North Energy Asa · OSL:NORTH

North Energy Asa — Q4 2011 Earnings Presentation

36 slides from North Energy Asa's earnings presentation, Feb 22, 2012

1. Slide 1: North Energy Q4 2011

   North Energy Q4 2011 22 February 2012

2. Slide 2: Important information

   Important information This presentation and its appendices (together the “Presentation”) have been prepared and delivered by North Energy ASA (“North Energy” or the “Company”). The Presentation is prepared for information purposes only, and is not to be used for any other purpose. The Presentation d

3. Slide 3: Agenda

   Agenda  Highlights Q4  Financial update  Exploration update  Outlook & Summary North Energy ASA, Markedsgata 3, Alta, Norway. 3 Phone: (+47) 78 60 79 50 · Fax: (+47) 78 60 83 50 · E-Mail: post@northenergy.no · www.northenergy.no

4. Slide 4: Highlights Q4 and later events

   Highlights Q4 and later events  Fogelberg discovery sold for NOK 70 million  Successful share issue of NOK 150 million  Repair issue of up to NOK 15 million in March  Two new licences from selective APA 2011 application  Disappointing result from drilling of Zapffe in the Barents Sea  Strong f

5. Slide 5: Agenda

   Agenda  Highlights Q4  Financial update  Exploration update  Outlook & Summary North Energy ASA, Markedsgata 3, Alta, Norway. 5 Phone: (+47) 78 60 79 50 · Fax: (+47) 78 60 83 50 · E-Mail: post@northenergy.no · www.northenergy.no

6. Slide 6: Financial capacity improved in 2012

   Financial capacity improved in 2012  Successful share issue of NOK 150 million  Subject to the approval by the Extraordinary General Meeting on 2 March  Sale of Fogelberg adds NOK 70 million of cash to the balance sheet  Exploration loan facility increased to NOK 950 million  Facility with DNB,

7. Slide 7: Fogelberg discovery sold for NOK 70 million

   Fogelberg discovery sold for NOK 70 million  Fogelberg discovery sold to Centrica for NOK 70 million  North Energy farmed in prior to discovery in 2010  Financing 2-3 wells with the proceeds from the sale  Timing right for North to monetize  PDO expected in a couple of years  Low value creatio

8. Slide 8: North Energy ASA – Profit & Loss

   North Energy ASA – Profit & Loss Q4 Q4 Year Year MNOK 2011 2010 2011 2010 Payroll 16,5 16,1 70,9 62,1 Depreciation 2,1 1,5 7,2 4,6 Exploration expenses 198,2 118,6 340,2 179,0 See detailed overview Other operating expenses 10,6 10,4 40,0 43,4 Operating loss -227,4 -146,6 -458,3 -289,2 Finance income

9. Slide 9: High activity level driving exploration costs

   High activity level driving exploration costs Exploration expenses Q4 MNOK  Main cost relating to drilling of Zapffe Dry well PL 530 Heilo 38  Heilo drilling completed Dry well PL 518 Zapffe 136 below budget in Q4 Seismic for Drill or Drop decisions1 6  Drilling exploration wells more than 90% of

10. Slide 10: North Energy ASA - Balance sheet

    North Energy ASA - Balance sheet North Energy ASA, Markedsgata 3, Alta, Norway. 10 Phone: (+47) 78 60 79 50 · Fax: (+47) 78 60 83 50 · E-Mail: post@northenergy.no · www.northenergy.no

11. Slide 11: Net cash according to plan

    Net cash according to plan “Net cash” position Q4 2011  Net cash position of -67 NOK 173 million1  Unused exploration loan -348 554 facility of NOK 412 million  Developing in line with 173 funding plans at the IPO 34 2012 Tax Net working Interest  Exploration facility Cash Net cash 1 refund capi

12. Slide 12: Agenda

    Agenda  Highlights Q4  Financial update  Exploration update  Outlook & Summary North Energy ASA, Markedsgata 3, Alta, Norway. 12 Phone: (+47) 78 60 79 50 · Fax: (+47) 78 60 83 50 · E-Mail: post@northenergy.no · www.northenergy.no

13. Slide 13: New capital supports continued high activity level

    New capital supports continued high activity level  Proceeds from asset sale and share North Energy’s portfolio growth issue supports a strategy of a continued high activity level 6 Appraisal wells 25  Reduces overall risk 5 Exploration wells Licences  Reduces G&A costs per well 20 Number of lice

