Brazil transaction closed
(Aug. 16, 2006) The transaction with respect to Hydro's acquistion of a 50 percent interest in the Block BM-C-7 Concession in Brazil is now closed.
Last November, Hydro entered into an agreement with Canadian EnCana Corporation to purchase all of the shares of an EnCana subsidiary holding a 50 percent interest in the BM-C-7 Concession offshore Brazil, containing the promising Chinook field.
This transaction was approved by the relevant Brazilian authorities and is now closed. A subsidiary of the former Kerr-McGee Corporation, which was recently acquired by Anadarko Petroleum Corporation, is the holder of the other 50 percent interest in the BM-C-7 Concession.
Hydro is the operator in the concept development phase of the Chinook field, and Hydro expects that its experience in other heavy oil fields will contribute to additional value.
The field is located 75 kilometers offshore Brazil in about 100 meters of water. In place resources are estimated to be two billion barrels of heavy oil. Recoverable reserves are 250-450 million barrels of oil.
Hydro and KerrMcGee have significant complementary skills and an integrated project team has been formed. A development plan is now being prepared.
Cautionary note: The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation material, such as expected recoverable resources, that the SEC’s guidelines strictly prohibit us from including in filings with the SEC. Investors are urged to consider closely the disclosure in our Form 20-F, SEC File No. 1-9159, available from us at our Corporate Headquarter: Norsk Hydro, N-0240 Oslo, Norway. You can also obtain this form from the SEC by calling 1-800-SEC-0330.
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