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Annual General Meeting Presentation

Annual General Meeting Presentation. June 21, 2013 Oslo, Norway Mark Dice, CEO. Important information.

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Annual General Meeting Presentation

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  1. Annual General Meeting Presentation June 21, 2013 Oslo, Norway Mark Dice, CEO

  2. Important information THIS PRESENTATION (HEREINAFTER REFERRED TO AS THE “PRESENTATION”) HAS BEEN PREPARED BY NORSE ENERGY CORP. ASA (”NORSE” OR THE ”COMPANY”) EXCLUSIVELY FOR INFORMATION PURPOSES, AND DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY FINANCIAL INSTRUMENTS. THE DISTRIBUTION OF THIS PRESENTATION AND THE OFFERING, SUBSCRIPTION, PURCHASE OR SALE OF SECURITIES ISSUED BY THE COMPANY IN CERTAIN JURISDICTIONS IS RESTRICTED BY LAW, INCLUDING WITHOUT LIMITATION THE UNITED STATES. PERSONS INTO WHOSE POSSESSION THIS PRESENTATION MAY COME ARE REQUIRED BY THE COMPANY TO INFORM THEMSELVES ABOUT AND TO COMPLY WITH ALL APPLICABLE LAWS AND REGULATIONS IN FORCE IN ANY JURISDICTION IN OR FROM WHICH IT INVESTS OR RECEIVES OR POSSESSES THIS PRESENTATION AND MUST OBTAIN ANY CONSENT, APPROVAL OR PERMISSION REQUIRED UNDER THE LAWS AND REGULATIONS IN FORCE IN SUCH JURISDICTION, AND THE COMPANY SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY FOR THESE OBLIGATIONS. THIS PRESENTATION INCLUDES AND IS BASED ON, AMONG OTHER THINGS, FORWARD-LOOKING INFORMATION AND STATEMENTS. SUCH FORWARD-LOOKING INFORMATION AND STATEMENTS ARE BASED ON THE CURRENT EXPECTATIONS, ESTIMATES AND PROJECTIONS OF THE COMPANY OR ASSUMPTIONS BASED ON INFORMATION AVAILABLE TO THE COMPANY. SUCH FORWARD-LOOKING INFORMATION AND STATEMENTS REFLECT CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS, UNCERTAINTIES AND ASSUMPTIONS. THE COMPANY CANNOT GIVE ANY ASSURANCE AS TO THE CORRECTNESS OF SUCH INFORMATION AND STATEMENTS. SEVERAL FACTORS COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS THAT MAY BE EXPRESSED OR IMPLIED BY STATEMENTS AND INFORMATION IN THIS PRESENTATION, INCLUDING, AMONG OTHERS, RISKS OR UNCERTAINTIES ASSOCIATED WITH THE COMPANY’S BUSINESS, SEGMENTS, DEVELOPMENT, GROWTH MANAGEMENT, FINANCING, MARKET ACCEPTANCE AND RELATIONS WITH CUSTOMERS, AND, MORE GENERALLY, GENERAL ECONOMIC AND BUSINESS CONDITIONS, CHANGES IN DOMESTIC AND FOREIGN LAWS AND REGULATIONS, TAXES, CHANGES IN COMPETITION AND PRICING ENVIRONMENTS, FLUCTUATIONS IN CURRENCY EXCHANGE RATES AND INTEREST RATES AND OTHER FACTORS. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES MATERIALISE, OR SHOULD UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE DESCRIBED IN THIS DOCUMENT. THE COMPANY DOES NOT INTEND, AND DOES NOT ASSUME ANY OBLIGATION, TO UPDATE OR CORRECT THE INFORMATION INCLUDED IN THIS PRESENTATION. IN PARTICULAR, AND WITHOUT IN ANY WAY LIMITING THE GENERALITY OF THE FOREGOING, THE FUTURE VALUE AND EARNINGS OF THE COMPANY IS DEPENDENT ON, AMONGST OTHER THINGS, THE TIMELY ISSUANCE OF A SUPPLEMENTAL GENERIC ENVIRONMENTAL IMPACT STATEMENT FOR THE STATE OF NEW YORK WHICH ALLOWS THE COMPANY TO IMPLEMENT HIGH PRESSURE HYDRAULIC FRACTURING ON TERMS THAT ARE COMMERCIALLY ACCEPTABLE TO THE COMPANY. THIS PRESENTATION DOES NOT ADDRESS ALL RISK FACTORS THAT MAY AFFECT THE RESULTS, PERFORMANCE OF ACHIEVEMENTS OF THE COMPANY. AND INVESTORS SHOULD SEEK AND CAREFULLY CONSIDER RELEVANT RISK FACTORS BEFORE ANY INVESTMENT DECISION IS MADE. THERE MAY HAVE BEEN CHANGES IN MATTERS WHICH AFFECT THE COMPANY SUBSEQUENT TO THE DATE OF THIS PRESENTATION. NEITHER THE ISSUE NOR DELIVERY OF THIS PRESENTATION SHALL UNDER ANY CIRCUMSTANCE CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THE AFFAIRS OF THE COMPANY HAVE NOT SINCE CHANGED, AND THE COMPANY DOES NOT INTEND, AND DOES NOT ASSUME ANY OBLIGATION, TO UPDATE OR CORRECT ANY INFORMATION INCLUDED IN THIS PRESENTATION. THE CONTENTS OF THIS PRESENTATION ARE NOT TO BE CONSTRUED AS LEGAL, BUSINESS, INVESTMENT OR TAX ADVICE. EACH RECIPIENT SHOULD CONSULT WITH ITS OWN LEGAL, BUSINESS, INVESTMENT AND TAX ADVISER AS TO LEGAL, BUSINESS, INVESTMENT AND TAX ADVICE. THIS PRESENTATION IS SUBJECT TO NORWEGIAN LAW, AND ANY DISPUTE ARISING IN RESPECT OF THIS PRESENTATION IS SUBJECT TO THE EXCLUSIVE JURISDICTION OF NORWEGIAN COURTS WITH OSLO CITY COURT AS EXCLUSIVE VENUE.

