North Sea Energy Inc.
TSX VENTURE : NUK

North Sea Energy Inc.

December 07, 2011 10:50 ET

North Sea Energy Provides Corporate Update

TORONTO, ONTARIO--(Marketwire - Dec. 7, 2011) - North Sea Energy Inc. ("NSE" or the "Company") (TSX VENTURE:NUK) is pleased to announce that it will be participating in the Petroleum Exploration Society of Great Britain, PROSPEX 2011 Conference, December 13 & 14, 2011 in London, England. PROSPEX is the highly successful series of prospect fairs and the UK's leading networking event for exploration and development in the North Sea. The Company is seeking partners to potentially farm down its 50% interest in the 13-28b block (the "Bobcat Prospect"), 22-5c block (the "Bass Prospect") and 15-21d block (the "Bluebird Discovery and Blackbird Prospect").

About the prospects:

Bobcat Prospect - 13/28b

The block is located in the Inner Moray Firth and is situated immediately south of the Ross Field and southwest of the Captain Field. The water depth at the block location is approximately 230 feet. A prospect, referred to as the "Bobcat", has been identified at the Punt Sands level.

The Bobcat Prospect has been identified using 3D seismic on Block 13/28b in a three way dip closed structural and stratigraphic trap within the Lower Cretaceous Punt Sands. The Bobcat Prospect has been assessed volumetrically using probabilistic methods. The table below summarizes the undiscovered oil initially-in-place and prospective oil resources.

Gross Undiscovered In-Place and Prospective Resources (Unrisked)(1,2)
Block 13/28b, North Sea,
United Kingdom (As of July 31, 2011)*
Gross3
Low
Estimate
(P90)
Best
Estimate
(P50)
High
Estimate
(P10)
Oil Initially-In-Place (MMbbl) 17.0 48.3 137.7
Prospective Resources (MMbbl) 3.7 11.5 35.7
1. Undiscovered resources (equivalent to undiscovered petroleum initially-in-place) are those quantities of petroleum that are estimated, as of a given date, to be contained in accumulations yet to be discovered.
2. Prospective resources are those quantities of gas estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery (geological chance of success) and a chance of development (economic, regulatory, market and facility, corporate commitment and political risks). The chance of commerciality is the product of these two risk components. These estimates have not been risked for either chance of discovery or chance of development. There is no certainty that any portion of the prospective resources will be discovered and, if discovered, there is no certainty that it will be developed or, if it is developed, there is no certainty as to either the timing of such development or whether it will be commercially viable to produce any portion of the resources.
3. These are the gross undiscovered initially-in-place and potentially recoverable oil volumes estimated for the undrilled Bobcat Lead on Block 13/28b, assuming only oil, without any adjustments for working interest.

*From Sproule International Limited, July 31, 2011 report prepared in accordance with COGE Handbook reserves and resource definitions which are compliant with the requirements of National Instrument 51-101.

Bass Prospect - 22/5c

The block is located in the central North Sea, approximately 250 kilometres northeast of Aberdeen, Scotland, which has established oil and gas infrastructure and is close to major markets. The block sits between the Fleming gas condensate field to the north and the Everest gas condensate field to the south, which is the starting point for the 36 inch diameter, 408 km long central area transmission system ("CATS") export pipeline to Teesside. The CATS riser platform receives gas from a number of fields including Everest.

One prospect has been identified on Block 22/5c in the Tertiary Section based on the seismic interpretation. This prospect has been assessed volumetrically using probabilistic methods. The table below summarizes the undiscovered initially-in-place and prospective resource volumes in barrels of oil equivalent.

