Norway: Gov’t Approves Valiant’s Acquisition of Stake in Norvarg Discovery

The asset transaction, announced in March, includes sale of a 13 per cent interest in the Norvarg discovery, leaving a 7 per cent interest with Rocksource, and an average reduction of about 50 per cent in the Company’s equity stakes in a further 12 exploration licenses.

The large Norvarg gas discovery made in the Barents Sea during 2011, is estimated to have gross resources between 60 and 300 mmboe. In 2013,Valiant plans to drill a high impact appraisal well on Norvarg during the year using the Leiv  Eiriksson semi-submersible drilling rig.

Under the terms of the asset transaction Valiant will pay USD 10 million in cash and will cover USD 33.4 million in exploration cost on Rocksource’s remaining license interests on the Norwegian Continental Shelf.

A disappointing outcome of the 2011 drilling campaign has left Rocksource in a financially challenging situation, but the deal with Valiant has fulfilled the company’s short term goal to re-establish a more robust financial foundation.

Rocksource CEO Chris Spencer commented on the transaction: “We are pleased to have completed this agreement with Valiant, which resolves our short to medium term financial constraints, while at the same time retaining material upside from our NCS portfolio. Following recent months with extensive strategic reviews, we are convinced that this is the best solution for our shareholders, creating a strong foundation on which to re-establish Rocksource as an active explorer on the NCS.”

Rocksource today announced the decision to drill the first exploration well in its North Sea licence in the first half of 2013. The company plans to drill three wells during the 2013 exploration campaign.