Norwegian licence round in 1967.

The Directors of the Company are responsible for the contents of this announcement.

Categories: Europe Oil Rigs

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