Gross Undiscovered In-Place and Prospective Resources (Unrisked)(1,2)
Block 22/5c, North Sea,
United Kingdom (As of July 31, 2011)*
Gross3
Low
Estimate
(P90)
Best
Estimate
(P50)
High
Estimate
(P10)
Mean
Petroleum Initially-In-Place (MMboe)4 3.9 12.2 25.7 13.8
Prospective Resources (MMboe) 4 2.4 7.8 16.6 8.9
1. Undiscovered resources (equivalent to undiscovered petroleum initially-in-place) are those quantities of petroleum that are estimated, as of a given date, to be contained in accumulations yet to be discovered.
2. Prospective resources are those quantities of gas estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery (geological chance of success) and a chance of development (economic, regulatory, market and facility, corporate commitment and political risks). The chance of commerciality is the product of these two risk components. These estimates have not been risked for either chance of discovery or chance of development. There is no certainty that any portion of the prospective resources will be discovered and, if discovered, there is no certainty that it will be developed or, if it is developed, there is no certainty as to either the timing of such development or whether it will be commercially viable to produce any portion of the resources.
3. These are the gross undiscovered initially-in-place and potentially recoverable volumes estimated for the undrilled Bass prospect of the Block 22/5c, assuming only gas with condensate, without any adjustments for working interest.
4. These resources are reported as millions of barrels of oil equivalent ("MMboe") to reflect presence of both gas and condensate in the prospect. Barrels of oil equivalent (BOEs) may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf: 1 bbl has been used and is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

* From Sproule International Limited, July 31, 2011 report prepared in accordance with COGE Handbook reserves and resource definitions which are compliant with the requirements of National Instrument 51-101.

Bluebird Discovery and Blackbird Prospect - 15/21d

The Prospect Area lies less than 220 kilometres east of the Scottish mainland. Two potential targets within Block 15/21d have been identified in the Jurassic Section. The first is referred to as the "Bluebird Discovery", and was identified by a well test from well 15/21b-50, and the second is referred to as the "Blackbird Lead", and was identified by interpretation of the seismic data. These targets have been assessed volumetrically using probabilistic methods. The table below summarizes the discovered initially-in-place and contingent resource oil volumes associated with the Bluebird Discovery, and the undiscovered oil initially-in-place and prospective resources associated with the Blackbird Lead.

Gross Discovered In-Place and Contingent Resources, (Unrisked)(1,2)
Bluebird Discovery, Block 15/21d, North Sea,
United Kingdom (As of July 31, 2011)*
Gross3
1C
(P90)
2C
(P50)
3C
(P10)
Mean
Total
Oil Initially-In-Place (MMstb) 9.01 16.1 32.8 19.5
Contingent Resources (MMstb) 1.81 3.9 8.69 4.86
On Block (35%)
Oil Initially-In-Place (MMstb) 3.15 0 0
Contingent Resources (MMstb) 0.63 0 0
1. Discovered Petroleum Initially-In-Place (equivalent to discovered resources) is that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production.
2. Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development, but which are not currently considered to be commercially recoverable due to one or more contingencies. Contingencies may include factors such as economic, legal, environmental, political, and regulatory matters, or a lack of markets. It is also appropriate to classify as contingent resources the estimated discovered recoverable quantities associated with a project in the early evaluation stage. Contingent Resources are further classified in accordance with the level of certainty associated with the estimates and may be subclassified based on project maturity and/or characterized by their economic status. Contingent resources have an associated chance of development (economic, regulatory, market and facility, corporate commitment or political risks). There is no certainty that any portion of the contingent resources will be developed or, if it is developed, there is no certainty as to the timing of such development or that it will be commercially viable to produce any portion of the contingent resources.
3. These are the gross discovered initially-in-place and contingent resources which are potentially recoverable oil volumes estimated for the entire Bluebird discovery on Block 15/21d, assuming oil, without any adjustments for working interest.

*From Sproule International Limited, July 31, 2011 report prepared in accordance with COGE Handbook reserves and resource definitions which are compliant with the requirements of National Instrument 51-101.

