Gina Krog Transaction Update

PR63756

LONDON, Mar. 14, 2016/PRNewswire=KYODO JBN/ --

    Sequa Petroleum N.V. (the "Company") is pleased to announce an update to

its planned acquisition of a 15% interest in Gina Krog. This acquisition was

announced on 19 October 2015.  Since then, the Gina Krog acquisition has

received all necessary government approvals, and the Company's 100% subsidiary

Tellus Petroleum A.S. ("Tellus") has been approved as a new Norwegian

Continental Shelf's ("NCS") licence holder.

    Gina Krog is one of the NCS largest current developments. The development,

operated by Statoil, is currently within budget and on schedule for first

production in Q2 2017. In light of the current industry environment, cost

reductions and schedule improvements of the Gina Krog project are currently

being pursued.

    The 2P reserves are estimated at approximately 260 million barrels of oil

equivalent ("boe"), of which 39 million boe are net to the Company[1]. OPEX and

CAPEX costs are both estimated at approximately USD 15 per boe. These estimates

are calculated over the field life, from the effective date of 1 January 2015

(being the effective date of the Company's acquisition), representing a low

marginal cost[1].

    The Gina Krog field has further resource potential beyond its 2P reserves.

There is potential, through development optimisation, for prolongation of the

first production plateau, as well as from several appraisal segments which were

not included in the initial PDO. One of these segments, the East 3 segment, has

already been successfully drilled in 2015. In addition, there is further

resource potential from exploration. Historically, most large fields on the NCS

have significantly outperformed their initial PDO submissions.

    The transaction terms for the acquisition of Gina Krog, announced on 19

October 2015, are at an attractive discount to comparable transactions in

Norway. These terms result in all-in costs until first production of

approximately USD 9 per boe of 2P reserves. The seller will retain the tax

balances related to the Gina Krog investments prior to the effective date.

    The Company believes that Norway provides the world's most secure and

stable operating environment for oil and gas. Norway boasts a strong AAA rated

sovereign government that actively encourages and incentivises the industry,

and is isolated from geopolitical crises. The Norwegian petroleum tax

environment provides unparalleled downside protection, by giving companies the

potential to recover up to 94% of their development costs.

    The Company is planning to finance the Gina Krog transaction with a

combination of equity raised by the Company and of debt raised by both the

Company and Tellus, which will be the subject of a future announcement.  The

Company expects to complete the Gina Krog transaction in April 2016.

    Company Update

    The Company's strategy is to create value in a cyclical industry by means

of asset acquisition, optimisation and monetisation, applying both technical

and financial excellence. The strategic focus is on assets with proven

resources, current and near term production, and value upsides, pursuing a

balanced asset portfolio in select areas with low marginal cost, exploiting

growth potential and synergies. The current global over-supply of oil and the

resulting environment of temporarily depressed prices are fuelling liquidity

distress and capex cuts across the industry, providing an unprecedented

opportunity to acquire high quality assets at very attractive valuations.

    The acquisition of a 15% interest in Gina Krog is a major step in this

strategy. The Company will be looking to add assets to its NCS portfolio by

leveraging its position as an approved player on the NCS with the experienced

and well-connected Tellus management team. This strategy will include

considering further areas where the balance of political, fiscal and commercial

stability and geological prospectivity allows for stable high

returns and growth.

    About the Company

    The Company is an oil and gas company registered in the Netherlands, with

its principal office in London and listed on Euronext Marche Libre. In 2014,

the Company established an operating presence in Kazakhstan, acquiring 75% of

the Aksai licence which has subsequently been drilled and is currently being

evaluated. In 2015, the Company established a presence in Norway, acquiring

Tellus Petroleum Invest AS as a 100% subsidiary. Tellus Petroleum AS, a wholly

owned subsidiary of Tellus Petroleum Invest AS, has subsequently entered into a

sale and purchase agreement with Total to purchase a 15% interest in the Gina

Krog field and with OMV to acquire approximately 0.6% of the Ivar Aasen field.

    --------------------------------------------------

    1. Rystad Energy; WoodMackenzie; Gina Krog Environmental Impact Assessment

report; Statoil publications; Company estimates; independent evaluation by AGR

Petroleum Services AS.

    An updated corporate presentation is available on the Company's  website at

http://www.sequa-petroleum.com/corporate.

    For more information please visit http://www.sequa-petroleum.com or

contact:

    Jacob Broekhuijsen, Chief Executive Officer, +44(0)203-728-4450,

info@sequa-petroleum.com

    SOURCE: Sequa Petroleum N.V.