Norsk Hydro has strengthened its position in core operated areas through an agreement with the Norwegian State to acquire interests in eight licences in the North Sea. These licences cover the Oseberg, Oseberg Øst, Oseberg Sør, Tune and Grane fields, and were previously part of the State Direct Financial Interest (SDFI) on the Norwegian Continental Shelf. Hydro pays NOK 3.45 billion for the acquisition.
In the Oseberg area Hydro acquires a 14,4 % interest in licence PL 053, a 7,5 % interest in PL 079 and divests a 6 % interest in PL 171B. Hydro also purchases a 10 % interest in each of PL 190 and PL 034 in the Tune area and a 17 % interest in PL 169B1 in addition to 5% in each of PL169, PL169B2 and PL028C in the Grane area. This increases Hydro's equity from 22,23 % to 34 % in Oseberg, from 32,02% to 34 % in Oseberg Sør, from 19,6 % to 34 % in Oseberg Øst, from 30 % to 40 % in Tune and from 24,4 % to 38 % in Grane.
The purchase of SDFI shares will boost Hydro's production by 35 000 boe per day for the remainder of 2002, with an estimated daily peak production increase of 60 000 boe in 2005. The additional production will be 80 % oil up to 2006, with the proportion of gas gradually increasing from then.
Hydro's SEC proven reserves will grow by approximately 190 million boe, 59 % of which will be oil.
The transaction will be presented in Hydro's consolidated accounts as an investment of NOK 5.8 billion. In addition to the purchase price of NOK 3.45 billion, this figure includes approximately NOK 200 million in investments in the purchased interests after January 1 this year, and approximately NOK 2.1 billion calculated as deferred tax (non-cash item ). The transaction will come into effect on March 19.
Certain statements in this press release are or may constitute "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not in the nature of historical facts may be deemed to be forward-looking statements and may contain identifying words such as "believes", "anticipates", "plans", "expects" and similar expressions. These forward looking statements are based on Hydro's current expectations, assumptions, estimates and projections about the company and the industries in which it engages in business. All forward-looking statements involve risks and uncertainties. For a detailed description of factors that could cause Hydro's actual results to differ materially from those expressed in or implied by such statements, please refer to its annual report on Form 20-F for the year-ended December 31, 2001 and subsequent filings on Form 6-K with the U.S. Securities and Exchange Commission.
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