Gross Undiscovered In-Place and Prospective Resources, (Unrisked)(1,2)
Blackbird Lead, Block 15/21d, North Sea,
United Kingdom (As of July 31, 2011)*
Gross3
1C
(P90)
2C
(P50)
3C
(P10)
Mean
Total
Oil Initially-In-Place (MMstb) 2.32 5.3 11.9 6.43
Prospective Resources (MMstb) 0.305 1.53 3.66 1.92
On Block (35%)
Oil Initially-In-Place (MMstb) 0 2.23 5.0
Prospective Resources (MMstb) 0 0.95 2.27
1. Undiscovered resources (equivalent to undiscovered petroleum initially-in-place) are those quantities of petroleum that are estimated, as of a given date, to be contained in accumulations yet to be discovered.
2. Prospective resources are those quantities of gas estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery (geological chance of success) and a chance of development (economic, regulatory, market and facility, corporate commitment and
political risks). The chance of commerciality is the product of these two risk components. These estimates have not been risked for either chance of discovery or chance of development. There is no certainty that any portion of the prospective resources will be discovered and, if discovered, there is no certainty that it will be developed or, if it is developed, there is no certainty as to either the timing of such development or whether it will be commercially viable to produce any portion of the resources.
3. These are the gross undiscovered initially-in-place and potentially recoverable oil volumes estimated for the Blackbird Lead on Block 15/21d, assuming only oil, without any adjustments for working interest.

* From Sproule International Limited, July 31, 2011 report prepared in accordance with COGE Handbook reserves and resource definitions which are compliant with the requirements of National Instrument 51-101.

Additionally, NSE would like to announce that the Bluebird Discovery, on block 15-21d, has positively restated its 'on-block' numbers and category of its resource to a Discovered In-Place Contingent Resource. The on block numbers have increased as per the table above.

Capitalized terms used in this press release but not otherwise defined herein shall be given the meanings ascribed thereto in the joint management information circular of NSE and Ranger Energy Ltd. dated August 26, 2011, as amended by the Company's press release dated September 19, 2011 (together, the "Circular"), which is available and filed on SEDAR under the Company's profile at www.sedar.com. Additional information in the Circular with respect to each of the aforementioned prospects, except as restated herein, is hereby incorporated by reference herein, including without limitation, the risks and level of uncertainty associated with recovery of the resources, the significant positive and negative factors relevant to each estimate, in respect of contingent resources the specific contingencies which prevent the classification of the resources as reserves and the cautionary statements made in the Circular with respect to each prospect.

About North Sea Energy Inc.

NSE (TSX VENTURE:NUK) is a UK focused oil and gas exploration and production ("E&P") company listed on the TSX Venture Exchange. NSE is producing light oil from the Jacky field, located in the Inner Moray Firth off the Scottish coast and has acquired six blocks in the North Sea, with a further three blocks pending DECC approval.

Forward-looking statements

Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. In particular, forward-looking information in this press release includes, but is not limited to, statements with respect to oil reserves and resources and future revenues. Although we believe that the expectations reflected in the forward-looking information are reasonable, there can be no assurance that such expectations will prove to be correct. We cannot guarantee future results, performance or achievements. Consequently, there is no representation that the actual results achieved will be the same, in whole or in part, as those set out in the forward-looking information. Forward-looking information is based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking information. Some of the risks and other factors that could cause the results to differ materially from those expressed in the forward-looking information include, but are not limited to: general economic conditions in Canada, the United States, UK and globally; industry conditions, including fluctuations in the prices of oil and natural gas; governmental regulation of the oil and gas industry, including environmental regulation; unanticipated operating events or performance which can reduce production or cause production to be shut in or delayed; failure to obtain industry partner and other third party consents and approvals, if and when required; competition for and/or inability to retain drilling rigs and other services; the availability of capital on acceptable terms; the need to obtain required approvals from regulatory authorities; stock market volatility; volatility in market prices for oil and natural gas; liabilities inherent in oil and natural gas operations; competition for, among other things, capital, acquisitions of reserves, undeveloped lands, skilled personnel and supplies; incorrect assessments of the value of acquisitions; geological, technical, drilling, processing and transportation problems; changes in tax laws and incentive programs relating to the oil and gas industry; failure to realize the anticipated benefits of acquisitions and dispositions; and the other factors. Readers are cautioned that this list of risk factors should not be construed as exhaustive.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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