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Norse Energy Special Shareholder Appeal – Sneak Preview

sneak previewOn July 5, Norse Energy Corp will hold what they call an “Extraordinary General Meeting” (EGM) for shareholders in Oslo, Norway. Norse Energy’s CEO Mark Dice will present to shareholders using the PowerPoint embedded below. MDN has included a rundown of what’s in the slides.

For better or worse, Norse has most of its investments in leases in New York State, and the now four-year long delay in adopting new drilling rules, called the SGEIS, has strained the company’s resources. They’ve refinanced debt, sold off assets, taken on investors and have done whatever they can to “hang in there” until drilling finally begins in New York. The slides in the presentation show just how key New York’s decision is to Norse’s future.

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Norse Says NY Force Majeure Settlement Doesn’t Apply to Them

MDN reported today that New York Attorney General Eric Schneiderman’s office struck a deal with Chesapeake Energy over the issue of extending landowner leases in New York using the “force majeure” clause in the contract (see this MDN story). Norse Energy issued a press release saying essentially that the deal does not apply to them, and their force majeure claims are still in place until overturned by a court.

Here’s the Norse press release:

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Norse Energy: The Little Driller that Could

You have to admire Norse Energy Corp. (subsidiary of the larger Norwegian company of the same name). They rolled the dice by leasing most of their acreage for shale gas drilling in New York State, thinking there was no way it would take this long (now four years) for New York to begin high volume hydraulic fracturing. But it has taken this long, and Norse has tried to stay alive by selling off various assets, reducing staff, restructuring debt and in general doing whatever it takes to “hang in there.”

Just a few weeks ago Norse announced they were shuttering their Buffalo office and heading back to Houston (see this MDN story).

But the plucky Norse, not ready to throw in the towel quite yet, found encouragement in yesterday’s leaked trial balloon announcement that Gov. Andrew Cuomo may begin to allow very limited fracking soon (see this MDN story).

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Norse Energy Shutting Down NY Office, Moving to Houston

For more than year, MDN has periodically reported on Norse Energy as they have struggled to hold on, waiting for New York State to finally start issuing horizontal hydraulic fracturing drilling permits (see MDN’s coverage here). Norse’s strategy has been to roll the dice that New York will allow shale gas drilling. Drilling is always risky, but betting the company on New York politicians is truly a Las Vegas kind of gamble.

In order to keep going, Norse has sold off various assets over the past year. According to their first quarter 2012 update (see below), they at least have enough money in the bank to keep their U.S. operations going through the third quarter of this year. And they still have a controlling interest in 135,000 acres in New York, much of it in the Marcellus and Utica Shale play areas, should New York finally get off the dime. But in a sign that they may be giving up on the Empire State, Norse is shutting down it’s New York office and heading back to Houston.

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Norse Energy Sells Off Another Piece of the Company

Norwegian driller Norse Energy’s U.S. subsidiary, with significant acreage in upstate New York, continues to sell off bits and pieces of its New York operation. Norse’s strategy has been to stay alive long enough for New York to adopt new drilling regulations and lift the de facto moratorium on Marcellus and Utica Shale drilling in the state. Norse’s latest sale is to a former Norse CEO.

From the Norse press release:

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Norse Energy Continues Selling Pieces of the Company

Norse Energy, with leased acreage in both the Marcellus and Utica Shales in New York State, has been fighting to keep the company afloat until New York finally allows hydraulic fracturing and they can take advantage of their leaseholds. But to keep holding on, they’ve sold off bits and pieces of their leaseholds, as well as bits and pieces of the company. A few weeks ago they converted $3.5 million of bonds (or debt) into stock (or ownership) of the company (see this MDN story).

Yesterday, we learned they’ve sold off another $12.5 million of the company in another bonds for stock swap deal. And now they’re making the same offer to all of their bondholders: Let’s make a deal—soon.

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Norse Energy Converts $3.5M in Bonds into Stock Ownership

Norse Energy, with substantial leases in New York State, clings to the hope that New York will soon allow shale gas drilling. In the meantime, they continue to try and hold on. Last week they sold some of their NY acreage along with a slice of the royalty rights on acreage they retain for $26.7 million (see this MDN story). Today we learn that Norse is converting $3.5 million worth of debt they owe into equity. That is, they’ve sold off another slice of the company by swapping bonds for stocks.

