prospectus det norske oljeselskap asa · prospectus. det norske oljeselskap asa (a public limited...

PROSPECTUS

DET NORSKE OLJESELSKAP ASA (a public limited liability company incorporated under the laws of Norway)

_______

Rights Issue of 61,911,239 Shares

Subscription Price of NOK 48.50 per Offer Share with Subscription Rights for Existing Shareholders

______

The information contained in this prospectus (the “Prospectus”) relates to a rights issue (Nw. fortrinnsrettsemisjon) (the

“Rights Issue”) by Det norske oljeselskap ASA (the “Company”) and listing on Oslo Børs (the “Oslo Stock Exchange”) of

61,911,239 new shares in the Company (the “Offer Shares”), each with a nominal value of NOK 1.00, and with a

subscription price of NOK 48.50 per Offer Share (the “Subscription Price”). Holders of the Company’s shares (the

“Existing Shareholders” and the “Shares” respectively) in the Company’s shareholder register with the Norwegian

Central Securities Depositary (Nw. Verdipapirsentralen) (the “VPS”) as of the expiry of 14 July 2014 (the “Record Date”),

will be granted transferable subscription rights (the “Subscription Rights”) that, subject to applicable law, provide

preferential rights to subscribe for and be allocated Offer Shares in the Rights Issue at the Subscription Price. For the

purposes of determining eligibility for Subscription Rights, the Company will look solely to its register of shareholders as

of the expiry of the Record Date. Provided that the delivery of traded Shares are made with ordinary T+3 settlement in

the VPS, Shares that are acquired on or before 9 July 2014 (the “Cut-off Date”) will give the right to receive Subscription

Rights, whereas Shares that are acquired from and including 10 July 2014 will not give the right to receive Subscription

Rights. Subscription Rights will not be issued in respect of existing Shares held in treasury by the Company. The

Company’s existing Shares are listed on the Oslo Stock Exchange under the ticker code “DETNOR”. __________

Number of Offer Shares ....................................................... 61,911,239 Offer Shares.

Subscription Price .............................................................. NOK 48.50 per Offer Share.

Subscription Period ............................................................. From 09:00 hours (CET) on 15 July 2014 to 16:30 hours (CET) on

29 July 2014

Trading in Subscription Rights ................................................ From 09:00 hours (CET) on 15 July 2014 to 16:30 hours (CET) on 24

July 2014

__________

Each Existing Shareholder will be granted 11 Subscription Rights for every 25 Shares registered as held by such Existing

Shareholder as of the expiry of the Record Date. Each Subscription Right will give the right to subscribe for and be

allocated one Offer Share. Over-subscription and subscription without Subscription Rights will be permitted. The

subscription period commences on 09:00 hours (CET) on 15 July 2014 and expires at 16:30 hours (CET) on 29 July 2014

(the “Subscription Period”). The Subscription Rights will be listed and tradable on the Oslo Stock Exchange under the

ticker code “DETNOR T” from 09:00 hours (CET) 15 July 2014 to 16:30 hours (CET) on 24 July 2014. __________

Subscription Rights that are not used to subscribe for Offer Shares before the expiry of the Subscription Period or

that are not sold before 16:30 hours (CET) on 24 July 2014, will have no value and will lapse without compensation

to the holder.

__________

Aker Capital AS has committed to subscribe for the number of Offer Shares covered by its Subscription Rights. Following

expiry of the Subscription Period, any Offer Shares that have not been subscribed for and allocated in the Rights Issue

(save for the Offer Shares to be subscribed for by Aker Capital AS) will be subscribed and paid for at the Subscription

Price by BNP PARIBAS, DNB Markets, a part of DNB Bank ASA (“DNB Markets”), J.P. Morgan Securities plc. and Nordea

Markets, a part of Nordea Bank Norge ASA (“Nordea Markets”) (together the “Underwriters”), subject to the terms and

conditions of the underwriting agreement between the Company and the Underwriters dated 1 June 2014, as amended

(the “Underwriting Agreement”). __________

For the definitions of capitalised terms used throughout this Prospectus, see Section 24 “Definitions”. __________

Investing in the Shares, including the Offer Shares, and trading in the Subscription Rights, involve a high degree of

risk, see Section 2 “Risk Factors”.

__________

Joint Global Coordinators and Joint Bookrunners:

BNP PARIBAS DNB Markets J.P. Morgan Securities plc.

Nordea Markets Skandinaviska Enskilda Banken

The date of this Prospectus is 9 July 2014.

http://www.detnor.no/

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IMPORTANT INFORMATION

This Prospectus has been prepared in order to provide information about the Company and its business in relation to the

Rights Issue and listing of the Offer Shares and to comply with the Norwegian Securities Trading Act of 29 June 2007 no.

75 (the “Norwegian Securities Trading Act”) and related secondary legislation, including the Commission Regulation (EC)

no. 809/2004 implementing Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003

regarding information contained in prospectuses (the “Prospectus Directive”) as well as the format, incorporation by

reference and publication of such prospectuses and dissemination of advertisements (hereafter “EC Regulation

809/2004”). This Prospectus has been prepared solely in the English language. The Financial Supervisory Authority of

Norway (Nw. Finanstilsynet) (the “Norwegian FSA”) has reviewed and approved this Prospectus in accordance with

Sections 7-7 and 7-8 of the Norwegian Securities Trading Act. The Norwegian FSA has not verified or approved the

accuracy or completeness of the information included in this Prospectus. The approval by the Norwegian FSA only relates

to the information included in accordance with pre-defined disclosure requirements. The Norwegian FSA has not made

any form of verification or approval relating to corporate matters described in or referred to in this Prospectus.

_________

The information contained herein is current as of the date hereof and subject to change, completion and amendment

without notice. In accordance with Section 7-15 of the Norwegian Securities Trading Act, significant new factors, material

mistakes or inaccuracies relating to the information included in this Prospectus, which are capable of affecting the

assessment of the Offer Shares between the time when this Prospectus is approved and the date of listing of the Offer

Shares on the Oslo Stock Exchange, will be included in a supplement to this Prospectus. Neither the publication nor

distribution of this Prospectus, nor any sale of Offer Shares made hereunder, shall under any circumstances create any

implication that there has been no change in the Company’s affairs or that the information herein is correct as of any

date subsequent to the date of this Prospectus.

_________

The Company has furnished the information in this Prospectus. BNP PARIBAS, DNB Markets, J.P. Morgan Securities plc.,

Nordea Markets and Skandinaviska Enskilda Banken (together the “Joint Global Coordinators” and/or “Joint

Bookrunners”) make no representation or warranty, expressed or implied, as to the accuracy or completeness of such

information, and nothing contained in this Prospectus is, nor shall be relied upon as, a promise or representation by the

Joint Global Coordinators and the Joint Bookrunners. No person is authorised to give any information or to make any

representation in connection with the Rights Issue other than as contained in this Prospectus. If any such information is

given or made, it must not be relied upon as having been authorised by the Company or any of the Joint Bookrunners or

by any of the affiliates, advisors or selling agents of any of the foregoing.

_________

In making an investment decision, each investor must rely on his or her own examination, and analysis of, and enquiry

into the Company and the terms of the Rights Issue, including the merits and risks involved. None of the Company or the

Joint Bookrunners, nor any of their respective representatives or advisers, is making any representation to any offeree,

subscriber or purchaser of the Offer Shares regarding the legality of an investment in the Offer Shares by such offeree,

subscriber or purchaser under the laws applicable to such offeree, subscriber or purchaser. Each investor should consult

with his or her own advisors as to the legal, tax, business, financial and other aspects of a subscription or purchase of the

Offer Shares.

_________

The distribution of this Prospectus and the offering and subscription of the Offer Shares and offering or exercise of

Subscription Rights in certain jurisdictions may be restricted by law. This Prospectus does not constitute an offer of, or an

invitation to purchase, any of the Offer Shares (pursuant to the exercise of the Subscription Rights or otherwise) or

Subscription Rights in any jurisdiction in which such offer or invitation to purchase would be unlawful. No one has taken

any action that would permit a public offering of the Offer Shares or Subscription Rights to occur outside of Norway.

Accordingly, neither this Prospectus nor any advertisement or any other offering material may be distributed or published

in any jurisdiction except under circumstances that will result in compliance with any applicable laws and regulations.

The Company and the Joint Bookrunners require persons in possession of this Prospectus to inform themselves about and

to observe any such restrictions.

_________

The Offer Shares and the Subscription Rights are subject to restrictions on transferability and resale and may not be

transferred or resold except as permitted under applicable securities laws and regulations. Any failure to comply with

these restrictions may constitute a violation of the securities laws of any such jurisdiction. Investors should be aware that

they may be required to bear the financial risks of an investment in the Offer Shares for an indefinite period of time. For

further information on the manner of distribution of the Offer Shares and the Subscription Rights and the selling and

transfer restrictions to which they are subject, see Section 21 “Selling and Transfer Restrictions”.

_________

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This Prospectus and the terms and conditions of the Rights Issue as set out herein shall be governed by and construed in

accordance with Norwegian law. The courts of Norway, with Oslo as legal venue, shall have exclusive jurisdiction to settle

any dispute which may arise out of or in connection with the Rights Issue or this Prospectus.

_________

The Offer Shares are being offered only in those jurisdictions in which, and only to those persons to whom, offers and

sales of the Offer Shares (pursuant to the exercise of the Subscription Rights or otherwise) may lawfully be made. The

Subscription Rights and the Offer Shares have not been, and will not be, registered under the United States Securities Act

of 1933, as amended (the “U.S. Securities Act”), or with any securities regulatory authority of any state or other

jurisdiction of the United States and may not be offered, sold, exercised, pledged, resold, granted, delivered, allocated,

taken up, transferred or delivered, directly or indirectly, except pursuant to an exemption from, or in a transaction not

subject to, the registration requirements of the U.S. Securities Act and in compliance with any applicable securities law

of any state or other jurisdiction of the United States. Pursuant to this Prospectus, the Offer Shares are being offered and

sold outside the United States in reliance on, Regulation S under the U.S. Securities Act (“Regulation S”) and inside the

United States only to persons reasonably believed to be “qualified institutional buyers” (“QIBs”) (as defined in Rule 144A

under the U.S. Securities Act) pursuant to an exemption from the registration requirements of the U.S. Securities Act who

have executed and returned an investor letter in a form acceptable to the Company and the Joint Bookrunners to the

Company prior to exercising Subscription Rights to acquire Offer Shares. The Rights Issue will not be made to persons who

are residents of Australia, Canada, Japan, Hong Kong or in any jurisdiction in which such offering would be unlawful. For

more information regarding restrictions in relation to the Rights Issue pursuant to this Prospectus, see Section 21 “Selling

and Transfer Restrictions”.

Nordea is not a registered broker-dealer in the United States and Nordea’s activities in connection with the offering will

in any event be limited solely outside the United States.

Neither the Subscription Rights nor the Offer Shares have been approved or disapproved by the United States Securities

and Exchange Commission, any state securities commission in the United States or any other United States regulatory

authority, nor have any of the foregoing authorities passed upon or endorsed the accuracy or adequacy of this Prospectus.

Any representation to the contrary is a criminal offense in the United States.

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CONTENTS

Clause Page

1. SUMMARY ................................................................................................................. 4 2. RISK FACTORS .......................................................................................................... 19 3. RESPONSIBILITY STATEMENT ......................................................................................... 33 4. GENERAL INFORMATION .............................................................................................. 34 5. USE OF PROCEEDS; REASONS FOR THE RIGHTS ISSUE ............................................................ 36 6. BUSINESS OVERVIEW .................................................................................................. 37 7. THE TRANSACTION .................................................................................................... 61 8. PRESENTATION OF MARATHON NORWAY ........................................................................... 63 9. THE COMPANY FOLLOWING COMPLETION OF THE TRANSACTION ............................................... 75 10. INDUSTRY OVERVIEW ................................................................................................. 79 11. CAPITALISATION AND INDEBTEDNESS ............................................................................... 93 12. SELECTED FINANCIAL INFORMATION ................................................................................ 94 13. OPERATING AND FINANCIAL REVIEW ............................................................................... 108 14. MAJOR SHAREHOLDERS .............................................................................................. 118 15. THE BOARD OF DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES .......................................... 119 16. RELATED PARTY TRANSACTIONS ................................................................................... 136 17. DIVIDEND AND DIVIDEND POLICY ................................................................................... 137 18. CORPORATE INFORMATION; SHARES AND SHARE CAPITAL ...................................................... 139 19. SECURITIES TRADING IN NORWAY .................................................................................. 145 20. TERMS OF THE RIGHTS ISSUE ....................................................................................... 149 21. SELLING AND TRANSFER RESTRICTIONS ........................................................................... 159 22. NORWEGIAN TAXATION .............................................................................................. 165 23. INCORPORATION BY REFERENCE; DOCUMENTS ON DISPLAY .................................................... 168 24. ADDITIONAL INFORMATION .......................................................................................... 170 25. DEFINITIONS........................................................................................................... 171

APPENDIX A—ARTICLES OF ASSOCIATION .................................................................................. A1

APPENDIX B—ASSURANCE REPORT ON PRO FORMA FINANCIAL INFORMATION ........................................ B1

APPENDIX C—ANNUAL ACCOUNTS 2013 OF MARATHON OIL NORGE AS ................................................ C1

APPENDIX D—SUBSCRIPTION FORM ......................................................................................... D1

APPENDIX E— FIRST QUARTER 2014 INTERIM FINANCIAL INFORMATION AND ACCOMPANYING INDEPENDENT

AUDITOR'S REVIEW REPORT .............................................................................................

E1

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1. SUMMARY

Summaries are made up of disclosure requirements known as “Elements”. These Elements are numbered in Sections A– E

(A.1 – E.7) below. This summary contains all the Elements required to be included in a summary for this type of

securities and the Company. Because some Elements are not required to be addressed, there may be gaps in the

numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because

of the type of securities and Company, it is possible that no relevant information can be given regarding the relevant

Element. In this case a short description of the Element is included in the summary with the mention of "not applicable".

Element A—Introduction and Warnings

A.1 Warning ........................................................ This summary should be read as an introduction to the Prospectus. Any

decision to invest in the securities should be based on consideration of

the Prospectus as a whole by the investor. Where a claim relating to

the information contained in the Prospectus is brought before a court,

the plaintiff investor might, under the national legislation of the

Member States, have to bear the costs of translating the Prospectus

before the legal proceedings are initiated. Civil liability attaches only

to those persons who have tabled the summary including any

translation thereof, but only if the summary is misleading, inaccurate

or inconsistent when read together with the other parts of the

Prospectus or it does not provide, when read together with the other

parts of the Prospectus, key information in order to aid investors when

considering whether to invest in such securities.

Element B—Company

B.1 Legal and Commercial Name ............................... Det norske oljeselskap ASA.

B.2 Domicile and Legal Form, Legislation

and Country of Incorporation ............................

The Company was incorporated under Norwegian law on 2 May 2006, as

a public limited liability company under the Norwegian Private Limited

Liability Companies Act.

B.3 Current Operations, Principal Activities

and Markets .................................................

The Company is an oil and gas company with exploration and

production activities on the Norwegian Continental Shelf. Prior to

completion of the Transaction, the Company is primarily an offshore

exploration and development company with a total of 77 licenses (27 as

operator) as per 31 March 2014.

The Company has steadily developed a competent and experienced

organisation that has been scaled up over the last years, mainly due to

the Ivar Aasen development project where the Company is operator.

The Company’s Senior Management comprises of highly experienced

people with extensive experience from the oil and gas industry.

Previous management employment includes well-known companies like

Statoil, Aker, Saga, Hydro and ConocoPhillips. The organisation is based

in three office locations, namely Trondheim, Oslo and Harstad.

In total, the Company has a working interest in eight fields containing

oil and gas reserves. Out of these, four are classified as in production

and four are classified as approved for development. The Company’s

total net proven reserves (P90/1P) as of 31 December 2013 is estimated

at 48.5 million barrels of oil equivalents. Total net proven plus

probable reserves (P50/2P) are estimated at 65.8 million barrels of oil

equivalents. The Company has acquired its current resource base

through exploration, and aims to continue to explore on the Norwegian

Continental Shelf in the future.

