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Purchase of Interests in Norwegian Production Licences Covering the Yme Field
Report no. 54/20082008-10-23

The Management Board of Grupa LOTOS S.A. reports that on October 22nd 2008, LOTOS Exploration and Production Norge AS (a member of the LOTOS Group) signed an agreement with Norwegian company Det norske oljeselskap ASA concerning purchase of 10% of interests in the North Sea production licences No. 316, 316B, 316CS and 316DS.

The purchased licences cover the Yme Field, which is located 110 km off the coast in the southern part of the Norwegian sector of the North Sea. Production from the field is expected to start in the second half of 2009.

The consideration is NOK 390m (i.e. PLN 161m, translated at the NOK/PLN mid exchange rate published by the National Bank of Poland for October 22nd 2008).

The acquisition of rights to tax exemptions held by the seller in connection with the investments made, accounts for about 30% of the price. The Seller will be compensated for capital investment (corresponding to the 10% interest in the Yme Field) made between January 2008 and completion date, which is expected to be appr 180 mln NOK (i.e. PLN 74m, translated at the NOK/PLN mid exchange rate published by the National Bank of Poland for October 22nd 2008). Remaining investment (corresponding to the 10% interest in the Yme Field) before start of production is expected to be appr. 50 mln USD (i.e. PLN 144m, translated at the USD/PLN mid exchange rate published by the National Bank of Poland for October 22nd 2008).

The transaction is the second transaction of purchase of interests in the Yme Field by LOTOS Exploration and Production Norge AS this year (current reports No. 23/2008 and 48/2008). As a result of finalisation of the two transactions carried out this year, LOTOS Exploration and Production Norge AS will come to hold in total 20% of the interests in the Yme Field, which corresponds to recoverable crude oil reserves (as estimated by the operator – Talisman) of 13.6 million barrels (approx. 1,800 thousand tonnes).

The completion of the agreement will take effect after its approval from Norwegian Ministry of Energy and Oil and the Ministry of Finance.

Basis for publication of this report: Art. 56.1.1 of the Act on Public Offering – inside information.