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Norse Energy Sells Some of Its NY Acreage/Interests

Norwegian gas driller Norse Energy has sold off some of its leased acreage in Central New York State, along with a slice of future royalties in acreage for which it retains control. The complicated deal to an unnamed buyer for $26.7 million is to sell all interests in 22,700 acres, and various rates of royalty interests on other leases that Norse retains (see the press release below).

Norse will retain control of 160,000 leased acres in New York, of which 110,000 acres are located in the Marcellus and Utica Shale play areas, in the hope that New York will soon release final drilling rules that will allow it to tap into shale gas in the state.

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Bradford Drilling Sues Partner Norse Energy for No Drilling

Norse Energy Corp, the U.S. subsidiary of the Norwegian energy company, owns leases for 180,000 net acres in New York State, 130,000 of those acres being in the Marcellus and Utica Shale plays. Norse bet the farm on New York allowing shale gas drilling long before now, and they lost (NY is still months, if not years away from allowing shale gas drilling). Norse has put their New York acreage on the auction block, looking for another company to buy it.

In the meantime, one of Norse’s drilling partners is suing them for lack of drilling according to their agreement. That agreement had nothing to do with shale gas, but instead was drilling in the Herkimer formation, a limestone-type layer in central New York. Norse seems to indicate they may restart Herkimer drilling at some point. From the Norse press release:

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Norse Energy in Trouble, Wants Bondholders to Become Stockholders

Not long ago, MDN wrote about Norse Energy’s layoff of half of its employees since the beginning of 2011 (see MDN story here). One of MDN’s readers (“BinFranklin”) left a comment stating that “Norse Energy is a company on life support.” It seems it was a perceptive comment. He also said Norse has been selling off assets to keep going—again, accurate.

A new press release issued from the company today talks about Norse’s ongoing efforts to convert some of it’s debt into equity (convert bonds into stocks, handing over bits and pieces of ownership) because they will soon not be able to pay bond holders the payments due on the money they’ve borrowed. The press release, reprinted below in its entirety, basically says, “We’re still working on it but we haven’t done a deal yet.”

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Norse Energy “Reduces” Employees by 50 Percent

You are firedEarly today, Norse Energy, a Norwegian company with gas drilling operations in New York State, issued an interesting press release about laying off half of their employees (see the full release below). Norse holds some 180,000 net acres of natural gas leases in New York, of which 130,000 are in the Marcellus and Utica Shale zones.

Until recently, Norse was using conventional vertical methods of drilling for natural gas in Upstate New York counties like Chenango and Madison. But Norse announced in early August that they are “betting the farm” that New York will adopt new regulations to allow shale gas drilling, and so they have focused the company on that prize. So much so they have filed the very first permits to drill in the Utica Shale in New York and have ceased all other kinds of gas drilling until it happens (see this MDN story).

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Norse Energy Bets Big on New York’s Utica & Marcellus Shale

Norse Energy, an Oslo (Norway)-based gas drilling company has just announced they are “betting the farm” on drilling in New York State’s Marcellus and Utica Shales. They’ve even decided to suspend other types of gas drilling favor of New York’s shale gas. Recently, Norse became the first company to file a permit with the state DEC to drill in the Utica Shale once permits start to be issued (see this MDN story).

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Norse Energy Eyes the Utica Shale in New York, Says the Utica May Outperform the Marcellus in Much of NY

Norse Energy Corp, a drilling company headquartered in Norway but with local operations and 180,000 net acres of leases in New York State, filed the state’s first application to drill in the Utica Shale last week. Norse believes that the Utica Shale for New York will be what the Marcellus Shale is for Pennsylvania. Why? It all has to do with depth:

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Norse Energy Optimistic that Drilling in New York State Will Soon Begin After Meeting with DEC Sec. Martens

Norwegian driller Norse Energy Corp. recently meet with New York State Department of Environmental Conservation (DEC) Commissioner Joe Martens, and they were encouraged by the meeting, saying that Martens asserted his confidence in the DEC to complete plans to release its Supplemental Generic Environmental Impact Statement on horizontal hydraulic fracturing in the Marcellus Shale this summer.

Norse Energy has good reason to care what happens in New York—they have a significant land position of 180,000 net acres in the state. Norse Energy also owns a natural gas marketing business and operates pipeline systems in New York and Pennsylvania for gathering and transmission of natural gas.

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