B.4 Significant Recent Trends ................................... Energy Overview

The dynamics of energy markets are determined more and more by the

emerging economies. The International Energy Agency’s World Energy

Outlook 2013 report, global energy demand will increase by one-third

from 2011 to 2035 in the New Policies Scenario. The report further

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predicts that emerging economies will account for more than 90% of

global net energy demand growth. While Asian energy demand growth

is led by China this decade, it shifts towards India and, to a less extent,

Southeast Asia after 2025. The Middle East emerges as a major energy

consumer, with its gas demand growing by more than the entire

Economic Co-operation and Development. The Middle East is the

second-largest gas consumer by 2020 and third-largest oil consumer by

2030, redefining its role in global energy markets. Non-OPEC supply

plays the major role in meeting net oil demand growth this decade, but

OPEC plays a far greater role after 2020. The United States is the

world’s largest oil producer from 2015 to early 2030s; light tight oil and

efficiency policies are expected to rapidly reduce its reliance on

imports. Brazil becomes a major oil exporter, delivering one-third of

global supply growth to 2035. China is about to become the largest oil

importer and becomes the largest oil consumer around 2030. The

European Union stays the largest gas importer, but demand returns to

2010 levels only as 2035 approaches.

Energy Demand

Fossil fuels remain the dominant sources of primary energy worldwide

in BP’s Energy Outlook, accounting for 81% of the overall energy

consumption in 2035, a decrease from approximately 86% in 2012.

According to IEA, oil is expected to be the slowest growing fuel over

the outlook period (13% growth), while renewables is has the most

rapidly growth (77%).

Energy Supply

According to BP’s Energy Outlook, world primary energy production

grows at 1.5% p.a. from 2012 to 2035, matching consumption growth.

Growth is concentrated in the non-OECD, which accounts for almost

80% of the volume increment. There is growth in all regions except

Europe. Asia Pacific shows both the fastest rate of growth (2.1% p.a.)

and the largest increment, providing 47% of the increase in global

energy production. The Middle East and North America are the next

largest sources of growth, and North America remains the second

largest regional producer. There is expansion across all types of energy,

with new energy forms playing an increasingly significant role.

Renewables, shale gas, tight oil and other new fuels sources will in

aggregate grow at 6.2% p.a. and contribute 43% of the increment in

energy production to 2035. The new growth of new energy forms is

enabled by the development of technology and underpinned by large-

scale investments. BP’s Outlook assumes that the right competitive and

policy conditions are in place to support that investment and technical

progress.

The Oil Price

As of June 4, 2014 the oil price was USD 108.4 per barrel (Brent Crude

Oil), approximately 13% above the average price of USD 95.9 per barrel

over the last five years and 33% above the average price of 81.6 the

last ten years. All-time high came back in July 2008 with a price of USD

146.1 per barrel. Strong demand for energy combined with limited

supply, OPEC’s successful oil market strategy plus supply disruption in

key regions like Russia, the Middle East and West Africa, and the risk of

gas crisis in North America were the main reasons behind the record-

high prices in 2008. For the time being, key drivers in the market are

growth in US shale oil production, lower Libyan production than

expected and differing views on future Chinese oil demand.

E&P Spending

According to DNB Markets Equity Research’s E&P spending analysis in

the Deepwater development on HOLD report from March 2014 ,

offshore E&P spending has increased by 18% compound annual growth

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rate (CAGR) in the period from 2010 to 2013. This led to increased

capacity utilisation in most oil services segments from seismic services,

drilling, supply vessel services, subsea services and demand for deep-

water equipment and services. In many segments, like for drilling rigs,

the market has experienced record high day rates and utilisation levels,

resulting in increased upgrading and newbuilding activity. In the report,

DNB Markets estimates a 4% growth in global E&P spending for 2014 and

a moderate 1% growth for offshore E&P spending.

Production on the Norwegian Continental Shelf

As of year-end 2013, the Norwegian Petroleum Directorate estimates in

its annual resource accounts, that the total recoverable resources on

the Norwegian Continental Shelf are approximately 89.1 billion boe.

Out of this, approximately 38.9 billion boe is produced.

The oil production from existing fields on the Norwegian Continental

Shelf has peaked and is declining. Oil production in 2013 was 84.9

million Sm3 (1.5 million bbls per day), compared with 89.2 million Sm3

(1.5 billion bbls per day) in the previous year. 78 fields contributed to

the total oil production in 2013, in addition to test production from one

discovery.

Continued investments in the drilling of new development wells and

other measures to improve recovery are important for the oil

production on the Norwegian Continental Shelf. In 2013, 108.7 billion

Sm3 gas was sold. This represents a reduction of 5.8 billion Sm3

compared with 2012 (five per cent). The NPD expects gas output from

existing fields to increase somewhat during the next five years.

In 2013, 17.7 million Sm3 (0.3 million boepd) NGL and 4.0 million Sm3

(0.1 million boepd) condensate was produced on the Norwegian

Continental Shelf.

In order to increase the production and tap the resource potential on

the Norwegian Continental Shelf, the oil industry has to increase its

exploration efforts. The number of wildcats (oil wells in an unexplored

area) and appraisal wells being drilled on the Norwegian Continental

Shelf were historically low until 2005, but started to increase

thereafter, due to the Norwegian government’s ambition to increase

drilling on the Norwegian Continental Shelf. The number of spudded

exploration wells reached a record high of 65 wells in 2009. In 2013, 45

wildcats and 14 appraisal wells were commenced. NPD forecasts 52

exploration wells in 2014.

B.5 Description of the Company ................................ The Company is a public limited liability company owning all of the

outstanding shares in Sandvika Fjellstue AS, which is the Company’s

only subsidiary.

B.6 Interests in the Company and Voting

Rights.........................................................

Shareholders owning 5% or more of the Shares have an interest in the

Company's share capital which is notifiable pursuant to the Norwegian

Securities Trading Act.

Each of the Company’s Shares one vote.

As recorded in the shareholders’ register of the Company with the VPS

8 July 2014 (the latest practical date prior to the date of this

Prospectus), and in so far as is known to the Issuer, the following

persons are, directly or indirectly, interested in 5% or more of the share

capital of the Company (which constitute a notifiable holding under the

Norwegian Securities Trading Act):

Number of Shares % Holding

Aker Capital AS .............................................................................................. 70,339,610 49.99%

Folketrygdfondet ............................................................................................ 8,195,409 5.82%

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B.7 Selected Historical Key Financial

Information .................................................

The following selected unaudited financial information included in the

tables below has been extracted or derived from the Company’s

unaudited financial statements for the first three months ended 31

March 2014 (restated) and 2013, and from the Company's audited

financial statements for the years ended 31 December 2013, 2012 and

2011 (together the Historical Financial Information). The Company's

annual financial statements have been prepared in accordance with

IFRS, as adopted by the EU (IFRS). The selected financial information

set out below is a summary only.

The table below sets out a summary of the Company's unaudited income statement information for the first three months

ended 31 March 2014 (restated) and 2013, and the Company's audited income statement information for the years ended

31 December 2013, 2012 and 2011.

NOK thousands

Three Months Ended

31 March

Year Ended

31 December

2014 2013 2013 2012 2011

Results (unaudited) (unaudited)

Petroleum revenues ............................................................ 155,101 78,709 933,162 325,093 361,774

Other operating revenues ..................................................... 3,241 1,630 10,719 7,351 75,768

Total operating revenues ...................................................... 158,342 80,339 943,881 332,444 437,542

Exploration expenses .......................................................... 109,582 233,738 1,637,063 1,609,314 1,012,191

Production costs ................................................................ 42,949 41,512 249,619 210,962 181,888

Payroll and payroll-related expenses ........................................ 4,559 1,527 38,025 11,000 31,732

Depreciations ................................................................... 88,863 34,997 470,529 111,687 78,518

Impairments ..................................................................... 167,373 — 666,135 2,149,653 150,990

Other operating expenses ..................................................... 13,305 19,208 109,886 82,799 60,721

Total operating expenses ...................................................... 426,631 330,983 3,171,256 4,175,415 1,516,040

Operating profit/loss .......................................................... (268,289) (250,644) (2,227,375) (3,842,971) (1,078,498)

Interest income ................................................................. 12,145 7,202 40,750 54,997 69,900

Other financial income ........................................................ 34,663 20,602 80,567 68,399 26,825

Interest expenses ............................................................... 86,753 12,748 301,834 128,250 305,969

Other financial expenses ...................................................... 20,530 47,153 137,435 101,050 23,111

Net financial items ............................................................. (60,475) (32,097) (317,952) (105,904) (232,355)

Profit/loss before taxes ....................................................... (328,764) (282,741) (2,545,327) (3,948,875) (1,310,853)

Taxes (+)/tax income .......................................................... (312,981) (262,415) (1,996,727) (2,991,624) (940,594)

Net profit/loss .................................................................. (15,783) (20,326) (548,600) (957,251) (370,259)

Weighted average no. of shares

outstanding .................................................................... 140,707,363 140,707,363 140,707,363 128,649,729 115,058,944

Weighted average no. of shares fully

diluted ......................................................................... 140,707,363 140,707,363 140,707,363 128,649,729 115,058,944

Profit/loss after taxes per share

(adjusted for split) ........................................................... (0.11) (0.14) (3.90) (7.44) (3.22)


(adjusted for split) fully diluted .............................................. (0.11) (0.14) (3.90) (7.44) (3.22)

Statement of comprehensive income

Profit/loss for the period ...................................................... (15,783) (20,326) (548,600) (957.251) (370,259)

Items that will not be reclassified over profit and loss

Actual gain/loss pension plan ................................................. — — 4,064 (6,834) —

Tax related to items which will not be

reclassified .................................................................... — — (3,170) 5,331 —

Total loss ........................................................................ (15,783) (20,326) (547,706) (958,756) (370,259)

Attributable to:

Majority interests............................................................... — — (547,706) (958,755) (370,259)

Total ............................................................................. (15,783) (20,326) (547,706) (958,755) (370,259)

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The table below sets out a summary of the Company's unaudited statement of financial position as of 31 March 2014

(restated) and 2013, and the Company's audited balance sheet information as of 31 December 2013, 2012 and 2011.

NOK thousands As of 31 March As of 31 December

2014 2013 2013 2012 2011

Assets (unaudited) (unaudited)

Intangible assets

Goodwill ......................................................................... 321,120 387,551 321,120 387,551 525,870

Capitalised exploration expenditures........................................ 1,555,348 2,247,718 2,056,100 2,175,492 2,387,360

Other intangible assets ....................................................... 643,050 660,581 646,299 665,542 905,726

Deferred tax asset .............................................................. 795,400 — 630,423 — —

Tangible fixed assets

Property, plant and equipment............................................... 3,536,285 2,486,607 2,657,566 1,993,269 902,071

Financial assets

Long-term receivables ......................................................... 286,082 328,379 125,432 31,995 —

Other non-current assets ...................................................... 282,472 200,559 285,399 193,934 18,423

Non-current assets ............................................................ 7,419,757 6,311,395 6,722,340 5,447,783 4,739,450

Inventories

Inventories ...................................................................... 39,549 21,059 40,880 21,209 37,039

Receivables

Accounts receivable ............................................................ 128,239 86,452 134,221 101,839 146,188

Other short-term receivables ................................................. 617,286 337,720 499,419 342,566 532,538

Short term deposits ............................................................ 24,375 23,625 24,075 23,138 21,750

Calculated tax receivables .................................................... 1,416,550 1,278,297 1,411,251 1,273,737 1,397,420

Cash and cash equivalents

Cash and cash equivalents .................................................... 821,069 735,706 1,709,166 1,154,182 841,599

Total current assets ........................................................... 3,047,067 2,482,859 3,819,012 2,916,671 2,976,534

Total assets ..................................................................... 10,466,824 8,794,255 10,541,352 8,364,453 7,715,984

Equity and liabilities

Paid-in-capital

Share capital .................................................................... 140,707 140,707 140,707 140,707 127,916

Share premium .................................................................. 3,089,542 3,089,542 3,089,542 3,089,542 2,083,271

Total paid-in equity ........................................................... 3,230,249 3,230,249 3,230,249 3,230,249 2,211,187

Other equity..................................................................... (57,563) 485,600 (41,780) 505,926 1,465,364

Total equity..................................................................... 3,172,687 3,715,849 3,188,470 3,736,175 3,676,551

Provision for liabilities

Pension obligations ............................................................. 36,375 54,625 66,512 65,258 46,944

Deferred taxes .................................................................. — 125,113 — 126,604 2,042,051

Abandonment provision ........................................................ 829,720 867,895 828,529 798,057 285,201

Provisions for other liabilities ................................................ 696 325 780 647 1,643

Non-current liabilities

Bonds ............................................................................. 2,475,559 589,939 2,473,582 589,078 587,011

Other interest-bearing debt .................................................. 2,150,288 1,453,053 2,036,907 1,299,733 —

Derivatives ...................................................................... 48,228 48,693 49,453 45,971 —

Current liabilities

Short-term loan ................................................................. 680,794 969,819 478,050 567,075 379,550

Trade creditors ................................................................. 218,370 230,398 452,435 258,596 274,308

Accrued public charges and indirect taxes ................................. 24,457 18,881 23,579 24,536 18,568

Abandonment provision ........................................................ 156,397 — 147,375 — —

Other current liabilities ....................................................... 673,254 719,684 795,680 852,722 404,156

Total liabilities and provision for liabilities................................. 7,294,137 5,078,505 7,352,882 4,628,277 4,039,432

Total equity and liabilities .................................................... 10,466,824 8,794,255 10,541,352 8,364,453 7,715,984

9

The table below sets out a summary of the Company's unaudited cash flow information for the first three months ended

31 March 2014 (restated) and 2013, and the Company's audited cash flow information for the years ended 31 December

2013, 2012 and 2011.

NOK thousands

Three Months Ended

31 March

Year Ended

31 December

2014 2013 2013 2012 2011

Cash flow from operating activities (unaudited) (unaudited)


Taxes paid during the period ................................................. — — (26,585) — (5,489)

Taxes refund during the period .............................................. — — 1,318,430 1,443,140 2,323,865

Depreciation .................................................................... 88,863 34,997 470,529 111,687 78,518

Net impairment losses ......................................................... 167,373 — 666,135 2,149,653 150,990

Accretion expenses ............................................................. 12,920 9,924 42,765 17,519 17,009

Reversal of tax item related to shortfall

value of purchase price allocation ........................................ — — — (57,000) (67,823)

Profit/losses on sale of licenses .............................................. — — 734 13,461 —

Changes in derivatives ......................................................... (2,383) 2,708 3,174 44,847 6,033

Amortisation of interest expenses and

arrangement fee.............................................................. 10,064 9,291 88,458 39,576 59,438

Expensed capitalised dry wells ............................................... 73,601 163,563 1,150,541 1,116,403 534,640

Changes in inventories, accounts payable

and receivables ............................................................. (226,752) (12,661) 141,786 44,467 (57,935)

Changes in net current capital and in other

current balance sheet items .............................................. (283,796) (191,924) (394,934) 444,144 (275,741)

Net cash flow from operating activities ................................... (488,876) (266,843) 915,707 1,419,022 1,452,651

Cash flow from investing activities

Payment for removal and decommissioning

of oil fields .................................................................... (2,706) (2,056) (36,739) (678) (35)

Disbursements on investments in fixed

assets ............................................................................. (589,611) (461,186) (1,495,709) (2,874,627) (388,160)

Disbursements on investments in capitalised

exploration and other intangible assets ................................... (114,942) (236,007) (1,358,941) (1,114,277) (1,440,812)

Sale/farm-out of tangible fixed assets and

licenses ........................................................................ — — 86,472 414,336 110,574

Net cash flow from investing activities .................................... (707,260) (699,249) (2,804,917) (3,575,246) (1,718,433)

Cash flow from financing activities

Private placement .............................................................. — — — 900,844 609,452

Repayment of short-term debt ............................................... — — (1,500,000) (2,000,000) (2,539,850)

Repayment of long-term debt ................................................ (290,927) — (2,185,102) (600,000) —

Proceeds from the issuance of long-term

debt .............................................................................. 398,966 147,616 4,729,297 1,967,968 —

Proceeds from the issuance of short-term

debt .............................................................................. 200,000 400,000 1,400,000 2,200,000 2,248,448

Net cash flow from financing activities.................................... 308,039 547,616 2,444,195 2,468,812 318,050

Net change in cash and cash equivalents ................................ (888,097) (418,476) 554,984 312,583 52,269

Cash and cash equivalents at start of the

period. ......................................................................... 1,709,166 1,154,182 1,154,182 841,599 789,330

Cash and cash equivalents at end of the

period.......................................................................... 821,069 735,706 1,709,166 1,154,182 841,599

Breakdown of cash equivalents at end of

period

Bank deposits etc. .............................................................. 810,723 725,109 1,693,319 1,140,750 828,772

Restricted bank deposits ...................................................... 10,346 10,597 15,847 13,432 12,827


period.......................................................................... 821,069 735,706 1,709,166 1,154,182 841,599

10

B.8 Selected Key Pro Forma Financial

Information .................................................

