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Finalisation of the Purchase of Interests in the Norwegian Production Licences Covering the Yme Field
Report no. 67/20082008-12-30

Further to Current Report No. 54/2008  of October 23rd 2008, the Management Board of Grupa LOTOS S.A. reports that upon the fulfilment of all the conditions precedent, on December 30th 2008 LOTOS Exploration and Production  Norge AS acquired all the rights and obligations connected with the ownership of 10% of interests in the North Sea production licences No. 316, 316B, 316CS and 316DS.
The licences, purchased from Det Norske Oljeselskap ASA, cover the YME field, which is located 110 km off the coast in the southern part of the Norwegian sector of the North Sea, and an additional exploration area. Production from the field is expected to start in the second half of 2009.

The value of the transaction was NOK 390m (i.e. PLN 163,917 thousand translated at the NOK/PLN mid exchange rate published by the National Bank of Poland for December 30th 2008). The acquisition of rights to tax exemptions held by the seller in connection with the investments made, accounted for about 30% of the price. In addition, the price was increased by the amount of capital expenditure (corresponding to the 10% interest in the YME field) incurred by Det Norske Oljeselskap ASA from January 2008 to December 30th 2008, of about NOK 180m (the equivalent of PLN 75,654 thousand, translated at the NOK/PLN mid exchange rate published by the National Bank of Poland for December 30th 2008). Other capital expenditure (in the amount corresponding to the 10% interest in the YME field) to be incurred before production from the field can be started are estimated at USD 50m (the equivalent of PLN 146,465 thousand,  translated at the USD/PLN mid exchange rate published by the National Bank of Poland for the transaction date, i.e. December 30th 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 came 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).

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