14. Slide 14: Norvarg – a major gas discovery

    Norvarg – a major gas discovery Feasibility Conceptual Pre- Detailed Eng, Appraisal Production Studies Studies engineering Construction Feb 2012 BOK BOV PDO mmboe  Increased expectations to Norvarg 600  Results from internal Norvarg study suggest a P50 estimate of 260 mmboe1 500 recoverable gas 40

15. Slide 15: Positive signals for Norvarg last month

    Positive signals for Norvarg last month  Gassco1 published a study in January recommending an extension of the North Sea gas grid to the Barents Sea  North Energy preliminary calculations indicates reduced commercial threshold mmboe 600 500 400 300 Commercial threshold LNG 200 100 Commercial thres

16. Slide 16: Positive regional effects of Norvarg

    Positive regional effects of Norvarg  Break through gas production test from the Kobbe formation Norvarg  Has lifted the potential in large areas towards the north and east  Future exploration success depends on differentiating between good and bad Triassic targets  Additional discoveries in the

17. Slide 17: Soaring interest for the Barents Sea

    Soaring interest for the Barents Sea  With multiple large discoveries, Barents Sea wildcats the interest for exploration in 8 100% the Barents Sea is soaring 7 80% Average success rate  Skrugard (160 - 250 million boe1) No. of wildcat wells 6  Havis (190 - 315 million boe1) 5 54% 60%  Norvarg (2

18. Slide 18: Strong position in new growth area

    Strong position in new growth area  In competition with 25 'old' and # Company BARENTS SEA PLAYERS Licenses km2 'new' players in the Barents 1 Statoil 2 Petoro 23 20 4 746 2 553 Sea, North Energy has built up 3 RWE Dea 4 GDF Suez 11 10 983 1 588 a portfolio of 8 licences 5 ENI 6 OMV 9 9 1 277 1 379

19. Slide 19: License map

    License map  Partner in 24 licenses following Fogelberg sale  Barents Sea (8)  Norwegian Sea (8)  North Sea (8)  Two operatorships in the Norwegian Sea  Two awards in APA1 2011  PL 656 in the Norwegian Sea  PL 616 in the North Sea 1) APA = Awards in Predefined Areas North Energy ASA, Markeds

20. Slide 20: PL 450 Storebjørn – high POS oil prospect

    PL 450 Storebjørn – high POS oil prospect PL 450 in the North Sea Acquired 2011 Main prospect Storebjørn Operator Det norske (60%) Hydrocarbons Oil Partners North Energy (15%) Drilling Ongoing Dana Petroleum (25%) PoS 49% Gross mean unrisked 141 mmboe Net mean risked 10 mmboe Work plan Reprocess 3D

21. Slide 21: PL 450 Storebjørn – one of the few remaining

    PL 450 Storebjørn – one of the few remaining undrilled classical «pods» in the Southern North Sea  Second highest POS (49%) in North Energy’s current and past exploration portfolio  Only next to Fogelberg which came in as a discovery  Located between producing fields Tambar and Ula and recent dis

22. Slide 22: PL 450 Storebjørn – two reservoirs and two chances

    PL 450 Storebjørn – two reservoirs and two chances with surrounding discoveries in both  Same two reservoirs as Tambar  Same source kitchen Storebjørn  Similar trap concept Gyda Tambar Storebjørn Tambar Storebjørn Tambar Ula North Energy ASA, Markedsgata 3, Alta, Norway. 22 Phone: (+47) 78 60 79

23. Slide 23: PL 450 Storebjørn – fast track development

    PL 450 Storebjørn – fast track development through infrastructure with spare capacity  Drilled by Mærsk Guardian  Close to existing infrastructure  ~8 km to Ula field  Subsea wells tied in to Ula  Oil export through pipeline via Ekofisk to Teeside North Energy ASA, Markedsgata 3, Alta, Norway.

24. Slide 24: PL 370 / 370 B Kakelborg – drilling Q2 2012

    PL 370 / 370 B Kakelborg – drilling Q2 2012 PL 370 / PL 370 B in the North Sea Acquired 2011 Main prospect Kakelborg Operator Wintershall (40%) Hydrocarbons Oil Partners North Energy (10%) Expected drilling Q2 2012 Agora (30%) PoS 30% Concedo (20%) Gross mean unrisked 108-256 mmboe Net mean risked 3