The following tables set out Unaudited Pro Forma Financial Information

for the Company as of and for the three months ended 31 March 2014

and the year ended 31 December 2013 and is prepared under the

assumption that the Transaction will close as described in this

Prospectus.

The Unaudited Pro Forma Financial Information in this Prospectus has

been prepared solely to show how the Transaction would have

impacted on the income statement for the Company for the three

months ended 31 March 2014 and the year ended 31 December 2013

had the Transaction occurred on 1 January 2014 and 1 January 2013

respectively, and the statement of financial position as of 31 March

2014 had the Transaction occurred at 31 March 2014. The Unaudited

Pro Forma Financial Information has been prepared for illustrative

purposes only and, because of its nature, addresses a hypothetical

situation and, therefore, does not purport to present the results of

operations of the Company as if the Transaction had occurred at the

commencement of the period being presented, or the financial

condition of the Company as at the date being presented, nor should it

be used as the basis of projections of the results of operations for the

Company for any future period or the financial condition of the

Company for any day in the future.

The table below sets out the Company's unaudited pro forma consolidated condensed income statement for the year

ended 31 December 2013, as if the Transaction had taken place at 1 January 2013.

NOK thousands Year Ended

31 December 2013

Det nor

(IFRS)

(audited)

Marathon

(NGAAP)

(audited)

IFRS

adjustments

(unaudited)

Pro forma

adjustments

(unaudited)

Notes to IFRS

and pro

forma

adjustments

(unaudited)

Pro forma

ending 31

December

2013

(unaudited)

Operating revenues and

expenses

Petroleum revenues ......................................................................................... 933,162 18,670,117 (34,339) — 1 19,568,940

Other operating revenues .................................................................................. 10,719 2,594 — — 13,313

Total operating revenues ................................................................................. 943,881 18,672,711 (34,339) — 19,582,253

Exploration expenses ....................................................................................... 1,637,063 536,526 — — 2,173,589

Production costs ............................................................................................. 249,619 1,477,439 (8,983) — 1 1,718,075

Pay roll and pay roll-related

expenses ................................................................................................... 38,025 — — — 38,025

Depreciation ................................................................................................. 470,529 1,485,126 (559,349) 1,586,354 3, 4, 5 2,982,660

Impairments .................................................................................................. 666,135 18,090 — — 684,225

Provision for

decommissioning ..........................................................................................

— 371,985 (390,309) — 4 (18,325)

Other operating expenses .................................................................................. 109,886 53,389 — 52,408 6 215,684

Total operating expenses ................................................................................. 3,171,256 3,942,554 (958,641) 1,638,762 7,793,932

Operating

profit/(loss) ............................................................................................... (2,227,376) 14,730,156 924,302 (1,638,762) 11,788,320

Financial income and

expenses

Interest income .............................................................................................. 40,750 12,545 — — 53,295

Other financial income ..................................................................................... 80,567 198,245 — — 278,812

Change in fair value of

financial derivatives

— 111,324 — — 111,324

Interest expenses ............................................................................................ 301,834 106,520 — 363,700 6 772,054

Impairment of investments in

subsidiaries

— 1,018,611 — — 8 1,018,611

11


31 December 2013

Det nor

(IFRS)

(audited)

Marathon

(NGAAP)

(audited)

IFRS

adjustments

(unaudited)

Pro forma

adjustments

(unaudited)

Notes to IFRS

and pro

forma

adjustments

(unaudited)

Pro forma

ending 31

December

2013

(unaudited)

Other financial expenses ................................................................................... 137,435 99,878 52,344 4 289,656

Net financial items ......................................................................................... (317,952) (1,025,666) (99,878) (416,044) (1,859,539)

Profit/(loss) before taxes ................................................................................. (2,545,327) 13,704,491 824,424 (2,054,805) 9,928,781

Taxes (+)/tax income (-) ................................................................................... (1,996,727) 11,257,690 657,521 (1,298,364) 7 8,620,120

Net income .................................................................................................. (548,600) 2,446,801 166,903 (756,441) 1,308,661

__________

Source: Det norske and Marathon Norway

Classification of the Marathon accounts is done by Det norske based on input from Marathon

The notes to the unaudited pro forma financial information are an integral part of the unaudited pro forma income

statement information.

The table below sets out the Company's unaudited pro forma income statement for the quarter ended 31 March 2014, as

if the Transaction had taken place at 1 January 2014.

NOK thousands Three months Ended

31 March 2014

Det nor

(IFRS)

(unaudited)

Marathon

(NGAAP)

(unaudited)

IFRS

adjustments

(unaudited)

Pro forma

adjustments

(unaudited)

Notes to IFRS

and pro

forma

adjustments

(unaudited)

Pro forma

ending 31

March 2014

(unaudited)


expenses


Other operating revenues .................................................................................. 3,241 527 — — 3,768


Exploration expenses ....................................................................................... 109,582 15,383 — — 124,965

Production costs ............................................................................................. 42,949 532,639 (10,230) — 1 565,358


expenses ................................................................................................... 4,559 — — 4,559

Depreciation ................................................................................................. 88,863 243,115 (70,314) 471,229 3, 4, 5 732,893

Provision for

decommissioning ..........................................................................................

— 83,837 (83,837) — 4 —

Impairment losses 167,373 167,737


Total operating expenses ................................................................................. 426,631 892,816 (164,381) 523,637 1,678,703

Operating

profit/(loss) ............................................................................................... (268,290) 3,237,368 89,787 (523,637) 2,535,228


expenses

Interest income .............................................................................................. 12,145 2,909 — — 15,054




subsidiaries

— 62,374 — — 8 62,374

Other financial expenses ................................................................................... 20,530 66,882 25,945 14,948 4 128,306

Net financial items ......................................................................................... (60,475) (90,743) (25,945) (260,633) (437,797)

Profit/(loss) before taxes ................................................................................. (328,765) 3,146,625 63,842 (784,271) 2,097,431

Taxes (+)/tax income (-) ................................................................................... (312,981) 2,419,031 91,254 (445,553) 7 1,751,750

Net income .................................................................................................. (15,784) 727,594 (27,412) (338,717) 345,681

12

__________





The table below sets out the Company's unaudited pro forma Statement of financial position as of 31 March 2014, as if the

Transaction had taken place at 31 March 2014.

NOK thousands As of

31 March 2014

Det nor

(IFRS)

(unaudited)

Marathon

(NGAAP)

(unaudited)

IFRS

adjustments

(unaudited)

Pro forma

adjustments

(unaudited)

Notes to IFRS

and pro

forma

adjustments

(unaudited)

Pro forma as of

31 March 2014

(unaudited)

ASSETS

Intangible assets

Goodwill ...................................................................................................... 321,120 — — 9,978,247 5 10,299,367

Capitalised exploration

expenditures .............................................................................................. 1,555,348 250,741 — — 1,806,089

Other intangible assets ..................................................................................... 643,050 — — 6,531,090 5 7,174,140

Deferred tax assets.......................................................................................... 795,400 587,829 (587,829) — 7 795,400

Total intangible assets ..................................................................................... 3,314,918 838,570 (587,829) 16,509,337 20,074,996


Property, plant and

equipment ................................................................................................. 3,536,285 5,063,670 229,431 936,378 4, 5 9,765,764

Total tangible fixed assets ................................................................................ 3,536,285 5,063,670 229,431 936,378 9,765,764

Financial assets

Long term receivables ...................................................................................... 138,078 — — — 138,078

Calculated tax receivables ................................................................................. 148,004 — — — 148,004

Other non-current assets ................................................................................... 282,472 — — — 282,472

Investments in subsidiaries ................................................................................. — 4,789,680 (4,789,680) — 8 —

Total financial fixed assets ............................................................................... 568,554 4,789,680 (4,789,680) — 568,554

Total non-current assets .................................................................................. 7,419,757 10,691,920 (5,148,078) 17,445,715 30,409,314

Inventories

Inventories ................................................................................................... 39,549 112,652 — — 152,201

Total inventories ........................................................................................... 39,549 112,652 — — 152,201

Receivables

Account receivables ......................................................................................... 128,239 119,328 — 5,323,673 9 5,571,240

Account receivables – group

companies ................................................................................................. — 5,323,673 — (5,323,673) 9 —

Financial derivatives ........................................................................................ — 61,096 — — 61,096

Other short-term receivables .............................................................................. 617,286 362,362 186,614 — 1 1,166,262

Short-term deposits ......................................................................................... 24,375 — — — 24,375

Calculated tax receivables ................................................................................. 1,416,550 — — — 1,416,550

Total current receivables ................................................................................. 2,186,450 5,866,459 186,614 — 8,239,523

Cash and cash equivalents ................................................................................. 821,069 647,738 — — 1,468,807

Total current assets ........................................................................................ 3,047,067 6,626,850 186,614 — 9,860,531

Assets classified as held for

sale ......................................................................................................... — — 4,789,680 (4,789,680) 8, 9 —

TOTAL ASSETS ............................................................................................... 10,466,824 17,318,770 (171,784) 12,656,035 40,269,845

EQUITY AND LIABILITIES

Paid in capital

Share capital ................................................................................................. 140,707 6,757 — 42,881 6 190,345

Share premium ............................................................................................... 3,089,542 264,631 — 2,933,564 6 6,287,737

Total paid-in equity ........................................................................................ 3,230,249 271,387 — 2,976,445 6,478,082

13

Retained earnings

Other equity.................................................................................................. (57,563) 727,594 (166,067) (974,477) 6 (470,513)

Total retained earnings ................................................................................... (57,563) 727,594 (166,067) (974,477) (470,513)

Total equity.................................................................................................. 3,172,687 998,981 (166,067) 2,001,969 6,007,569

Provisions for liabilities

Pension obligations .......................................................................................... 36,375 50,937 51,481 — 2 138,793

Deferred taxes ............................................................................................... — — 401,905 5,061,275 5, 7 5,463,180

Abandonment provision ..................................................................................... 829,720 2,114,183 (542,882) 936,378 4, 5 3,337,339

Provisions for other liabilities ............................................................................. 696 — — — 696

Total provisions ............................................................................................. 866,791 2,165,120 (89,497) 5,997,653 8,940,068


Bonds .......................................................................................................... 2,475,559 — — (593,240) 6 1,882,319

Other interest-bearing debt ............................................................................... 2,150,288 — — 12,118,619 6, 9 14,268,907

Long-term debt – group

companies ................................................................................................. — 3,374,135 — (3,374,135) 9 —

Derivatives ................................................................................................... 48,228 13,430 — — 61,658

Total non-current liabilities .............................................................................. 4,674,075 3,387,565 — 8,151,244 16,212,884

Current liabilities

Short-term loan .............................................................................................. 680,794 — — (680,794) 6 —

Trade creditors .............................................................................................. 218,370 351,546 — 60,884 9 630,800

Accounts receivable – group

companies ................................................................................................. — 60,884 — (60,884) 9 —

Accrued public charges and

indirect taxes.............................................................................................. 24,457 108,540 — — 132,997

Abandonment provisions ................................................................................... 156,397 77,964 — — 234,361

Other current liabilities .................................................................................... 673,254 492,748 83,780 84,675 1, 6 1,334,457

Dividend ...................................................................................................... — 2,890,000 — (2,890,000) 9 —

Taxes payable ................................................................................................ — 6,785,421 — (8,712) 6, 7 6,776,709

Total current liabilities .................................................................................... 1,753,272 10,767,104 83,780 (3,494,831) 9,109,325

Total liabilities .............................................................................................. 7,294,137 16,319,789 (5,717) 10,654,067 34,262,277

TOTAL LIABILITY AND

EQUITY ..................................................................................................... 10,466,824 17,318,770 (171,784) 12,656,035 40,269,845

__________


Classification of the Marathon accounts is made by the Company based on input from Marathon.

The notes to the unaudited pro forma financial information are an integral part of the unaudited pro forma statement of

financial position information.

B.9 Profit Forecast or Estimate ................................. Not applicable. No profit forecast or estimate is included in this

Prospectus.

B.10 Audit Report Qualification .................................. Not applicable.

B.11 Working Capital ............................................... Not applicable. The Company has sufficient working capital for its

present requirements.

Element C—Securities

C.1 Type and Class of Securities Being

Offered and Admitted to Trading and

Identification Number .....................................

The Company has one class of shares in issue, and all shares in that

class have equal rights in the Company. The Shares have been issued

under the Norwegian Public Limited Liability Companies Act, and are

registered with the VPS under ISIN NO 0010345853.

C.2 Currency of Issue ............................................. The Offer Shares will be issued in NOK, and will be quoted and traded

in NOK on the Oslo Stock Exchange.

C.3 Number and Shares in Issue and Par

Value .........................................................

As of the date of this Prospectus, the Company's share capital is NOK

140,707,363, consisting of 140,707,363 Shares with a par value of NOK

1 each.

14

C.4 Rights Attaching to the Securities ......................... All Shares provides equal rights in the Company in accordance with the

Public Limited Liability Companies Act and the Articles of Association of

the Company. The holders of the Shares have certain preferential rights

to subscribe for new Shares issued by the Company, which may be

waived by a resolution supported by at least two-third of the attending

Shares at the general meeting. The holders of the Shares have no pre-

emptive rights in connection with transfer of Shares.

C.5 Restrictions on Transfer ..................................... The Articles of Association do not provide for any restrictions, or a right

of first refusal, on transfer of Shares. Share transfers are not subject to

approval by the Board of Directors.

C.6 Admission to Trading ........................................ Trading in the Offer Shares on the Oslo Stock Exchange is expected to

commence under the trading symbol "DETNOR" on or about 6 August

2014

C.7 Dividend Policy ............................................... As future developments of the Company will require substantial

investments, and that the Company plans to carry out an active

exploration programme during the next few years, dividends to

shareholders will not be given priority in the short term. In the current

period, the Company’s priority is rather to create value for

shareholders by identifying the license portfolio’s underlying values,

and by maturing existing discoveries and development projects towards

production.

The Company has not distributed any dividend since its incorporation in

2006.

Element D—Risks

D.1 Key Risks Specific to the Company or

its Industry ..................................................

Risks Relating to the Oil and Gas Industry

The Company’s business, results of operations, cash flow and

financial condition depend significantly on the level of oil and gas

prices and market expectations of these, and may be materially

adversely affected by volatile oil and gas prices.

The Company is affected by the general global economic and

financial market situation.

The Company is dependent on finding, acquiring, developing and

producing oil and gas reserves that are economically recoverable.

Exploration and production operations involve numerous

operational risks and hazards which may result in material losses

or additional expenditures.

The market in which the Company operates is highly competitive.

The Company’s business and financial condition could be

materially adversely affected if the Norwegian tax regulations for

the petroleum industry were amended.

Risks relating to the Business of the Company

The Company’s business is concentrated in a few fields.

There are material risks related to determination and

redetermination of unitised petroleum deposits.

The Company is subject to risks and uncertainties relating to the

electrification of the Utsira High.

The Company’s development projects are associated with material

15

risks relating to delays and costs.

The Company is exposed to risks relating to unionised labour and

general labour interruptions.

The Company is subject to material third party risk in terms of

operators and partners.

The Company is exposed to material losses on its operated assets.

The Company is subject to material risks relating to capacity

constraints and cost inflation in the service sector.

The Company’s future growth and performance depend on a

number of factors, which outcome cannot be guaranteed.

The Company may not have access to necessary infrastructure for

the transportation of oil and gas.

The Company faces material risks related to decommissioning

activities and related costs.

The Company is exposed to political, regulatory and unrest risks.

The Company is vulnerable to adverse market perception.

The Company may be subject to amterial liability under

environmental laws and regulations.

The Company’s insurance may not provide sufficient funds to

protect the Company from liabilities that could result from its

operations.

Availability of drilling equipment and other required equipment

and access restrictions may materially affect the Company’s

operations.

The Company’s oil and gas production could vary significantly

from reported reserves and resources.

Accounting policies may result in non-cash charges and write

downs considered unfavourably by the market.

The Company may not be successful in attracting and retaining

sufficient skilled employees.

The Company faces the risk of litigation or other proceedings in

relation to its business.

The Company may experience conflicts of interest.

Financial Risks

The Company may require additional capital in the future, which

may not be available on favourable terms, or at all.