  3. Accomplishments 2012 • HSE – zero lost time injuries and no environmental incidents • Costs – reduced from over USD 1 million to ~ USD 0.5 million per month • Sales – sold Herkimer production and associated right of way • Debt – reduced from ~ USD 88 million in Dec 2011 to ~ USD 25 million in Dec 2012 • Shale – optimized appraisal and development plans • Resources – grew certified resources to 951 net MMBOE, the highest in the company’s history 2013 year to date • DIP* Financing – secured USD 3.8 million for NEC USA/NEHI • Restructuring – executed agreement that facilitated a comprehensive restructuring of the group’s balance sheet and provided NOK 7.1 million for NEC ASA • Debt – reduced to ~ USD 11 million in June 2013 * DIP = Debtor in Possession Financing

  4. USD Billions in PV10 potential from four excellent economically attractive shale projects WNY: Liquids-rich gas in Marcellus and Upper Devonian, and dry gas in Utica CNY: Dry gas in Marcellus and Utica Industry continues to report outstanding well results in nearby states, and build more export infrastructure Top 4 Projects Development plans are designed Includes ~ 2,300* horizontal wells * Total number of wells would be ~ 3,400 for Norse’s entire portfolio of projects Significant Asset Value Externally Certified 2C Contingent Resources Single Well Economics for Top 4 Projects

  5. NEC left with ~USD 11 million in debt post-restructuring: ~USD 3.8 million DIP loan ~USD 1.2 million shareholder loans ~USD 6.0 million NEC 07 bond debt Debt could be reduced further To ~USD 4 million If NEC 07 converts If new shareholder loans convert Restructuring also provides liquidity but only into 3Q 2013 Further extension of the runway requires asset sales and/or additional equity or debt Restructuring Leaves Low Debt

  6. The restructuring is an agreement between the Company and other required stakeholders containing numerous different but interlinked elements EGM approval on 31 May 2013 an important step to restructure the Company after a lengthy period of complex negotiations For the restructuring to work, all elements must be successfully completed One key impending element is the Rights issue that is designed to provide an opportunity for shareholders to invest Failure of any one of the elements will jeopardize the overall restructuring Restructuring Update

  7. Business Plan • 2013/2014 • Market assets and/or seek external financing • Pay off US creditors and exit Chapter 11 • Secure 1-year operating cash runway • Cash need: USD ~16 million • 2015 onwards: • Pursue Joint Venture opportunities to leverage shale play appraisal and development • Realize large value potential of assets • Challenges: • SGEIS • Cash

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