25. Slide 25: PL 370 / 370 B Kakelborg – prospect display

    PL 370 / 370 B Kakelborg – prospect display 33/5-2 33/6-4  Kakelborg reservoir anomaly  Seismic anomalies known to indicate oil and/or gas  Classical type III anomaly  Inversion responses of Kakelborg ratio suggest a sandy lithology Kakelborg  Rock physics modeling prospect indicate loose sands

26. Slide 26: PL 370 / 370 B Kakelborg – two proven reservoir models and two chances

    PL 370 / 370 B Kakelborg – two proven reservoir models and two chances 33/6-4 33/5-2  HC shows in well 33/5-2  Valid traps on both levels Kakelborg anomaly PL 370 PL 370B N North Energy ASA, Markedsgata 3, Alta, Norway. 26 Phone: (+47) 78 60 79 50 · Fax: (+47) 78 60 83 50 · E-Mail: post@northenerg

27. Slide 27: PL 370 / 370 B Kakelborg – drilling and development

    PL 370 / 370 B Kakelborg – drilling and development  Exploration well spud April 2012  Rigg: Borgland Dolphin  Optional production test (DST)  Development ~35 km  Stand-alone FPSO if large  Offshore loading of oil  Fast track development to spare capacity on Snorre if small North Energy ASA,

28. Slide 28: PL 385 Jette – drilling expected mid 2012

    PL 385 Jette – drilling expected mid 2012 PL 385 in the Norwegian Sea Acquired 2009 Main prospect Jette Operator Statoil (45%) Hydrocarbons Gas cond. Partners North Energy (35%) Expected drilling Q2/Q3 2012 Noreco (20%) PoS 37% Gross mean unrisked 95 mmboe Net mean risked 12 mmboe Work plan Drill on

29. Slide 29: PL 498 Skagen – drilling in 2012

    PL 498 Skagen – drilling in 2012 PL 498 in the North Sea Acquired 2009 Main prospect Skagen Operator Lotos (25%) Hydrocarbons Oil Partners North Energy (25%) Expected drilling 2012 Edison Int. (25%) PoS 36% Skagen 44 (25%) Gross mean unrisked 75 mmboe Net mean risked 7 mmboe Work plan Drill one well

30. Slide 30: Exploration track record and outlook

    Exploration track record and outlook North Energy ASA, Markedsgata 3, Alta, Norway. 30 Phone: (+47) 78 60 79 50 · Fax: (+47) 78 60 83 50 · E-Mail: post@northenergy.no · www.northenergy.no

31. Slide 31: Drilling program North Energy

    Drilling program North Energy 2012 2013 August August Sept. Sept. Mars Mars June June Dec. Dec. Nov. Nov. April April Feb. Feb. May May Jan. Jan. Oct. Oct. July July Spud 29.01. PL 450 Storebjørn Spud 25.04. PL 370 Kakelborg Spud Q3 PL 498 Skagen Spud Q3 PL 385 Jette Spud first half 2013 PL 535 Norv

32. Slide 32: 2012 drilling activity and Drill or Drop decisions

    2012 drilling activity and Drill or Drop decisions  Four wells to be drilled in 2012  Starting January 2012 with PL 450 Storebjørn  Q2 Kakelborg  Q3 Jette  Q3 Skagen  Four drill or drop decisions in 2012  PL 536  PL 526  PL 590  PL 503 Drill or Drop decision 2012 Drill or Drop decision 201

33. Slide 33: Agenda

    Agenda  Highlights Q4  Financial update  Exploration update  Outlook & Summary North Energy ASA, Markedsgata 3, Alta, Norway. 33 Phone: (+47) 78 60 79 50 · Fax: (+47) 78 60 83 50 · E-Mail: post@northenergy.no · www.northenergy.no

34. Slide 34: Outlook

    Outlook  6 months outlook  Storebjørn exploration well in the North Sea  Kakelborg exploration well in the North Sea  Jette exploration well in the Norwegian Sea  Decision on appraisal program for the Norvarg discovery  Drill or drop decision on operated licences PL 526 and PL 590 in the Norwe

35. Slide 35: Summary

    Summary  40% success rate in first five wells  Preparing critical appraisal well for Norvarg  Balanced exploration portfolio with strong footprint in the Barents Sea  Four firm exploration wells in 2012  Testing three pure oil prospects – all close to infrastructure  Financed to continue high

36. Slide 36: Thank you for your attention!

    Thank you for your attention! North Energy ASA, Markedsgata 3, Alta, Norway. 36 Phone: (+47) 78 60 79 50 · Fax: (+47) 78 60 83 50 · E-Mail: post@northenergy.no · www.northenergy.no

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