The Company is exposed to interest rate and liquidity risk

associated with its borrowing portfolio and fluctuations in

underlying interest rates.

The Company is subject to risks relating to pension schemes.

16

Changes in foreign exchange rates may affect the Company’s

results of operations and financial position.

The Company is exposed to risk of counterparties being unable to

fulfil their financial obligations.

D.2 Key Risks Specific to the Transaction ..................... Risks Relating to the Transaction

There are several risks relating to the implementation of the

Transaction.

The Company may not be able to successfully integrate Marathon

Norway’s business.

The Company will encounter separation challenges as a

consequence of the Transaction.

The Company may not be able to transfer the contracts currently

held by Marathon Norway or transfer these on the same terms.

The Company is subject to potential loss of key Marathon

employees as a result of the Transaction.

The unaudited pro forma financial information is not necessarily

indicative of the Company’s future results.

The Company may fail to successfully implement synergies from

consolidated tax positions.

The Company may discover contingent or other liabilities within

Marathon Norway.

Risks Relating to Marathon Norway’s Business in Particular

Unexpected shutdowns may occur at the Alvheim FPSO.

The Company is exposed to risks relating to capacity booking for

transport of gas.

D.2 Key Risks Specific to the Securities ....................... Risks Relating to the Shares

The market value of the Shares may fluctuate significantly and

may not reflect the underlying asset value of the Company.

The Company has not paid dividends in the past and the Company

may not become in a position to pay dividends in the future.

The ability to bring an action against the Company may be limited

under Norwegian law.

Any future share issues and sales of Shares by major shareholders

may have a material adverse effect on the market price of the

Shares.

Issuances of Shares may have a dilutive effect on the ownership

interests of the shareholders of the Company at that time.

U.S. holders of Shares that are not “qualified institutional buyers”

will not be able to exercise the Subscription Rights.

It may be difficult for investors based in the United States to

enforce civil liabilities predicated on U.S. securities laws against

the Company or the Company’s directors and executive officers.

17

Holders of Shares that are registered in a nominee account may

not be able to exercise voting rights as readily as other

Shareholders.

Following completion of the Rights Issue, substantial share

ownership will remain concentrated in the hands of one

Shareholder. The interests of such Shareholders wil not

necessarily be aligned with the other shareholders and future

sales of Shares by such Shareholder could have a material

adverse effect on the market price of the Shares.

The Subscription Price is not an indication that the Offer Shares

can be sold for an amount equal to the Subscription Price.

Risks Relating to the Rights Issue

Existing Shareholders who do not participate in the Rights Issue

may experience significant dilution in their shareholding.

An active trading market in Subscription Rights may not develop

on the Oslo Stock Exchange and/or the market value of the

Subscription Rights may fluctuate.

The sale of Subscription Rights by or on behalf of Existing

Shareholders may result in a reduction in the market price of the

Subscription Rights and the Shares and increased volatility in the

Shares.

If the Rights Issue is not completed, the Subscription Rights will no

longer be of value.

The Rights Issue is not conditional upon completion of the

Transaction.

Shareholders outside of Norway are subject to exchange rate risk.

Element E—Offer

E.1 Net Proceeds and Estimated Expenses ................... The net proceeds of the Rights Issue are expected to be approximately

between NOK 2,960 and NOK 2,975 after deduction of costs and

expenses to be borne by the Company, currently estimated to be in the

range of NOK 25 to NOK 40 million. Estimated expenses comprise of

fees to the Joint Bookrunners, legal and other advisors, auditors,

accountants and providers of transaction advisory services and other

direct expenses (such as printing, distribution etc.) and fees to the Oslo

Stock Exchange and the Norwegian FSA.

E.2a Reasons for the Rights Issue and Use of

Proceeds .....................................................

The Company intends to apply the net proceeds from the Rights Issue to

finance the Transaction and as part of an overall refinancing of the

Company and financing of the planned developments at the Ivar Aasen

and Johan Sverdrup fields.

E.3 Terms and Conditions for the Rights

Issue ..........................................................

The Rights Issue comprises 61,911,239 Offer Shares, each with a par

value of NOK 1.00, offered by the Company at a Subscription Price of

NOK 48.50 per Offer Share, thereby raising gross proceeds of NOK

3,002.7 million. Existing Shareholders will be granted tradable

Subscription Rights that, subject to applicable law, provide preferential

rights to subscribe for and be allocated Offer Shares in the Rights Issue

at the Subscription Price. Oversubscription and subscription without

Subscription Rights will be permitted; however, there can be no

18

assurance that Offer Shares will be allocated for such subscriptions.

The completion of the Rights Issue is subject to the condition that, Aker

Capital AS validly subscribes its pro rata share of the Rights Issue, and

that unless the Rights Issue is fully subscribed, the Underwriting

Agreement remains in full force and effect.

The Subscription Price in the Rights Issue is NOK 48.50 per Offer Share.

The Subscription Price represents a discount of approximately 32.6% to

the closing price of NOK 72.00 per Share as quoted on the Oslo Stock

Exchange on 8 July 2014, and a discount of approximately 25.2% to the

theoretical share price exclusive of the Subscription Rights (TERP)

based on the Company’s closing share price of NOK 72.00 on 8 July

2014.

The Subscription Period will commence on 15 July 2014 at 09:00 hours

(CET) and end on 29 July 2014 at 16:30 hours (CET). The Subscription

Period may not be extended or shortened. The Subscription Rights will

be tradable on the Oslo Stock Exchange from 15 July 2014 at 09:00

hours (CET) to 24 July 2014 at 16:30 hours (CET).

For the purposes of determining eligibility to Subscription Rights, the

Company will look solely to its register of shareholders as of the expiry

of the Record Date.

Each Existing Shareholder will be granted 11 Subscription Rights for

every 25 Shares registered as held by such Existing Shareholder at the

expiry of the Record Date.

The Subscription Rights, including acquired Subscription Rights,

must be used to subscribe for Offer Shares before the end of the

Subscription Period (i.e., 29 July 2014 at 16:30 hours (CET)) or sold

before 24 July 2014 at 16:30 hours (CET). Subscription Rights that

are not sold before 24 July 2014 at 16:30 hours (CET) or exercised

before 29 July 2014 at 16:30 hours (CET) will have no value and will

lapse without compensation to the holder.

E.4 Material and Conflicting Interests ......................... The Joint Bookrunners may in the future provide investment and

commercial banking services to the Company in the ordinary course of

business, for which they may have received and may continue to

receive customary fees and commissions. The Joint Bookrunners may

currently own Shares in the Company.

Beyond the abovementioned, the Issuer is not aware of any interest of

natural and legal persons involved in the Rights Issue.

E.5 Estimated Expenses Charged to

Investors .....................................................

Not applicable. The expenses related to the Rights Issue will be paid by

the Company.

19

2. RISK FACTORS

An investment in the Shares involves inherent risks. An investor should consider carefully all information set forth in

this Prospectus and, in particular, the specific risk factors set out below. An investment in the Shares is suitable only for

investors who understand the risks associated with this type of investment and who can afford a loss of the entire

investment. If any of the risks described below materialise, individually or together with other circumstances, they may

have a material adverse effect on the Company’s, or, subject to closing of the Transaction, the Company’s and

Marathon Oil Norge AS’ (“Marathon Norway”) business, financial condition, results of operations and cash flow, which

may affect the ability of the Company to pay dividends and cause a decline in the value and trading price of the Shares

that could result in a loss of all or part of any investment in the Shares. The order in which the risks are presented

below is not intended to provide an indication of the likelihood of their occurrence nor of their severity or significance.

The information in this Section is as of the date of this Prospectus.

2.1 Risks Relating to the Oil and Gas Industry

The Company’s business, results of operations, cash flow and financial condition depend significantly on the level

of oil and gas prices and market expectations of these, and may be adversely affected by volatile oil and gas

prices.

The Company’s future revenues, cash flow, profitability and rate of growth depend substantially on prevailing

international and local prices of oil and gas. Because oil and gas is globally traded, the Company is unable to control the

prices it receives for the oil and gas it produces.

Both oil and gas prices are unstable and are subject to significant fluctuations for many reasons, including, but not

limited to:

changes in global and regional supply and demand, and expectations regarding future supply and demand for oil

and gas, even relatively minor changes;

geopolitical uncertainty;

availability of pipelines, tankers and other transportation and processing facilities;

proximity to, and the capacity and cost of, transportation;

petroleum refining capacity;

price, availability and government subsidies of alternative fuels;

price and availability of new technologies;

the ability of the members of the Organisation of the Petroleum Exporting Countries (OPEC) and other oil-

producing nations to set and maintain specified levels of production and prices;

political, economic and military developments in producing regions, particularly the Middle East, Russia, Africa

and Central and South America, and domestic and foreign governmental regulations and actions, including

import and export restrictions, taxes, repatriations and nationalisations;

global and regional economic conditions;

trading activities by market participants and others either seeking to secure access to oil and gas or to hedge

against commercial risks, or as part of investment portfolio activity;

weather conditions and natural disasters; and

terrorism or the threat of terrorism, war or threat of war, which may affect supply, transportation or demand

for hydrocarbons and refined petroleum products.

It is impossible to accurately predict future oil and gas price movements. The Company’s profitability is determined in

large part by the difference between the income received from the oil and gas that the Company produces and its

operational costs, taxation costs relating to extraction (which are assessable irrespective of sales), as well as costs

incurred in transporting and selling the oil and gas. Therefore, lower prices for oil and gas may reduce the amount of oil

and gas that the Company is able to produce economically or may reduce the economic viability of the production levels

20

of specific wells or of projects planned or in development to the extent that production costs exceed anticipated revenue

from such production.

The economics of producing from some wells and assets may also result in a reduction in the volumes of the Company’s

reserves. The Company might also elect not to produce from certain wells at lower prices. All of these factors could

result in a material decrease in the Company’s net production revenue, causing a reduction in its oil and gas acquisition

and development activities. In addition, certain development projects could become unprofitable as a result of a decline

in price and could result in the Company having to postpone or cancel a planned project, or if it is not possible to cancel

the project, carry out the project with negative economic impact.

In addition, a substantial material decline in prices from historical average prices could reduce the Company’s ability to

refinance its outstanding subordinated notes and may result in a reduced borrowing base under credit facilities available

to the Company and possibly require that a portion of the Company’s bank debt be repaid. From time to time the

Company may enter into agreements to receive fixed prices on its oil and gas production to offset the risk of revenue

losses if commodity prices decline, however, if commodity prices increase beyond the levels set in such agreements, the

Company will not benefit from such increases and the Company may nevertheless be obligated to pay suppliers and others

in the market based on such higher price. Changes in the oil and gas prices may thus adversely affect the Company’s

business, operating results and financial condition.

The Company is affected by the general global economic and financial market situation.

The Company may be affected by the general state of the economy and business conditions, including but not limited to,

the occurrence of recession and inflation, unstable or adverse credit markets, fluctuations in operating expenses,

technical problems, work stoppages or other labour difficulties, property or casualty losses which are not adequately

covered by insurance, and changes in governmental regulations, such as increased taxation or introduction of regulations

increasing operating costs and capital expenditure which may materially and adversely affect the Company’s business,

operating results, cash flow and financial conditions.

The Company is dependent on finding, acquiring, developing and producing oil and gas reserves that are

economically recoverable.

Oil and gas exploration and production activities are capital intensive and inherently uncertain in their outcome.

Significant expenditure is required to establish the extent of oil and gas reserves through seismic and other surveys and

drilling and there can be no certainty that further commercial quantities of oil and gas will be discovered or acquired by

the Company. The Company’s existing and future oil and gas appraisal and exploration projects may therefore involve

unprofitable efforts, either from dry wells or from wells that are productive but do not produce sufficient net revenues to

return a profit after development, operating and other costs. Few prospects that are explored are ultimately developed

into producing oil and gas fields. Even if the Company is able to discover or acquire commercial quantities of oil and gas

in the future, there can be no assurance that these will be commercially developed.

Completion of a well does not guarantee a profit on the investment or recovery of the costs associated with that well.

Additionally, the cost of operations and production from successful wells may be materially adversely affected by unusual

or unexpected geological formation pressures, oceanographic conditions, hazardous weather conditions, delays in

obtaining governmental approvals or consents, shut-ins of connected wells, difficulties arising from environmental or

other challenges or other factors. Any inability of the Company to recover its costs and generate profits from its

exploration and production activities could have a material adverse effect on the Company’s business, results of

operations, cash flow, financial condition and prospects.

Exploration and production operations involve numerous operational risks and hazards which may result in

material losses or additional expenditures.

Developing oil and gas resources and reserves into commercial production involves a high degree of risk. The Company’s

exploration operations are subject to all the risks common in its industry. These hazards and risks include but are not

limited to encountering unusual or unexpected rock formations or geological pressures, geological uncertainties, seismic

shifts, blowouts, oil spills, uncontrollable flows of oil, natural gas or well fluids, explosions, fires, improper installation or

operation of equipment and equipment damage or failure.

Given the nature of its offshore operations, the Company’s exploration and drilling facilities are also subject to the

hazards inherent in marine operations, such as capsizing, sinking, grounding and damage from severe storms or other

severe weather conditions.

The offshore drilling conducted by the Company involves drilling risks including but not limited to high pressures and

mechanical difficulties, which increase the risk of delays in drilling and of operational challenges arising, as well as

21

material costs and liabilities occurring. Such dangers were evidenced by the blowout of the Macondo well in the Gulf of

Mexico in 2010.

If any of these events were to occur in relation to any of the Company’s Licenses, they could amongst other adverse

effects result in environmental damage, injury to persons and loss of life and a failure to produce oil or gas in commercial

quantities. They could also result in significant delays to drilling programmes, a partial or total shutdown of operations,

significant damage the Company’s equipment and equipment owned by third parties and personal injury or wrongful

death claims being brought against the Company. These events can also put at risk some or all of the Company’s licenses

and could result in the Company incurring significant civil liability claims (as BP incurred following the Macondo well

blowout), significant fines or penalties as well as criminal sanctions potentially being enforced against the Company

and/or its officers. The Company may also be required to curtail or cancel any operations on the occurrence of such

events.

In its capacity as holder and operator of licenses under the Norwegian Petroleum Act, the Company is subject to strict

statutory liability in respect of losses or damage suffered as a result of pollution caused by spills or discharges of

petroleum from facilities covered by any of its licenses. This means that anyone who suffers damage or loss as a result of

pollution caused by any of the license areas can claim compensation from the Company without needing to demonstrate

that the damage is due to any fault on the Company’s part.

Any of the above circumstances could materially and adversely affect the Company’s business, prospects, financial

condition, cash flow and results of operations.

The market in which the Company operate is highly competitive.

The oil and gas industry is very competitive. Competition is particularly intense in the acquisition of (prospective) oil and

gas licenses. The Company’s competitive position depends on its geological, geophysical and engineering expertise, its

financial resources, its ability to develop its assets and its ability to select, acquire, and develop proven reserves. The

Company competes with a substantial number of other companies with larger technical staffs and greater financial and

operational resources. Many such companies not only engage in the acquisition, exploration, development, and

production of oil and gas reserves, but also carry on refining operations and market refined products. In addition, the

Company competes with major oil and gas companies and other companies within industries supplying energy and fuel in

the marketing and sale of oil and gas to transporters, distributors, and end users, including industrial, commercial, and

individual consumers. The Company also competes with other oil and gas companies in attempting to secure drilling rigs

and other equipment necessary for drilling and completion of wells. Such equipment may be in short supply from time to

time. In addition, equipment and other materials necessary to construct production and transmission facilities may be in

short supply from time to time. Finally, companies not previously investing in oil and gas may choose to acquire reserves

to establish a firm supply or simply as an investment. Such companies will also provide competition for the Company.

As a result of this competitive environment, the Company may be unable to acquire attractive, suitable licenses or on

terms that it considers acceptable. As a result, the Company’s revenues may decline over time, thereby materially and

adversely affecting its business, results of operations, financial condition, cash flow and prospects.

The Company’s business and financial condition could be adversely affected if the Norwegian tax regulations for

the petroleum industry were amended.

The Company’s taxable revenue is subject to a special petroleum tax in Norway which is attractive for companies

producing oil and gas. Through its development projects the Company has built up a significant tax loss balance that can

be utilised against future production revenues. There is no assurance that future political conditions in Norway will not

result in the government adopting different policies for petroleum taxation. In the event there are changes to this tax

regime, it could lead to new investments being less attractive and prevent from the Company further growth.

