Norse Sells Another Slice to Shareholder Megaron for $2M

It looks like today’s “extraordinary shareholder’s meeting” for Marcellus & Utica Shale driller Norse Energy, held at corporate HQ in Norway, has yielded the desired result. As MDN pointed out in our sneak preview of the shareholder presentation (see this MDN story), Norse was pitching existing shareholders on the concept of giving Norse more money to drill because “New York is almost ready to allow drilling” and when that happens, Norse will need the cash to ramp up operations. (Plus, they need the cash to keep going until then.)

Norse just issued a press release that they’ve raised an additional $2 million from existing shareholder Megaron AS, who agreed to a convertible loan. It was a good deal (potentially) for Megaron—they’re getting 10% interest on the loan.

All of which means Norse has just sold off another slice of the company to stay afloat until they can finally drill in New York. A “convertible loan” is that loan that will convert to stock (i.e. ownership).

From the Norse press release:

Norse Energy Corp. ASA announces that the company has negotiated and executed a convertible loan agreement with Megaron AS, an existing Norse Energy shareholder.

As approved by today’s Extraordinary General Meeting (“EGM”), the loan will be 12,000,000 NOK [~$2 million] at an interest rate of ten percent per annum, with a maturity date of 15 July 2015. The loan will be unsecured and may be converted into shares in Norse Energy. The conversion price will be the lesser of the volume weighted average trading price the five days preceding the payment day of the loan or the lowest subscription price for private placements prior to 1 July 2015.

The convertible loan will provide additional flexibility and liquidity as Norse Energy awaits finalization of the SGEIS regulations in New York, needed to unlock the full value of Norse’s portfolio of shale oil and gas resources.

Norse Energy owns or leases approximately 130,000 net acres in New York State of which ~33,000 lies in the liquids rich shale fairways of Western New York, and the remaining ~97,000 net acres lies in the Marcellus and Utica natural gas fairways of Central New York. Contingent resources total ~917 MMBOE or ~5.2 TCFGE.*

*Norse Energy Corp (Jul 5, 2012) – Norse Energy Corp ASA: Norse Announces Convertible Loan