A smaller, new companys view on research

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A smaller, new companys view on research
The Local Energy Company

• FRESCO Meeting, August 29th. 2007
• Reinert Seland

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A smaller, new

• 13 awards in license rounds
• 10 asset deals
• Acquisition of Altinex ASA completed in 4 months
• The only company on the Norwegian Continental
  Shelf to pre-qualify as a licensee and an
  operator in the same year
• Consolidate Noreco and Altinex and capture
  synergies
• Integration process of the two companies ongoing
• Commence drilling campaign 3Q 2007 extensive
  drilling over the next 18 months
• Bring five discoveries on stream by 2010
• Listing of Noreco at the Oslo Stock Exchange
  targeted in Q4 2007
• Noreco share currently trading at Norwegian OTC
  list
• Portfolio rationalization and optimization
• Dispose non-core assets, including oil services

Develop Noreco into a leading independent oil and
gas company in the North Sea
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North Sea portfolio

• Noreco has built a balanced EP portfolio
• 7 producing assets generating substantial cash
  flow
• Norway Brage, Enoch
• Denmark South Arne, Lulita, Siri, Nini, Cecilie
• 14 discoveries, of which 5 to be brought on
  stream by 2010
• Norway Oselvar, South East Tor
• Denmark Rau, Nini East
• UK Huntington
• 45 licenses - extensive exploration drilling
  program over the next 2-3 years

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The needs of a newstart

• Money
• People Licenses from organic or inorganic
  activity
• Basic tools / data
• Research is normally not in the minds of
  newstarts, unless there is a specific technology
  idea behind the company
• .. and that is probably ok, as most oil has been
  found by basic, conventional methods applied by
  skilled people
• so also for Noreco.

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Research until now

• Geochemistry
• New source rock models in not so well known
  basins
• Project based on old friends (UiO)
• Lithology and fluid prediction (LFP II)
• JIP with around 20 smaller and larger companies
• Rock physics and seismic
• Based on operational needs and personell
  knowledge / specialities
• Research is strongly guided by operatioonal needs

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Research priorities

• Exploration and development priorities
• 1. Classical structural traps in proven
  hydrocarbon provinces
• 2. As above with stratigraphic components
• 3. As above, but may increase risk related to for
  instance source rock
• 4. Reduce risk as much as possible with
  alternative data
• Giving the following research and development
  priorities
• 1 and 2 Imaging tools (2 -3 and 4D seismic)
• 2 Sedimentology and analogues
• 3 Classical source rock studies
• 4 Remote sensing tools giving additional data

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Personell

• Will never enter a project without being able to
  follow it up and implement the results in
  operational work.
• Personnel with specific knowledge and experience
• Knowledge of, and network into research
  environments
• Capacity

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Competence matrix
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Source of money

• Gradually increase the research activities as the
  operated activities increase
• stay very close to operational needs, meaning a
  tencdency to do development / assistance projects
  instead of purely research work
• Is there a need for general (governmental)
  incitements for the companies to perform
  research?
• Companies without operated activities
• Companies with limited operated activity
• and as the priorities are probably not very
  different for the older, larger companies, also
  for more pure / academic research?

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www.noreco.com