Furthermore, the amounts of taxes the Company must pay could also change significantly as a result of new

interpretations of the relevant tax laws and regulations or changes to such laws and regulations. In addition, taxing

authorities could review and question the Company’s tax returns leading to additional taxes and tax penalties which could

be material.

The financing of the Company is based on the assumption that the Company will be able to claim tax refund for its

exploration costs, including all costs related to its drilling units. To the extent this assumption should be proven wrong or

if such tax refund rights are limited or repealed, this may have a material adverse effect on the Company’s financial

position and may constitute an event of default which may trigger mandatory repayment or reduction of the balance

under the credit facilities of the Company.

22

Pursuant to the Norwegian Assessment Act, the Norwegian tax authorities may change a tax payer’s tax assessment within

ten years after the tax year (changes in disfavour of the tax payer cannot be made more than two years after the tax year

if the tax payer has provided the tax authorities with correct and complete information). Even though the Company is of

the opinion that it has provided the tax authorities with correct and complete information, there can be no assurance

that the tax authorities will not change, or at least claim to have the authority to change, the Company’s tax assessment

from previous tax years.

2.2 Risk relating to the Business of the Company

The Company’s business is concentrated in a few fields.

The Company’s production of oil and gas is concentrated in a limited number of offshore fields. If mechanical or technical

problems, storms or other events or problems affect the production on one of these offshore fields, it may have direct

and significant impact on a substantial portion of the Company's production or if the actual reserves associated with any

one of the Company's fields are less than the estimated reserves, the Company's results of operations and financial

condition could be materially adversely affected. Further, some of the Company’s material Licenses are in a (early)

development phase without production, including Johan Sverdrup and Ivar Aasen. The early stages, being the exploration

or development period of a license are commonly associated with higher risk, requiring high levels of capital expenditure

without a commensurate degree of certainty of a return on that investment.

There are risks related to determination and redetermination of unitised petroleum deposits.

According to the Norwegian Petroleum Act, unitisation is required if a petroleum deposit extends over several production

licenses and these production licenses have a different ownership representation. Consensus must be achieved between

the licensees on the most rational coordination of the joint development and ownership distribution of the petroleum

deposit, which must be set out in an agreement regulating the joint production, transportation, utilisation and cessation

of the petroleum activities related to the license. If such consensus is not reached within reasonable time, the Ministry of

Petroleum and Energy (the “MPE”) may determine how such joint petroleum activities shall be conducted, including the

apportionment of the deposit.

As of the date of this Prospectus, the Gina Krog field and Ivar Aasen fields have been unitised while the unitisation of the

Johan Sverdrup field is under negotiation. See Section 6.4 “Business Overview—Key Assets—Early Development Projects”

for further information on the unitisation of the Johan Sverdrup field. No assurance can be given that the outcome of the

unitisation negotiations will be resolved fully to Company’s satisfaction, or will be resolved within reasonable time and

without incurring significant costs or that the Company may not end up with a lower share in the joint deposit than

expected. Hence, the Company’s on-going unitisation processes may have a material adverse effect on the Company’s

business, operating result, cash flow and financial condition.

Further, a unitisation agreement may include a redetermination clause, stating that the apportionment of the deposit

between licenses can be adjusted within certain agreed time periods. Any such redetermination of the Company’s

interest in any of its licenses may have a negative effect on the Company’s interest in the unitised deposit, including the

Company’s tract participating and paying interest. No assurance can be made that any such redetermination will be

satisfactorily resolved, or will be resolved within reasonable time and without incurring significant costs. Any

redetermination negatively affecting the Company’s interest in a unit may have a material adverse effect on the

Company’s business, operating result, cash flow and financial condition.

The Company is subject to risks and uncertainties relating to the electrification of the Utsira High.

There are uncertainties relating to the planned regional (area) electrification of the Utsira High in relation to the Johan

Sverdrup, Ivar Aasen and Gina Krog fields. The development of the fields has raised political debate as to the economic,

environmental and political aspects of the suggested power from shore solution and the timing and extent thereof.

Political or regulatory resolutions may require a joint power supply of all the fields on the Utsira High earlier than

expected, which again may result in a substantial gap between the Company’s preliminary investment estimate for the

electrification process (for Phase 1 development of Johan Sverdrup) and the actual costs relating to the regional Utsira

High electrification process.

Further, even though the proposed timeline for an area solution for joint power supply from shore entails that such

solution shall be implemented in the start-up phase of Johan Sverdrup, no assurance can be given that the projects can

be carried out within the planned timeline. There is a risk that an area wide (regional) power from shore solution may

cause a delay of the Phase 1 development of Johan Sverdrup.

Any delays or cost increases relating to the electrification process, including, but not limited to those relating to

commercial, political, environmental aspects or similar, may have a material adverse effect on the Company’s business,

operating results, cash flow and financial condition.

23

The Company’s development projects are associated with risks relating to delays and costs.

The Company’s on-going development projects involve advanced engineering work, extensive procurement activities and

complex construction work to be carried out under various contract packages at different locations onshore.

Furthermore, the Company (together with its license partners), must carry out drilling operations, install, test and

commission installations offshore and finally obtain governmental approval to take them into use, prior to

commencement of production. The complexity of Company’s development projects makes them very sensitive to

circumstances which may affect the planned progress or sequence of the various activities, as this may result in delays or

costs increases. In particular, this applies to Company’s early stage development for Johan Sverdrup and development of

Ivar Aasen. Johan Sverdrup is a complicated multi-facility early stage development while the Ivar Aasen development is

technically challenging and the first development the Company will do as operator of a field.

Although Company believes that the development projects will be completed on schedule in accordance with all license

requirements and within the estimated budgets, the Company’s current or future projected target dates for production

may be delayed and significant cost overruns may incur due to delay, changes in any part of the Company’s development

projects, technical difficulties, project mismanagement, equipment failure, natural disasters, political, economic,

taxation, legal, regulatory or social uncertainties, piracy, terrorism, visa issues or protests, which again may materially

adversely affect the Company’s future business, operating results, financial condition and cash flow. Ultimately, the

Company risks that the rights granted under its licenses or agreement with the government may be forfeited and the

Company may be liable to pay large sums, which could jeopardise its ability to continue operations.

Going forward, the Company, or the operator of licenses in which the Company has an interest, may be unable to

explore, appraise or develop petroleum operations or the development or production of oil and/or gas is delayed as a

result of, among other things, activities such as failure to obtain equipment, equipment failure, natural disasters,

political, economic, taxation, legal, regulatory or social uncertainties, piracy, terrorism, visa issues or protests.

Furthermore, the Company’s estimated exploration costs are subject to a number of assumptions that may not

materialise. Any such inability to explore appraise or develop petroleum operations or non-materialisation of

assumptions regarding exploration costs, may have a material adverse effect on Company’s growth ambitions, future

business and revenue, operating results, financial condition and cash flow.

The Company is exposed to risks relating to unionised labour and general labour interruptions.

Whilst the Company generally enjoys good labour relations with its employees, strikes, labour disruptions and other types

of conflicts with employees including those of the Company’s independent contractors or their unions may occur at the

Company’s operations. Labour disruptions may be used not only for reasons specific to the Company’s business, but also

to advocate labour, political or social goals. Any such disruptions or delays in the Company’s business activities may result

in increased operational costs or decreased revenues from delayed or decreased (or zero) production and significant

budget overruns. If such disruptions are material, they could materially adversely affect the Company’s business, results

of operations, cash flow and financial condition.

The Company is subject to third party risk in terms of operators and partners.

Where the Company is not the operator of a license, although it may have consultation rights or the right to withhold

consent in relation to significant operational matters (depending on the level of the Company’s interest in such license),

it has limited control over management of its assets and mismanagement by the operator or disagreements with the

operator as to the most appropriate course of action may result in significant delays, losses or increased costs to the

Company.

The terms of the relevant operating agreements generally impose standards and requirements in relation to the

operator’s activities. However, there can be no assurance that such operators will observe such standards or

requirements and this could result in a breach of the relevant operating agreement.

There is a risk that other partners with interests in the Company’s Licenses may not be able to fund or may elect not to

participate in, or consent to, certain activities relating to those Licenses which require that party’s consent, including but

not limited to, decisions relating to drilling programmes, such as the number, identity and sequencing of wells, appraisal

and development decisions, decisions relating to production and also any decision to not drill at all (e.g. “drill or drop”

decisions). In these circumstances, it may not be possible for such activities to be undertaken by the Company alone or in

conjunction with other participants at the desired time or sequence or at all. Inversely, decisions by the other partners to

engage in certain activities as aforesaid, may also in the circumstances be contrary to the Company’s voting not to

engage in or commence such activities and may imply that the Company will be bound to incur its share of costs in

relation thereto, which may become signicant.

Other participants in the Company’s Licenses may default on their obligations to fund capital or other funding obligations

in relation to the assets. In such circumstances, the Company may be required under the terms of the relevant operating

24

agreement or otherwise to contribute all or part of such funding shortfall itself. The Company may not have the resources

to meet these obligations.

Any disagreement, absence of consent, delay, opposition, breach of agreement, or inability to undertake activities or

failure to provide funding of the kind identified above could materially adversely affect the Company’s business,

prospects, financial condition, cash flow and results of operation.

The Company is exposed to losses on its operated assets.

The Company is operator for several of its licenses. Although the operatorship is performed based on a “no gain, no loss”

principle, the partners in the respective licenses are provided with audit rights and other rights that may ultimately

inflict losses on the Company as an operator should the Company be found not to have managed the operatorship in

compliance with relevant requirements. In the event the Company incurs such losses, this could have a material adverse

effect on the Company’s financial position, cash flow and results of operation.

The Company is subject to risks relating to capacity constraints and cost inflation in the service sector.

The Company is, as other exploration and production companies, relying upon services provided by contractors and other

companies to carry out its operations. As there are numerous material projects to be carried out on the Norwegian

Continental Shelf in the years to come, there is a continuing risk for capacity constraints and cost inflation in the service

sector. If the Company is unable to obtain the services necessary to carry out its current and planned exploration and

development projects, or if any of the Company’s contractors are unable or unwilling to carry out its services as planned,

the Company’s projects may suffer from delays and a subsequent decrease in net production revenue which may

materially adversely affect the Company’s business operating, cash flow results and financial condition.

The Company’s future growth and performance depend on a number of factors, which outcome cannot be

guaranteed.

The Company’s future growth and performance will partly depend on its ability to manage growth effectively, including,

but not limited to its ability to integrate the business of Marathon Norway, adequately manage the number of employees,

technical solutions including IT systems and software, operational efficiency in the “new” Company’s organiations in

Trondheim, Stavanger and Oslo respectively. The Company’s failure to successfully grow its operations, and/or to handle

such growth, could materially adversely affect its business, operating results, cash flow and financial condition.

The Company may not have access to necessary infrastructure for the transportation of oil and gas.

The Company is dependent on capacity to transport and sell oil and gas. The Company, or the license group in which the

Company holds an interest, may need to rely on access to third party infrastructure to be able to transport produced oil

and gas, e.g. by depending on obtaining approval for construction of pipelines in close proximity of or crossing third

party’s infrastructure or being able to acquire the necessary capacity to transport gas. There can be no assurance that

the Company will be able to get access to necessary infrastructure at an economically justifiable cost or access necessary

infrastructure at all. If such access is unavailable or unavailable at an economically justifiable cost, the Company’s

income relating to the sale of oil and gas may be reduced which again may materially adversely affect the Company’s

business, operating results, cash flow and financial condition.

The Company faces risks related to decommissioning activities and related costs.

There are significant uncertainties relating to the estimated costs for decommissioning of the Company’s current licenses

including the schedule for removal of each installation. No assurance can be given that the anticipated costs and time of

removal are correct and any deviation from such estimates may have a material adverse effect on the Company’s

business, operating results, cash flow and financial condition. Also, the Company is jointly and severally liable for

decommissioning costs together with the other licensees of each license. Hence, if one or more of the other licensees fail

to cover their share of the decommissioning costs, the Company can be held liable for such licensee’s share of

decommissioning costs. Furthermore, under the Norwegian Petroleum Act, a licensee assigning its interest in a license

remains secondarily liable for decommissioning costs related to facilities existing at the time of assignment in the event

that the decommissioning costs are not covered by the current licensees. Any significant increase in decommissioning

costs relating to the Company’s current or previous licenses may materially and adversely affect the Company’s business,

financial condition, cash flow and results of operation.

The Company is exposed to political, regulatory and unrest risks.

The Company is conducting exploration and development activities in Norway and is dependent on receipt of government

approvals and permits to develop its assets. The Company is qualified to conduct its operations on the Norwegian

Continental Shelf (the “NCS”), however, there is no assurance that future political conditions in Norway will not result in

the government adopting new or different policies and regulations on exploration, development, operation and ownership

25

of oil and gas, environmental protection, and labour relations. The Company may be unable to obtain or renew required

drilling rights, licenses, permits and other authorisations and these may also be suspended, terminated or revoked prior

to their expiration. This may affect the Company‘s ability to undertake exploration and development activities in respect

of present and future assets, as well as its ability to raise funds for such activities. Also, there can be no assurance that

the Company’s Licenses granted by the MPE will be extended or not be revoked in the future and there is also a risk that

the MPE stipulates conditions for any such extension or for not revoking any licenses. Lack of governmental approvals or

permits or delays in receiving such approval may delay the Company‘s operations, increase its costs and liabilities or

affect the status of the Company‘s contractual arrangements or its ability to meet its contractual obligations. Any of the

above factors may have a material adverse effect on the Company’s business, results of operation, cash flow and

financial conditions.

The Company is vulnerable to adverse market perception.

The Company is vulnerable to adverse market perception as it must display a high level of integrity and maintain the trust

and confidence of investors, license partners, public authorities and counterparties. Any mismanagement, fraud or failure

to satisfy fiduciary or regulatory responsibilities, allegations of such activities, or negative publicity resulting from such

other activities, or the association of any of the above with the Company could materially adversely affect the Company’s

reputation and the value of its brand, as well as its business, operating results, cash flow and financial position.

The Company may be subject to liability under environmental laws and regulations.

All phases of the oil and gas business present environmental risks and hazards and are subject to environmental

regulation pursuant to a variety of international conventions and state and municipal laws and regulations. Environmental

legislation provides for, among other things, restrictions and prohibitions on spills, and releases or emissions of various

substances produced in association with oil and gas operations. The legislation also requires that wells and facility sites

are operated, maintained, abandoned, and reclaimed to the satisfaction of applicable regulatory authorities. Many

participants in the oil and gas industry are subject to legislation in relation to the emission of carbon dioxide, methane,

nitrous oxide and other so-called greenhouse gases. Compliance with such legislation can require significant expenditures

and a breach may result in the imposition of fines and penalties, some of which may be material, in addition to loss of

reputation. Environmental legislation is evolving in a manner expected to result in stricter standards and enforcement,

larger fines and liability, and potentially increased capital expenditures and operating costs. The discharge of oil, gas or

other pollutants into the air, soil or water may give rise to material liabilities to foreign governments and third parties

and may require the Company to incur material costs to remedy such discharge. No assurance can be given that

environmental laws will not result in a curtailment or shut down of production or a material increase in the costs of

production, development or exploration activities or otherwise materially adversely affect the Company’s financial

condition, results of operations, cash flow, financial condition or prospects.

Furthermore, environmental concerns relating to the oil and gas industry’s operating practices are expected to

increasingly influence government regulation and consumption patterns which favour cleaner burning fuels such as gas.

Future compliance with existing emissions legislation or any future emissions legislation could adversely affect the

Company’s profitability. Future legislative initiatives designed to reduce the consumption of hydrocarbons could also have

an impact on the ability of the Company to market its oil and gas and/or the prices which the Company is able to obtain,

which in turn may adversely affect the Company’s financial condition, results of operations, cash flow, financial condition

or prospects.

The Company has been operating in the oil and gas business for several years. Even though the Company are not aware of

any liabilities related to current or historical operations relating to its business, the Company may potentially be subject

to various liabilities such as pollution and environmental liabilities related to its business or the business of Marathon

Norway.

The Company’s insurance may not provide sufficient funds to protect the Company from liabilities that could

result from its operations.

