Side 1
BNCC MEMBERSHIP LUNCHEON
Tuesday, February 26th
CFO Anders Kapstad
BNCC MEMBERSHIP LUNCHEON
Tuesday, February 26th
CFO Anders Kapstad
Norse Energy at a glance
Norse’s Vision and Objectives
Bovespa and the “Novo Mercado”
“Novo Mercado” Requirements
Company Preparation
Costs
Learning Lessons
AgendaAgenda
Company OverviewCompany Overview
NORSE ENERGY CORP. ASANORSE ENERGY CORP. ASA
Norse Energy USA
Norse Energy USA
E&P (Operator)E&P (Operator)
PipelinePipeline
Gas marketingGas marketing
• Onshore gas production
Norse Energy Brazil
Norse Energy Brazil
E&P (Partner)E&P (Partner)
•Offshore gas and oil production
Market cap:
NOK 1.7 billion
2P reserves (2007):
48 MMBOE
Contingent resources:
39 MMBOE
Exploration potential:
232 MMBOE (unrisked, recoverable – pre-R9)
Production Q4-07:
5,000 boe/day
Market cap:
NOK 1.7 billion
2P reserves (2007):
48 MMBOE
Contingent resources:
39 MMBOE
Exploration potential:
232 MMBOE (unrisked, recoverable – pre-R9)
Production Q4-07:
5,000 boe/day
Norse Energy do Brasil at a GlanceNorse Energy do Brasil at a Glance
NORSE ENERGY CORP. ASA(Listed in Oslo)
NORSE ENERGY CORP. ASA(Listed in Oslo)
E&P (Partner & Operator)E&P (Partner & Operator)
• Offshore gas and oil production
100%
NORSE ENERGY DO BRASILNORSE ENERGY DO BRASIL
Assets Ownership
(%) Location
Production assets
Manati gas field 10.0 Camamu-Almada Basin (Offshore)
Coral field 35.0 Santos Basin (Offshore)
Development assets
Sardinha field 20.0 Camamu-Almada Basin (Offshore)
Cavalho Marinho field 50.0 Santos Basin (Offshore)
Estrela-do-Mar field 65.0 Santos Basin (Offshore)
Exploration assets
BCAM-40 block 10.0 Camamu-Almada Basin (Offshore)
BM-CAL 5 block 18.3 Camamu-Almada Basin (Offshore)
BM-CAL 6 block 18.3 Camamu-Almada Basin (Offshore)
BT-REC-22 30.0 Reconcavo Basin (Onshore part of Camamu basin)
BT-REC-30 30.0 Reconcavo Basin (Onshore part of Camamu basin)
Round 9 50.0 Santos Basin (Offshore)
Why Brazil?Why Brazil?
• “…there is the potential for many more discoveries on the scale of Tupi—which itself is the world's second-biggest strike in 20 years”.
• “Petrobras announced Nov. 8 it has found between 5 billion and 8 billion barrels of light oil and gas at the Tupi field (..) the largest ever in deep waters. Perhaps more important, Petrobras believes Tupi may be Brazil's first of several new "elephants," an industry term for outsize fields of more than 1 billion barrels”.
BusinessWeek, 19 November 2007
The Economist, 15 November 2007
• Large underexplored area
• Only 22,000 wells drilled to date
• Increasing government focus in Oil & Gas industry
• Infrastructure build-up
• Favorable macro-environment
• Petroleum tax regime, strong currency, increasing GDP growth
• Listing the Brazilian subsidiary rather than follow-on offers in Norway, or BDR* of the Norwegian entity in the Brazilian market
– Offer of pure Brazilian play, only pure E&P publicly listed company on Bovespa
– Brazil as one of the most promising oil frontiers in the world (large potential, under explored basins)
– Improved access to Brazilian and international capital markets
Norse’s Vision and ObjectivesNorse’s Vision and Objectives
*Brazilian Depositary Receipts – international stock values issued in Brazil by international based companies
Bovespa and the Novo MercadoBovespa and the Novo Mercado
• Unique Brazilian stock exchange market
• Largest stock market in Latin America (70% of the region’s traded volume)
• 64 IPOs in 2007
• Novo Mercado (Tag Along) – listing segment where companies voluntarily follows additional corporate governance requirements
– Stock value influenced by shareholders’ additional rights compared to other listings in Bovespa
• Typical investor structure: 70 % international investors (qualified institutional buyers), 20 % Brazilian institutional Investors, 10 % Brazilian retail investors
30 000
40 000
50 000
60 000
70 000
2006 2007 2008
• Only common stocks issued (no preferred stocks)
• Tag along rights to all shareholders of the company
• Board of directors with minimum of five members. At least 20% of the board as independent BOD members
• At least 25% of free float
• Minimum 25 % of of net result dividend distribution
• International standards of financial statements IFRS or US GAAP (requirement from 2009)
• Yearly meetings with analysts and investors
• Public annual calendar – BOD meetings, annual shareholders meeting, quarterly reports
• Acceptance of Câmara de Arbitragem do Mercado to solve shareholders’ conflicts
Novo Mercado RequirementsNovo Mercado Requirements
• Choose financial advisor– Largests investment banks in Brazil:
• UBS Pactual• Credit Suisse• Banco Itau• Unibanco
• Company valuation
• Choose coordinators (sole/ joint bookrunner)
• Choose local and international lawyers
• Audited numbers less than 120 days before filing with CVM (Brazilian SEC)
• Allocate a team responsible for IPO preparation
• Required time : at least 6 months
Company PreparationCompany Preparation
• Costs include:
– Underwriting fees
– Legal fees (US and Brazilian legal team)
– Auditing costs
– Printing
– Travel
– Bovespa related costs
• Plus internal time
Costs: 5-6 % of total deal Costs: 5-6 % of total deal
• Very demanding and timeconsuming process for the company and the involved employees
• Make sure all company numbers and facts are available and well documented (legal requirements)
• Challenging with prospectus in two languages for different markets
• Important to have clear communication procedures between involved parties (company, lawyers, auditors, banks)
Learning LessonsLearning Lessons