NORTH SEA ENERGY CORPORATE UPDATE

2017-06-28 11:53 ET - News Release

Mr. Ian Lambert reports
North Sea Energy Inc. has provided a corporate update of the current status of activities for the company pertaining to its 20-per-cent interest in the Bagpuss and Blofeld prospects located in blocks 13/24c and 13/25 of the United Kingdom continental shelf, held through its wholly owned subsidiary, North Sea Energy (U.K. No. 2) Ltd. (NSE2).

Bagpuss and Blofeld prospects
During 2016, the 13/25-1 Bagpuss well was spudded on July 18, 2016, shortly after the Ocean Valiant offshore drilling rig arrived on site at the Bagpuss prospect. On Aug. 5, 2016, North Sea Energy announced that the well, which was targeting the Bagpuss prospect on the Halibut Horst in the Outer Moray Firth, reached a total depth of 1,532 feet in granite basement. The well was drilled approximately two kilometres from the 1981 Amoco well in the same structure.

The well encountered 41 feet of hydrocarbon-bearing sands within a 68-foot hydrocarbon column. This was in line with predrill estimates. The sands have porosity of between 25 per cent and 33 per cent, and initial indications were that the oil is heavy, which was expected. The well, always planned to be an informational well only, was plugged and abandoned in accordance to the drilling plan. For further information on the Bagpuss and Blofeld prospects in the company's independent prospective resource assessment, please refer to the press release dated June 27, 2013, posted on SEDAR.

In early 2017, the United Kingdom Oil and Gas Association (OGA) approved the renewal of the Bagpuss/Blofeld licence P.1943 into the second four-year term. Reach Halibut Ltd. has been approved by the OGA as operator. Following reassignment of Maersk's 25-per-cent working interest in the Bagpuss on a pro rata basis, NSE2's working interest in Bagpuss increased from 15 per cent to 20 per cent. The working interests in the Bagpuss joint venture going forward are as follows: Encounter -- 17.67 per cent, Groliffe -- 8.83 per cent, NSE2 -- 20 per cent and Reach Halibut -- 53.5 per cent (total -- 100 per cent).

Gemini negotiations
The company and Gemini have intensified their discussions to reach a settlement agreement pertaining to the current $8,452,935 outstanding amount as a result of an arbitration decision.
The company wishes to confirm that management is unaware of any other material changes in the company's operations that would account for the recent increase in market activity.

About North Sea Energy Inc.
North Sea Energy holds two high-impact opportunities in the United Kingdom North Sea. These opportunities are the Bagpuss and Blofeld prospects located in blocks 13/24c and 13/25 of the United Kingdom continental shelf.
We seek Safe Harbor.