Oil and gas exploration, development, and production operations are subject to all the risks and hazards typically

associated with such operations, including, but not limited to hazards such as fire, explosion, blowouts, and oil spills,

each of which could result in substantial damage to oil and gas wells, production facilities, other property, and the

environment or in personal injury, in addition to business interruption. The Company maintains a number of separate

insurance policies to protect its core businesses against loss and/or liability to third parties. Risks insured against

generally include general liability, workers’ compensation and employee liability, professional indemnity and material

damage. However, in accordance with industry practice and as a result of the Company’s assessment of its needed

insurance programme profile from time to time, the Company is not fully insured against all of these risks (the Company

has for example currently not taken out business interruption insurance).Furthermore, not all mentioned risks are

insurable, or only insurable at a disproportionately high cost. Although the Company maintains liability insurance in an

amount that it considers adequate and consistent with industry standard, the nature of these risks is such that liabilities

26

could materially exceed policy limits or not be insured at all, in which event the Company could incur significant costs

that could have adverse effect on its financial condition, results of operation and cash flow. Any uninsured loss or

liabilities, or any loss and liabilities exceeding the insured limits, may adversely affect the Company’s business.

Availability of drilling equipment and other required equipment and access restrictions may affect the Company’s

operations.

Oil and gas exploration and development activities are dependent on the availability of specialised equipment, including,

but not limited to drilling and related equipment in the particular areas where such activities will be conducted. From

time to time the demand for such limited equipment may be high or access restrictions will affect the availability and

cost of such equipment to the Company and from time to time delays exploration and development activities. Also, to the

extent the Company is not the operator of its oil and gas assets, the Company will be dependent on such operators for the

timing of activities related to such assets and will be largely unable to direct or control the activities of the operators. If

any of these risks materialize, they may have a material adverse effect on the Company’s business, results of operations,

cash flow or financial condition.

The Company’s oil and gas production could vary significantly from reported reserves and resources.

The Company’s reserve evaluations have been prepared in accordance with existing guidelines. The reserves and

resources of the Company are carried out on an annual basis by an independent third party. These evaluations include a

number of assumptions relating to factors such as initial production rates, recovery rates, production decline rates,

ultimate recovery of reserves, timing and amount of capital expenditures, marketability of production, future prices of

oil and gas, operating costs, and royalties and other government levies that may be imposed over the producing life of

the reserves and resources. Actual production and cash flows derived therefrom will vary from these evaluations, and

such variations could be material. Hence, although the Company has an understanding of the life expectancy of each of

its assets, the life of an asset may be shorter than anticipated. Among other things, evaluations are based, in part, on the

assumed success of exploration activities intended to be undertaken in future years. The reserves, resources and

estimated cash flows to be derived therefrom contained in such evaluations will be reduced to the extent that such

exploration activities do not achieve the level of success assumed in the evaluations, and such reductions may have a

material adverse effect on the Company’s business, results of operations, cash flow and financial condition. Accordingly,

investors should be cautious in reviewing reserve and resources figures included in this Prospectus.

Accounting policies may result in non-cash charges and write downs considered unfavourably by the market.

IFRS requires that management apply certain accounting policies and make certain estimates and assumptions, which

affect reported amounts in the consolidated financial statements of the Company. The accounting policies may result in

non-cash charges to net income and material write downs of net assets in the financial statements. Such non-cash charges

and write downs may be viewed unfavourably by the market and result in an inability to borrow funds and/or may result

in a significant decline in the trading price of the Company’s shares.

The Company may not be successful in attracting and retaining sufficient skilled employees.

The successful development and performance of the Company’s business depends on its ability to attract and retain

skilled professionals with appropriate experience and expertise. Attracting and retaining additional key personnel will

assist in the expansion of the Company’s business and the loss of key employees could also have a material negative

effect on the Company. The Company faces significant competition for skilled personnel and there can be no assurance

that the Company will have access to sufficient skilled and experienced professionals. This may be particular evident for

the Company’s offshore activities, where the location of the Company’s production facilities and shift work arrangements

associated with offshore work, may negatively affect the Company’s ability to attract the necessary employment

resources, as skilled personnel may be reluctant to take on such assignments.

There is no assurance that the Company will successfully attract and retain personnel required to continue to expand its

business and to successfully execute its business strategy and failure to attract or retain employees could result in the

inability to maintain the appropriate technological standard or take advantage of new opportunities that may arise, which

may in turn lead to a subsequent decline in competitiveness and could materially adversely affect the Company’s

business, operating results, cash flow and financial condition.

The Company faces the risk of litigation or other proceedings in relation to its business.

The Company faces the risk of litigation and other proceedings in relation to its business. The outcome of any litigation

may expose the Company to unexpected costs and losses, reputational and other non-financial consequences and

diverting management attention, which may in turn materially adversely affect the Company’s business, operating

results, cash flow and financial condition.

27

The Company may experience conflicts of interest.

There are potential conflicts of interest to which the directors, officers and principal shareholders of the Company will be

subject to in connection with the operations of the Company. Some of the directors, officers and principal shareholders

may become engaged in other oil and gas interests on their own behalf and on behalf of other companies resulting in a

conflict of interest and situations may arise where the directors and officers will be in direct competition with the

Company. Such conflicts, if any, will be subject to the procedures and remedies under Norwegian company law, but may

not prevent adverse effects for the Company with regard to such conflicts. The directors, officers and principal

shareholders of the Company may not devote their time on a full-time basis to the affairs of the Company as a result of

such conflicts. See section 16 “Related Party Transactions” for further information about recent transactions with related

parties. Certain Directors of the Board and Senior Management of the Company own collectively, directly and indirectly, a

significant part of the outstanding share capital of the Company, and will therefore have the possibility to influence the

decision-making in the Company.

2.3 Risks Relating to the Transaction

There are several risks relating to the implementation of the Transaction.

The successful completion of the Transaction is subject to several conditions including, but not limited to (i) the

European Commission having issued a decision under Article 6(1)(b) or 6(2) of Council Regulation (EC) No. 139/2004 (or

being deemed to have done so under Article 10(6) of the regulation) on terms satisfactory to the Company, (ii) obtaining

approval by the MPE pursuant to section 3-7 and 10-12 of the Petroleum Act of the Transaction and the proposed transfer

of all of assets and obligations of Marathon Norway into the Company on terms reasonably satisfactory to both parties

under the SPA with Marathon Oil Corporation dated 2 June 2014 (as further described in section 7 (the “Transaction”),

(iii) approval from the Norwegian Ministry of Finance and (iv) that no material adverse effect have occurred between

signing of the SPA and the completion date. Even though the Company will use all reasonable endeavours to procure

satisfaction of the completion conditions, there can be no assurance that such conditions will be satisfied and that the

Transaction will be completed.

If the conditions to the completion of the Transaction are not satisfied for any reason, the Company may be subject to

several risks including no realisation of any of the expected benefits of having completed the Transaction and a negative

perception by the stock market, and consequently resulting in a material decline in the market price for the Shares.

The Company may not be able to successfully integrate Marathon Norway’s business.

The combination of Marathon Norway’s business and the business of the Company involves the integration of two

companies that have previously operated independently, a challenging process which involves significant risk. There can

be no assurance that the combined entity will not encounter difficulties in integrating the respective organisations and

operations or that the Company will actually achieve anticipated synergies or other benefits from the integration. Any

delays and unexpected costs incurred in the Integration process or failure to achieve the advantages contemplated by the

integration may adversely affect the Company’s business, operating result, cash flow and financial condition.

One of the key challenges is the integration of the IT-systems in the two companies, both with respect to hardware and

software. The business is dependent of a well-functioning It-system for safe and effective operations, with more than 200

different applications in daily use. There are some differences in the applications used in Marathon Norway and in the

Company, and successful adoption to a common system without disturbing on-going business operations is challenging. If

the Company does not succeed in the integration of the IT-systems in the two companies, this may adversely affect the

Company’s business, operating result and financial condition.

The Company will encounter separation challenges as a consequence of the Transaction.

The Company will encounter risks connected with the separation of Marathon Norway from Marathon Oil Corporation.

Marathon Oil Corporation currently performs certain functions for Marathon Norway, including, but not limited to,

marketing and sale of oil and gas, IT services and accounts and payments services. The separation of such functions will

not be completed at closing of the Transaction. As a result, Marathon Norway and the Company will depend on certain

services and cooperation from Marathon Oil Corporation for some time after closing of the Transaction to facilitate a

smooth transition and complete separation. Under the SPA, Marathon Oil Corporation and the Company have agreed that

Marathon Oil Corporation shall provide certain services to the Company/Marathon Norway in a transitional period. Lack of

cooperation, failure by Marathon Oil Corporation to provide such services and/or unforeseen delays or complications in

the transition and separation process could increase integration costs and could adversely affect the Company’s business,

operating result and financial condition.

28

The Company may not be able to transfer the contracts currently held by Marathon Norway or transfer these on

the same terms.

Some of Marathon Norway’s contracts contain consent requirements triggered by the Transaction. The Company may not

be able to obtain such consent, or may be unable to renew the existing contracts entered into by Marathon Norway or

establish new contracts on terms as favourable as those contracts currently held. Further, the Company may incur

transfer fees under certain contracts as a result of the Transaction. The Company’s business, operating results, cash flow

and financial condition may be adversely affected due to such transfer fees or in case of loss of contracts or if it fails to

continue the current contracts or establish new contracts on similar terms or if substantial fees are incurred as a result of

the Transaction.

The Company is subject to potential loss of key Marathon employees as a result of the Transaction.

Companies subject to acquisitions are generally subject to risk of employees leaving the acquired company and the

Company risks experiencing this with employees of Marathon Norway in connection with the Transaction. As the

organisations of Marathon Norway and the Company are highly complementary, it will be challenging for the Company to

lose a significant number of employees in Marathon Norway. Although the Company currently does not have indications

that this situation will arise, the loss of key employees in Marathon Norway could have an adverse effect on the

Company’s business, results of operation and financial position.

The unaudited pro forma financial information is not necessarily indicative of the Company’s future results.

This Prospectus contains unaudited pro forma financial information. The unaudited pro forma financial information is

based on preliminary estimates and assumptions, which the Company believes to be reasonable, and is being furnished

solely for illustrative purposes and is not necessarily indicative of the Company’s business, operating results and financial

condition. As a result, an investor should not place undue reliance on the unaudited pro forma financial information

presented in this Prospectus.

The Company may fail to successfully implement synergies from consolidated tax positions.

There can be no assurance that the Company will be able to achieve all of the synergies from consolidated tax position

that it expects to realise from the Integration. Realisation of tax synergies requires that third parties under Marathon

Norway’s contractual arrangements approve transfer of the relevant arrangement to the Company. Although the Company

does not expect any significant difficulties or delays in this respect, no assurance that such third parties, in the extent

required, will give such consent in time. The Company’s failure to realise expected synergies from consolidated tax

positions may materially adversely affect its business, operating results, cash flow and financial condition.

The Company may discover contingent or other liabilities within Marathon Norway.

Marathon Oil Corporation has in the SPA given certain representations, warranties and indemnities regarding Marathon

Norway in the Company’s favour and the Company has conducted a limited due diligence in connection with the

Transaction. The Company may nevertheless discover issues relating to Marathon Norway’s business that may have a

material adverse effect on the Company’s business, results of operations, cash flow and financial condition.

The Company’s ability to recover any amounts in respect of those representations, warranties and indemnities, as well as

certain covenants set out in the SPA, is subject to certain minimum thresholds, deductibles and time limitations, as well

as to a maximum amount. The Company may incur losses in excess of such maximum amount and the matters giving rise

to the losses may not be recoverable against the warranties or indemnities or at all and this may have a material adverse

effect on the Company’s business, results of operations and financial condition.

Pursuant to the SPA, the Company shall be liable for the decommissioning obligations and certain potential environmental

liabilities of Marathon Norway and its subsidiary. As described under “Risks related to decommissioning activities and

related costs” above, there are significant uncertainties relating to the magnitude of the costs for decommissioning.

Decommissioning costs and environmental liabilities may have a material adverse effect on the Company’s business,

financial condition, cash flow and results of operation.

2.4 Risks Relating to Marathon Norway’s Business in Particular

Unexpected shutdowns may occur at the Alvheim FPSO.

Even though the reliability of the Alvheim FPSO is above 98% (excluding planned down-time), the Company will especially

be sensitive to any shutdown or other technical issues on the Alvheim FPSO due to the fact that all of the Alvheim Area

fields are produced via the vessel. A shutdown or other technical issues on the Alvheim FPSO or other problems relating

to the Company’s production of oil and gas causing a reduction in production levels may materially adversely affect the

Company’s profitability following completion of the Transaction, both as a result of the increase in costs which normally

result from such delays and through claims for compensation from third parties. Delays may also result in cancellation of

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contracts, which may in turn adversely affect the Company’s business, operating results, cash flow and financial

condition.

The Company is exposed to risks relating to capacity booking for transport of gas.

Marathon Norway does not hold any future booking capacity in Gassled nor any long term National Transmission System

(“NTS”) entry capacity to bring gas into NTS through aggregated system entry points such as at St. Fergus in Scotland

through the SAGE pipeline system. Hence, there can be no assurance that the “new” Company will be able to purchase

the necessary capacity to transport gas in the future at all or on favourable terms. Any lack of capacity may reduce the

Company’s income relating to gas sales which again may materially adversely affect the Company’s business, operating

results, cash flow and financial condition.

2.5 Financial Risks

The Company may require additional capital in the future, which may not be available on favourable terms, or at

all.

The Company’s future capital requirements depend on many factors including an effective integration of the business of

Marathon Norway and on whether the Company’s cash flow from operations are sufficient to fund the Company’s business

plans. The Company may need additional funds in the longer term in order to further develop exploration and

development programmes or to acquire assets or shares of other companies. In particular, the Ivar Aasen development

project and the early stage Johan Sverdrup development project require significant capital expenditures in the years to

come. Even though the Company has taken measures to ensure a solid financial basis for the development projects, the

Company cannot assure that it will be able to generate or obtain sufficient funds to finance the projects. In particular,

given the extensive scope of the projects, any unforeseen circumstances or actions to be dealt with that is not accounted

for, may result in a substantial gap between estimated and actual costs. Thus, the actual costs necessary to carry out the

projects may be considerably higher than currently estimated. These investments along with the Company’s on-going

operations may be financed partially or wholly with debt, which may increase the Company’s debt levels above industry

standards.

The Company may also have to manage its businesses in a certain way to service its debt and other financial obligations.

Should the financing of the Company not be sufficient to meet its financing needs, the Company may, among other

things, be forced to reduce or delay capital expenditures or research and development expenditures or sell assets or

businesses at unanticipated times and/or at unfavourable prices or other terms, or to seek additional equity capital or to

restructure or refinance its debt. There can be no assurance that such measures would be successful or would be

adequate to meet debt and other obligations as they come due, or would not result in the Company being placed in a less

competitive position.

The general financial market conditions, stock exchange climate, interest level, the investors’ interest in the Company,

the share price of the Company, as well as a number of other factors beyond the Company’s control, may restrict the

Company’s ability to raise necessary funds for future growth and/or investments. Thus, additional funding may not be

available to the Company or, if available, may not be available on acceptable terms. If the Company is unable to raise

additional funds as needed, the scope of its operations may be reduced and, as a result, the Company may be unable to

fulfil its long-term development programme, or meet its contractual obligations under its contracts which may ultimately

be withdrawn or terminated for non-compliance. The Company may also have to forfeit or forego various opportunities,

curtail its growth and/or reduce its assets. This could maerially adversely affect the Company’s business, prospects,

financial condition, results of operations and cash flows, and on the Company’s ability to fund the development of its

business.

The Company is exposed to interest rate and liquidity risk associated with its borrowing portfolio and fluctuations

in underlying interest rates.

The Company’s long-term debt is primarily based on floating interest rates. An increase in interest rates can therefore

materially adversely affect the Company’s cash flows, operating results and financial condition and make it difficult to

service its financial obligations. The Company has, and will in the future have, covenants related to its financial

commitments. Failure to comply with financial obligations, financial covenants and other covenants may have several

material adverse consequences, including the need to refinance, restructure, or dispose of certain parts of, the

Company’s businesses in order to fulfil the Company’s financial obligations and there can be no assurances that the

Company in such event will be able to fulfil its financial obligations.

The Company is subject to risks relating to pension schemes.

The Company has a defined benefit pension scheme as further described in Section 6.12 (“Business Overview—

Organisation”). Further, Marathon Norway has a defined benefit pension scheme with a calculated underfunding of

approximately NOK 95 million. Although said underfunding was taken into account when calculating the purchase price

30

for Marathon Norway, there can be no assurance that the Company’s and Marathon Norway’s defined benefit schemes will

not be underfunded in the future and such underfunding may have a material adverse effect on the Company’s business,

operating results, cash flow and financial condition.

