North Sea Energy Inc.

TSX VENTURE : NUK


North Sea Energy Inc.

February 12, 2014 09:50 ET

North Sea Energy Provides Corporate Update

TORONTO, ONTARIO--(Marketwired - Feb. 12, 2014) - North Sea Energy Inc. ("NSE" or the "Company") (TSX VENTURE:NUK) is pleased to provide an update on the Company's forward plans relating to its prospects.

Bagpuss and Blofeld Update

The Bagpuss and Blofeld prospects (Blocks 13/24c and 13/25) are considered by the Company to be prospects with high impact targets and the first well is planned to be drilled in late 2014 or 1H 2015; subject to rig availability. Through the first half of 2014, the partnership will choose a drilling location for the first Bagpuss well and the operator Premier Oil UK Limited ("Premier Oil") will commence the well planning and the site survey in order to prepare for the well.

NSE obtained a competent person's report (CPR) on the prospects in June 2013, confirming 3.6 billion barrel oil in place potential STOIIP (P10), of which NSE owns 15% working interest (see the Company's press release dated June 27, 2013 for further details). A well on the Bagpuss prospect was drilled by Amoco in 1981 and encountered hydrocarbons, but it was not tested.

In November 2013, the Company completed a farm-in agreement with Maersk Oil North Sea UK Limited ("Maersk Oil"). Under the farm-in agreement, Maersk Oil is to carry 100% of NSE's costs, subject to a cap, to drill the initial Bagpuss Prospect exploration well, including a site survey and agreed past costs. In addition, Maersk Oil is to carry 50% of NSE's costs, subject to a cap, of a Bagpuss appraisal well, should one be drilled. In return, Maersk Oil has acquired a 25% working interest in the Licence from NSE. NSE retains a 15% working interest. The other partners in the well are Premier Oil (37.5%), Groliffe Limited (7.5%) and EnCounter Oil Limited ("EnCounter Oil") (15%).

Potential Farm-out of Blocks:

The Company is also actively looking to advance exploration by way of potential farm-out deals, and is currently seeking partners on the following prospects and leads:

Norfolk and Norfolk East Prospects - Blocks 12/16b and 12/17b

Norfolk is in Block(s) 12/16b and Norfolk East is in Block(s) 12/17b. NSE has a 20% working interest in the Blocks. The prospect is located in the Inner Moray Firth, near the Sutherland coast NE-SW basin formed by the Great Glen Fault on the west side and the W-E Wick Fault to the north.

In November 2012, the Company and its partners completed a 2D/3D hi-resolution seismic program on the prospect after receiving approval from DECC. Subsequent to the seismic acquisition, the operator, First Oil Expro Limited (First Oil), has re-evaluated the Norfolk prospect and recommended a well location to the Technical Committee. Currently, there is a joint data room open for the Norfolk prospects in order to facilitate the farm-out process, hosted by First Oil.

Cloud Prospect - Block 14/29b

EnCounter Oil (60% working interest) is hosting a joint data room with NSE (40% working interest) in order to facilitate the potential farm-out of the Cloud prospect, which is currently being reviewed by a number of parties. The Cloud prospect, awarded in the 27th licencing round, is located in the Moray Firth, north of the Goldeneye field, within Upper Jurassic gravity flow sands at depths of between 6,900 and 7,675 feet. Cloud is updip of well 14/29-1 which encountered a 475 foot sequence of good quality middle and early Volgian Claymore sands.

Del Monte and Kipling Leads - Blocks 19/3 and 19/2

The Del Monte and Kipling leads were awarded in the 27th Seaward Licensing Round in the UK North Sea to NSE (40% working interest) and its partner, EnCounter Oil (60% working interest). A joint data room will be hosted in order to facilitate the potential farm-out of the partners' interests in these blocks in Q2 2014.

The Del Monte lead is a stratigraphic trap within the Upper Jurassic Burns Unit sandstone. At Burns Sandstone level, the crest lies at 5,600 feet and the maximum closing contour is 6,100 feet, giving a potential column height of 500 feet.

Golden Phoenix Lead - Block 18/10

The Golden Phoenix lead was awarded in the 27th Seaward Licensing Round in the UK North Sea to NSE (40% working interest) and its partner, EnCounter Oil (60% working interest). A joint data room will be hosted in order to facilitate the potential farm-out of the partners' interests in these blocks in Q2 2014.

The Golden Phoenix lead is a structural trap within the Upper Jurassic Burns Unit sandstone and Middle Jurassic Beatrice Sandstone. The lead lies entirely within the block. At Burns Sandstone level, the crest lies at 3,350 feet, and the maximum closing contour is 3,650 feet, giving a potential column height of 300 ft. At Beatrice Sandstone level, the crest lies at 5,400 feet and the maximum closing contour is 6,100 feet, giving a potential column height of 700 feet.

Other Items

NSE has renewed Auburn Partners' contract and has retained its services through the end of 2014, on the same terms as announced on October 21, 2011.

About North Sea Energy Inc.

North Sea Energy Inc. (TSX VENTURE:NUK) is an oil and gas company that holds a portfolio of high impact interests focused on the Moray Firth in the offshore UK North Sea. These interests include Bagpuss and Blofeld (blocks 13/24c and 13/25), Norfolk (blocks 12/16b and 12/17b), Cloud (block 14/29b), Del Monte (block 19/3) and Golden Phoenix (block 18/10a).

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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