Changes in foreign exchange rates may affect the Company’s results of operations and financial position.

The Company is exposed to market fluctuations in foreign exchange rates due to the fact that company report Profit &

Loss and Balance sheet in NOK. Revenues are in USD for oil and in GBP for gas, while operational costs and investment are

in several other currencies than NOK. Revenues are relatively small compared to investment at the moment. The gap

between investment and low revenues is financed with loan and equity. The Company has not entered into any long term

hedging of foreign exchange risk or other types of derivates and significant fluctuations in exchange rates between USD

and NOK may materially adversely affect the reported results.

The Company is exposed to risk of counterparties being unable to fulfil their financial obligations.

The Company’s partners and counterparties consist of a diverse base with no single material source of credit risk.

However, a general downturn in financial markets and economic activity may result in a higher volume of late payments

and outstanding receivables, which may in turn adversely affect the Company’s business, operating results, cash flows

and financial condition.

2.6 Risks Relating to the Shares

The market value of the Shares may fluctuate significantly and may not reflect the underlying asset value of the

Company.

The market value of the Shares can fluctuate significantly and may not always reflect the underlying asset value of the

Company. A number of factors outside the control of the Company may have an impact on its performance and the price

of the Shares. Such factors include but are not limited to a change in market sentiment regarding the Shares and the

Company, the operating and share price performance of other companies in the industry and markets in which the

Company operates, speculation about the Company’s business in the press, media or investment community, changes to

the Company’s profit estimates, the publication of research reports by analysts and general market conditions. . If any of

these factors actually occurs, this may have a material adverse effect on the pricing of the Shares.

The Company has not paid dividends in the past and the Company may not become in a position to pay dividends

in the future.

The ability of the Company to pay dividends on the Shares is dependent upon the availability of distributable reserves

and, therefore, among other things, which again is dependent on factors which to a greater or lesser extent are beyond

the Company’s control, such as but not limited to capital expenditures, debt service requirements, the price of oil and

gas, the profitability of the Company and general market and economic conditions. Accordingly, it is possible that the

shareholders of the Company will not receive a return on their investment in the Shares through the payment of

dividends.

The ability to bring an action against the Company may be limited under Norwegian law.

The Company is a public limited liability company incorporated under the laws of Norway. The rights of holders of Shares

are governed by Norwegian law and by the Articles. These rights might differ from the rights of shareholders in other

jurisdictions. In particular, Norwegian law limits the circumstances under which shareholders of Norwegian companies

may bring derivative actions. Under Norwegian law, any action brought by the Company in respect of wrongful acts

committed against the Company takes precedent over actions brought by shareholders in respect of such acts. In

addition, it may be difficult to prevail in a claim against the Company under, or to enforce liabilities predicated upon,

securities laws in other jurisdictions.

Any future share issues and sales of Shares by major shareholders may have a material adverse effect on the

market price of the Shares.

The Company has resolved to carry out the Rights Issue, and may decide to offer additional Shares in the future. An

additional offering or a significant sale of Shares by any of the Company’s major shareholders could have a material

adverse effect on the market price of the outstanding Shares.

Issuances of Shares may have a dilutive effect on the ownership interests of the shareholders of the Company at

that time.

The Company may require additional capital in the future to finance its business activities and growth plans. The issuance

of Shares in order to raise such additional capital, or as means of honouring options or warrants, may have a dilutive

effect on the ownership interests of the Shareholders of the Company at that time.

31

U.S. holders of Shares that are not “qualified institutional buyers” will not be able to exercise the Subscription

Rights.

U.S. holders of the Shares will be granted Subscription Rights, but will not be able to exercise the Subscription Rights to

acquire Offer Shares unless such U.S. holders are “qualified institutional buyers” (as defined in Rule 144A of the U.S.

Securities Act) (“QIB”s). A U.S. holder that is not a QIB is an Ineligible Shareholder (as defined in section 20.7).

Subscription Rights granted to Ineligible Shareholders will be sold in accordance with the procedures set forth in section

20.7. There is no guarantee that the Subscription Rights will have any value or that the Company will be able to sell these

Subscription Rights. Therefore, U.S. holders of Shares, or other Shareholders resident in jurisdictions subject to similar

restrictions, that are not able to exercise the Subscription Rights may not receive the economic benefit of such rights. In

addition, their proportional ownership interests in the Company will be diluted.

It may be difficult for investors based in the United States to enforce civil liabilities predicated on U.S. securities

laws against the Company or the Company’s directors and executive officers.

The Company is organised under the laws of Norway and the directors and executive officers are residents in Norway and

other non-U.S. jurisdictions. It may be difficult for investors in the U.S. to effect service of process within the U.S. upon

the Company or the Company’s directors and executive officers and to enforce against the Company or its directors and

executive officers judgments obtained in U.S. courts predicated on the civil liability provisions of U.S. federal securities

laws.

Holders of Shares that are registered in a nominee account may not be able to exercise voting rights as readily as

other Shareholders.

Beneficial owners of Shares that are registered in a nominee account (e.g. through brokers, dealers or other third parties)

may not be able to vote such shares unless their ownership is re-registered in their names with the Norwegian Central

Securities Depository (VPS) prior to the Company’s general meetings. There can be no assurance that beneficial owners of

the Company’s shares will receive the notice of a general meeting in time to instruct their nominees to either effect a re-

registration of their shares or otherwise vote their shares in the manner desired by such beneficial owners.

Following completion of the Rights Issue, substantial share ownership will remain concentrated in the hands of one

Shareholder, and future sales of Shares by such Shareholder could have a material adverse effect on the market

price of the Shares.

Following completion of the Rights issue, the largest Shareholder of the Company, Aker Capital AS, will retain

approximately 49.99% of the total share capital of the Company. Thus, Aker Capital AS will have the ability to

significantly influence the outcome of matters submitted for the vote of shareholders of the Company, including but not

limited to the election of members of the nomination committee and consequently the members of the Board of

Directors. The interest of the largest shareholder may not be aligned with the interest of the other shareholders.

Furthermore, any future sales of Shares by such Shareholder could have a material adverse effect on the market price of

the Shares.

The Subscription Price is not an indication that the Offer Shares can be sold for an amount equal to the

Subscription Price.

The Subscription Price of the Offer Shares has been determined by the Company in consultation with Aker Capital AS and

the Underwriters. The Subscription Price is not an indication that any of the Offer Shares could be sold for an amount

equal to the offering price or for any amount.

2.7 Risks Relating to the Rights Issue

Existing Shareholders who do not participate in the Rights Issue may experience significant dilution in their

shareholding.

Subscription Rights that are not exercised by the end of the Subscription Period will have no value and will automatically

lapse without compensation to the holder. To the extent that an Existing Shareholder does not exercise its Subscription

Rights prior to the expiry of the Subscription Period, whether by choice or due to a failure to comply with procedures set

forth in Section 20 “Terms of the Rights Issue”, or to the extent that an Existing Shareholder is not permitted to subscribe

for Offer Shares as further described in Section 21 “Selling and Transfer Restrictions”, such Existing Shareholder’s

proportionate ownership and voting interests in the Company after the completion of the Rights Issue will be diluted.

Even if an Existing Shareholder elects to sell its unexercised Subscription Rights, or such Subscription Rights are sold on its

behalf, the consideration it receives on the trading market for the Subscription Rights may not reflect the immediate

dilution in its shareholding as a result of the completion of the Rights Issue.

32

An active trading market in Subscription Rights may not develop on the Oslo Stock Exchange and/or the market

value of the Subscription Rights may fluctuate.

An active trading market in the Subscription Rights may not develop on the Oslo Stock Exchange. In addition, because the

trading price of the Subscription Rights depends on the trading price of the Shares, the price of the Subscription Rights

may be volatile and subject to the same risks as described for the Shares elsewhere in this Prospectus. The existing

volatility of the Shares may also have an effect on the volatility of the Subscription Rights.

The sale of Subscription Rights by or on behalf of Existing Shareholders may result in a reduction in the market

price of the Subscription Rights and the Shares and increased volatility in the Shares.

Certain Existing Shareholders may be unable to take up and exercise their Subscription Rights as a matter of applicable

law. The Subscription Rights of such Existing Shareholders, with the exception of Subscription Rights held through

financial intermediaries, may be sold on their behalf in the market by the Joint Global Coordinators pursuant to

instructions from the Company, as further described in Section 20 “Terms of the Rights Issue—Subscription Rights”, but no

assurance can be given as to whether such sales may actually take place or as to the price that may be achieved. The sale

of Subscription Rights by or on behalf of holders of such rights and the sale of Subscription Rights by other Shareholders

could cause significant downward pressure on, and may result in a substantial reduction in, the price of the Subscription

Rights and the Shares.

If the Rights Issue is not completed, the Subscription Rights will no longer be of value.

The Rights Issue may be unsuccessful if the conditions for the Underwriting Agreement are not met or waived or if the

Underwriting Agreement is terminated for any reason and the Offer Shares are not all subscribed for. For a description of

the Underwriting Agreement, see Section 20.18 “Terms of the Rights Issue—The Underwriting”.

If the Rights Issue is not completed, all Subscription Rights will lapse without value, subscriptions for, and allocations of,

Offer Shares that have been made will be disregarded and any subscription payments made will be returned without

interest or any other compensation. The lapsing of Subscription Rights would be without prejudice to the validity of any

trades in Subscription Rights, and investors would not receive any refund or compensation with respect to Subscription

Rights purchased in the market.

The Rights Issue is not conditional upon completion of the Transaction

The Rights Issue is not conditional upon a successful completion of the Transaction. There can be no assurance that the

Transaction will be completed, see section 2.3 “Risks Relating to the Transaction”. Investors in the Rights Issue will

however not be entitled to recall or reclaim a subscription for Offer Shares in the event the Transaction is not completed.

Shareholders outside of Norway are subject to exchange rate risk.

The Subscription Rights and the Offer Shares are priced in NOK, and any future payments of dividends on the Offer Shares

are expected to be denominated in NOK. Accordingly, investors outside of Norway are subject to adverse movements in

NOK against their local currency as the foreign currency equivalent of any dividends paid on the Offer Shares or received

in connection with any sale of the Offer Shares could be adversely affected.

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3. RESPONSIBILITY STATEMENT

The Board of Directors of Det norske oljeselskap ASA accepts responsibility for the information contained in this

Prospectus. The members of the Board of Directors confirm that, having taken all reasonable care to ensure that such is

the case, the information contained in this Prospectus is, to the best of their knowledge, in accordance with the facts

and contains no omissions likely to affect its import.

Oslo, 9 July 2014

The Board of Directors of

Det norske oljeselskap ASA

Sverre Skogen (Chairman)

Anne Marie Cannon (Deputy Chair)

Tom Røtjer

Kjell Inge Røkke

Kitty Hall (Katherine J. Martin)

Jørgen C. Arentz Rostrup

Gro Kielland

Inge Sundet

Kristin Gjertsen

Gudmund Evju

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4. GENERAL INFORMATION

This Section provides general information on the presentation of financial and other information, as well as the use of

forward-looking statements, in this Prospectus. You should read this information carefully before continuing.

4.1 Cautionary Note Regarding Forward-Looking Statements

This Prospectus includes forward-looking statements (“Forward-looking Statements”) that reflect the Company’s current

views with respect to future events and financial and operational performance; including, but not limited to, statements

relating to the risks specific to the Company's business, future earnings from charter contracts, the ability to distribute

dividends, the solution to contractual disagreements with counterparties, the implementation of strategic initiatives as

well as other statements relating to the Company's future business development and economic performance. These

Forward-looking Statements can be identified by the use of forward-looking terminology; including the terms “assumes”,

“projects”, “forecasts”, “estimates”, “expects”, “anticipates”, “believes”, “plans”, “intends”, “may”, “might”, “will”,

“would”, “can”, “could”, “should” or, in each case, their negative or other variations or comparable terminology. These

Forward-looking Statements are not historical facts. They appear in a number of places throughout this Prospectus;

Section 6 “Business Overview”, Section 8 “Presentation of Marathon Norway”, Section 9 “The Company Following the

Transaction”, Section 10 “Industry Overview” and Section 17 “Dividend and Dividend Policy” and include statements

regarding the Company's intentions, beliefs or current expectations concerning, among other things, goals, objectives,

financial condition and results of operations, liquidity, outlook and prospects, growth, strategies, impact of regulatory

initiatives, capital resources and capital expenditure and dividend targets, and the industry trends and developments in

the markets in which the Company operates.

Prospective investors in the Shares or the Subscription Rights are cautioned that Forward-looking Statements are not

guarantees of future performance and that the Company’s actual financial position, operating results and liquidity, and

the development of the industry in which the Company operates may differ materially from those contained in or

suggested by the Forward-looking Statements contained in this Prospectus. The Company cannot guarantee that the

intentions, beliefs or current expectations that these Forward-looking Statements are based will occur.

By their nature, Forward-looking Statements involve and are subject to known and unknown risks, uncertainties and

assumptions as they relate to events and depend on circumstances that may or may not occur in the future. Because of

these known and unknown risks, uncertainties and assumptions, the outcome may differ materially from those set out in

the Forward-looking Statements. Should one or more of these risks and uncertainties materialise, or should any

underlying assumption prove to be incorrect, the Company’s business, actual financial condition, cash flows or results of

operations could differ materially from that described herein as anticipated, believed, estimated or expected.

The information contained in this Prospectus, including the information set out under Section 2 “Risk Factors”, identifies

additional factors that could affect the Company's financial position, operating results, liquidity and performance.

Prospective investors in the Shares or the Subscription Rights are urged to read all sections of this Prospectus and, in

particular, Section 2 “Risk Factors” for a more complete discussion of the factors that could affect the Company’s future

performance and the industry in which the Company operates when considering an investment in the Shares or the

Subscription Rights.

Except as required according to Section 7-15 of the Norwegian Securities Trading Act, the Company undertakes no

obligation to publicly update or publicly revise any forward-looking statement, whether as a result of new information,

future events or otherwise. All subsequent written and oral Forward-looking Statements attributable to the Company or

to persons acting on the Company’s behalf are expressly qualified in their entirety by the cautionary statements referred

to above and contained elsewhere in this Prospectus.

4.2 Presentation of Industry Data and Other Information

Sources of Industry and Market Data

To the extent not otherwise indicated, the information contained in this Prospectus on the market environment, market

developments, growth rates, market trends, market positions, industry trends, competition in the industry in which the

Company operates and similar information are estimates based on data compiled by professional organisations,

consultants and analysts; in addition to market data from other external and publicly available sources as well as the

Company's knowledge of the markets.

While the Company has compiled, extracted and reproduced such market and other industry data from external sources,

the Company has not independently verified the correctness of such data. Thus, the Company takes no responsibility for

the correctness of such data. The Company cautions prospective investors not to place undue reliance on the above

mentioned data.

35

Although the industry and market data is inherently imprecise, the Company confirms that where information has been

sourced from a third party, such information has been accurately reproduced and that as far as the Company is aware and

is able to ascertain from information published by that third party, no facts have been omitted that would render the

reproduced information inaccurate or misleading. Where information sourced from third parties has been presented, the

source of such information has been identified.

In addition, although the Company believes its internal estimates to be reasonable, such estimates have not been verified

by any independent sources and the Company cannot assure prospective investors as to their accuracy or that a third

party using different methods to assemble, analyse or compute market data would obtain the same results. The Company

does not intend to or assume any obligations to update industry or market data set forth in this Prospectus. Finally,

behaviour, preferences and trends in the marketplace tend to change. As a result, prospective investors should be aware

that data in this Prospectus and estimates based on those data may not be reliable indicators of future results.

Other Information

In this Prospectus, all references to “NOK” are to the lawful currency of Norway, and all references to “U.S. dollar”,

“US$”, “USD”, or “$” are to the lawful currency of the United States of America.

In this Prospectus all references to “EU” are to the European Union and its Member States as of the date of this

Prospectus; all references to “EEA” are to the European Economic Area and its member states as of the date of this

Prospectus; and all references to “US”, “U.S.” or “United States” are to the United States of America.

Certain figures included in this Prospectus have been subject to rounding adjustments. Accordingly, figures shown for the

same category presented in different tables may vary slightly.

36

5. USE OF PROCEEDS; REASONS FOR THE RIGHTS ISSUE

5.1 Background

The Company operates in a capital intensive industry which requires substantial investments in the development phase of

oil and gas fields. Currently, the Company has four fields in production and is participating in several planned and on-

going developments on the Norwegian Continental Shelf, including Gina Krog, Ivar Aasen and Johan Sverdrup. Production

start-up at Ivar Aasen and Johan Sverdrup is expected in fourth quarter 2016 and fourth quarter 2019, respectively, and is

expected to contribute significantly to the Company’s cash flow. In total, the net pre-tax capital expenditure in the

Company’s development program is estimated to NOK 26.2 billion (real 2014 value) for the six-year period 2014 to 2019.

With limited income from producing fields, the capital structure prior to the acquisition of Marathon Norway’s assets was

considered insufficient to carry all cost required to bring the Company’s developments into the production phase.

Together with the planned reserve based lending facility of USD 2.75 billion as further described in section 7.3 “Financing

the Transaction” below, the proposed Rights Issue is an integral part of the Company’s long-term financing plan to meet

these and other commitments, including but not limited to the financing of its contemplated acquisition of Marathon

Norway which is further described in Section 7 “The Transaction”.

5.2 Use of Proceeds

Gross proceeds of the Rights Issue will be NOK 3,002.7 million. The net proceeds of the Rights Issue are expected to be

approximately between NOK 2,960 and NOK 2,975 after deduction of costs and expenses to be borne by the Company,

currently estimated to be in the range of NOK 25 to NOK 40 million. The Joint Bookrunners are entitled to a fee of up to

approximately 1.125% of the gross proceeds of the Rights Offering. The Company intends to use the net proceeds mainly

as a part of the Transaction financing and the proposed overall refinancing of the Company to fund planned and on-going

development projects such as Ivar Aasen and Johan Sverdrup, as well as general corporate purposes.

5.3 Dilution

The table below shows the percentage split of the Company's share capital following the Rights Issue; split by pre-Rights

Issue share capital and the share capital to be issued in the Rights Issue, on the basis that the Rights Issue is fully

subscribed:

Pre-Rights Issue share capital................................................................................................. 69.4%

Rights Issue share capital ..................................................................................................... 30.6%

The Rights Issue will accordingly result in a dilution of Existing Shareholders who do not participate in the Rights Issue of

approximately 30.6%.

37

6. BUSINESS OVERVIEW

This Section provides an overview of the business of the Company as of the date of this Prospectus. The following

discussion contains Forward-looking Statements that reflect the Company's plans and estimates; see Section 4.1 "General

Information—Cautionary Note Regarding Forward-Looking Statements". You should read this Section in conjunction with

the other parts of this Prospectus, in particular Section 2 "Risk Factors" and Section 12 "Operating and Financial Review".

6.1 Introduction

Det norske oljeselskap ASA is an oil and gas company with exploration and production activities on the Norwegian

Continental Shelf (the “NCS”). The Company is listed on the Oslo Stock Exchange under the ticker “DETNOR”. As of the

date of this Prospectus and prior to completion of the Transaction, the Company is primarily an offshore exploration and

development company with a total of 77 licenses (27 as operator) as per 31 March 2014. Please see section 6.6 “License

Portfolio, Reserves and Resources” for further details.

The Company is a public limited company registered and domiciled in Norway. The Company currently holds no wholly or

partly owned subsidiaries except for Sandvika Fjellstue AS, a minor private limited liability company owning the

Company’s conference centre in Sandvika in Verdal, as further described in Section 6.10 “Sandvika Fjellstue AS”.

The Company had 262 employees as of 31 March 2014. The Company has steadily developed a competent and experienced

organisation that has been scaled up over the last years, mainly due to the Ivar Aasen development project where the

Company is operator. Senior Management comprises senior and highly skilled individuals with extensive experience from

the oil and gas industry. Previous management employment includes well-known companies like Statoil, Aker, Saga,

Hydro and ConocoPhillips. The organisation is based in three office locations, namely Trondheim, Oslo and Harstad. The

Company’s registered headquarters is in Trondheim (Føniks, Munkegata 26, 7011 Trondheim). The head office functions

are divided between Oslo and Trondheim.

The Company has reported a total production of 1,629,115 boe in 2013. This corresponds to an average daily production

of 4,463 boepd. The production peaked in June 2013 with an average production of 9,655 barrels per day. In the first

quarter of 2014, the Company produced 260,569 boe. This corresponds to 2,895 boepd. The producing fields are Jette

unit (70%, operator), Atla (20%, partner), Varg (5%, partner) and Jotun unit (7%, partner). The Company also holds an

interest in the Enoch field (2% partner), which has been shut down for a longer period and is expected to resume

production during the summer of 2014.

The Company has taken part in significant discoveries in recent years. Two of these fields will in particular influence the

production growth in the Company over the next years, namely the Ivar Aasen field and the Johan Sverdrup field as

further described in Section 6.4.2 below. The Ivar Aasen development is well underway after the Plan for Development

and Operations (“PDO”) was approved by the Norwegian Parliament in June 2013. First oil is expected in the fourth

quarter 2016. The Company’s share of production is expected to amount to around 16 000 boepd from production start,

and 23 000 boepd at plateau production in 2019. Following this, the Johan Sverdrup field is scheduled to come on stream

in the fourth quarter 2019. The Johan Sverdrup field ranks amongst the largest oil discoveries on the NCS. The concept

selection has been made and Decision Gate 2 (Decision on Continuation) was formally passed by the partners in February

2014. The operator Statoil Petroleum AS has estimated the total field resources to be somewhere in the range of 1,800 to

2,900 million barrels of oil equivalents. Gross plateau production is estimated to between 550,000-650,000 boepd.

In total, the Company has a working interest in eight fields containing reserves. Out of these, four are classified as in

production and four are classified as approved for development. The Company’s total net proven reserves (P90/1P) as of

31 December 2013 is estimated at 48.5 million boe. Total net proven plus probable reserves (P50/2P) are estimated at

65.8 million boe. The Company has acquired its current resource base through exploration.

The Company’s cash and cash equivalents amounted to NOK 821 million as of 31 March 2014. Tax receivables for

disbursement in December 2014 amounted to NOK 1,417 million and tax receivable for disbursement in December 2015

amounted to NOK 148 million. The Company’s equity ratio as of 31 March 2014 was 30.6%. Discoveries and fields under

development contributed to a total asset balance of NOK 10,504 million as of 31 March 2014.

6.2 Strengths and Strategies

Vision and Strategy

The Company has evolved from being an exploration company to becoming a full-fledged oil company with activities

within exploration, development and production. From the establishment of Pertra, through the merger with NOIL (the

Norwegian business of DNO ASA) and Aker Exploration, the Company has grown its’ resource base and organisation to a

sizeable player. The development of the Ivar Aasen and the Johan Sverdrup field will further grow the company and bring

it into a new league with regards to production volumes after 2019. The Company’s ambition is to become the largest

38

independent oil & gas company on the NCS in terms of activity and production, and post 2020 the Company will be

significantly closer to achieving this goal.

Exploration has been the Company’s core activity since its inception; over the last 10 years, it has been one of the largest

mineral companies with respect to operated exploration drilling activity on the NCS. In addition to organic growth, the

Company also continuously assesses potential acquisitions on the NCS which offer access to high quality assets and

potential upside that is in line with the Company’s strategies. If deemed beneficial to achieve the Company’s overall

strategies and objectives, the Company may also from time to time reduce its ownerships interest in certain licenses or

enter into farm-down arrangements. The Company believes there are significant remaining resources to be discovered on

the NCS and views in particular the North Sea and the Barents Sea as prospective exploration areas going forward, where

the Company will play an active in role in future licensing rounds.

The Company reached an important milestone when the Jette started production in May 2013, which was the first oil

produced by the Company as operator. Ivar Aasen will be the next building block in the Company’s history and

development as a producing operator, and will further build the Company’s skills, competence and experience within

these important areas of expertise. Significant recruitments have been done and more is underway to enable the

Company to deliver Ivar Aasen on schedule in 2016, and to start up the production from the field in Q4 2016.

The Company’s vision is to always move forward to create value on the NCS. This will be achieved through exploration,

development and production.

Values

The Company has four main values:

to be responsible by putting safety first and to strive to create the highest possible value for Shareholders and for

society;

to be enquiring, by being curious and aiming for the for new and better solutions;

to be reliable, by building trust and a good reputation through reliability and consistent behaviour; and

to be committed, by always being committed to each other, the Company and society.

Strengths

Strong asset base and cash flow from growing production

The Company has a robust resource base, certified by AGR in accordance with regulations from Society of Petroleum

Engineers. AGR has as of 31 December 2013 certified the Company’s fourteen most material assets, classifying 8 as

reserves (4 as producing assets, 4 as approved for development) and 6 as contingent resources (development pending).

Total P90 and P50 reserves amount to, respectively, 48.5 million boe and 65.8 million boe. Johan Sverdrup constitutes a

significant share of total contingent resources in the development planning phase. Due to the sensitivity surrounding the

unitisation process on Johan Sverdrup (further described in section 6.5 (“Business overview—Key Assets”)), the Company

has chosen not to give any information regarding recoverable volumes from PL265 and PL502 Johan Sverdrup in the

Annual Statement of Reserves 2013. Excluding the 20% share in PL265 and 22.22% in PL502 of Johan Sverdrup, the

“Development Pending” resource estimate ranges from 54 to 100 million boe recoverable. The Company will gain a

significant cash flow following start-up on Johan Sverdrup.

Strong Norwegian foothold and relationships

The Company, as a pure Norwegian domicile company, has strong relationships to and experience with the Norwegian oil

industry, including authorities, oil service suppliers, government and other key stakeholders. The majority of the

Company’s employees come from other key Norwegian players such as Statoil, Hydro and Saga, as well as from the

political environment. Excellent knowledge of the Norwegian regulations, tax systems and NORSOK standard provides the

Company with strong basis for safe operations and conducting business.

Dynamic and entrepreneurial company

Despite the Company’s rapid development over the last few years, it has managed to maintain its informal and

cooperative culture with high degree of loyalty and pride. The Company consists of a good mix of younger talent and

experienced people, and decision making is fast and un-bureaucratic. Visible leaders that are hands-on and operationally

involved create a flat structure with a high degree of openness, cooperation and informality.

39

Ownership structure

Through Aker ASA's approximately 49.99% indirect ownership in the Company, the Company is backed by a long term

industrial owner with a strong balance sheet, and a strategy of supporting the Company with their pro-rata share of

capital requirements going forward trough the planned development of Johan Sverdrup. Following the discovery of Johan

Sverdrup, the Company has become one of the most valuable investments for the Aker group.

6.3 History and Development

2001 ........................................................................................................... Pertra AS was founded by Petroleum Geo-Services (PGS) ASA as an E&P company with focus to exploit

the potential of young petroleum resources on the NCS. The potential benefits of collaboration between

Pertra and PGS were the main argument for establishment. Pertra was approved as a license holder and

operator on the Norwegian continental shelf in February 2002, being the first Norwegian newcomer on

the NCS over the last ten years.

2002 ........................................................................................................... Pertra acquired license shares in PL038 which contains the Company’s producing Varg field. Petra was

the operator of Varg until 2005 with very good results. Pertra’s work with Varg has often been described

as a success story within the Norwegian oil history.

2005 ........................................................................................................... PGS sold Pertra to Talisman Energy. Soon after, the management team in Pertra established a new

company, Pertra Management. The new company negotiated a contract with Talisman Energy for the

purchase of some of the assets Talisman had acquired from Pertra’s former owner. The result was the

basis for the establishment of a new E&P company in Trondheim. “New” Pertra was now established,

with financial support from local investors.

2006 ........................................................................................................... The “new” Pertra was listed on the Oslo Stock Exchange as Pertra ASA, with the founders’ ambition to

gradually build a fully-fledged Norwegian E&P company on the NCS.

2007-2008..................................................................................................... Pertra merged with the Norwegian arm of DNO, which was organised through the company NOIL Energy.

DNO changed its name to DNO International, while Pertra, as the surviving entity of the merger,

changed its name to Det norske oljeselskap ASA, or simply “Det norske” colloquially. The two

companies were formally merged in 2008. In the same year, the Company discovered Draupne, later

renamed to Ivar Aasen. Det norske is the operator and holds an ownership interest of 34.7862% in the

unit comprising the Ivar Aasen and West Cable deposits.

2009 ........................................................................................................... A merger with Aker Exploration, an E&P company established by the Aker group in 2006, was formally

approved in October 2009 with Aker Exploration as the surviving entity. The name of the merged

company remained Det norske oljeselskap ASA. Aker ASA became the Company’s largest Shareholder

with an ownership interest of around 40%. Aker ASA has later increased its ownership stake in the

Company and currently holds 49.99% of the shares in the Company.

2010 ........................................................................................................... High level of exploration activities. The Company participates in 15 wells, of which nine as operator.

The Company conducts its first production test on the Ivar Aasen field – with very positive results.

2011 ........................................................................................................... The Company participated in the significant discovery made by Statoil, at that time called Aldous

Major, later to be known as part of Johan Sverdrup. The Company has 20% ownership interest in PL 265.

2012 ........................................................................................................... The Company submits PDO for the Ivar Aasen field to the Ministry of Petroleum and Energy. This is the

Company’s first major development as operator.

2013 ........................................................................................................... With start-up of production on Jette, the Company becomes a fully-fledged oil company with activities

in the entire chain of value creation; exploration, development and production.

2014 ........................................................................................................... The Company entered into an agreement to acquire all outstanding shares in Marathon Norway.

Following completion, the Company will have a diversified asset base to support further growth.

6.4 Production Licenses and the Process of Awarding Them

The Company operates in the petroleum industry as an explorer and producer of petroleum resources on the NCS. A

production license, also called a license, is a permit or a right to engage in exploration for petroleum resources and

subsequent production on the NCS. The license is limited to a specified geographical area on the NCS and to a specified

time period. The licenses are awarded by the authorities, represented by the MPE, to one or more qualified oil

companies.

40

There are two types of licensing rounds on the Norwegian Continental Shelf; Awards in Predefined Areas (so-called

“APA”) and awards in the ordinary licensing rounds. APA is an annual licensing round that comprises the mature parts of

the continental shelf with known geology and good infrastructure. The ordinary licensing rounds comprise the less

explored parts of the continental shelf. These rounds are normally held every second year. The license awarding system is

further described in Section 10.4 “Industry Overview—Regulatory Framework on the Norwegian Continental Shelf”.

The production license regulates each company’s rights and obligations towards the State. All partners in a license are

jointly and severally responsible in fulfilling whatever obligations the production license assumes. Initially, the license is

valid for a period of up to ten years. During this period, a pre-established work program will be completed in the form of

geological and geophysical pre-studies and/or exploration drilling, plus environmental surveys. When awarding a

production license, the authorities appoints a so-called operator in which is responsible for the day-to-day license

operations.

The collaboration between the oil companies in a license, including the relationship between the operator and the other

licensees and the license partners’ relationship with the authorities, is regulated by agreements adopted by the

authorities. Both the licensing system and the different agreements regulating the collaboration between the oil

companies in a license (including unitisation of licenses) is further described in Section 10.4 “Industry Overview—

Regulatory framework on the Norwegian Continental Shelf”.

The steering committee is the supreme authority in a production license. Each of the partners in the license is

represented on the steering committee. The voting rules are normally designed so that a majority in terms of both

interests and the number of votes is required for a decision to be valid.

The authorities stipulate a working programme outlining certain obligations when awarding licenses, such as a

requirement to acquire new seismic data or the drilling of wells. In practice, this means that the licensees must decide

within a specific time period, often between one and three years, whether they wish to drill an exploration well. If they

do not wish to drill, the production license lapses. The Company’s current work obligations are described in Section 6.8

“Business overview—Conditions Relating to the Licenses” while the work obligations of Marathon Norway are described in

Section 8.6 “Presentation of Marathon Norway—Conditions Relating to the Licenses”.

The licensees can buy, sell and swap license interests, but this is conditional on the approval of the MPE, as well as by the

MoF in matters relating to tax.

6.5 Key Assets

Introduction

The Company is active in all three main petroleum provinces on the NCS; the North Sea, the Norwegian Sea and the

Barents Sea. The table below sets out the Company’s key licenses:

Field License Interest Operator Phase

Jette (unitised)(1) PL027 D, PL169 C, PL504 100%, 50% and

47.593% (70% in

the unit)

The Company Production

Atla PL102 C 10% Total E&P Norge AS Production

Jotun (unitised) PL103 B 70% (7% in the unit) ExxonMobil E&P Norway AS Production

Varg PL038 5% Talisman Energy Norge AS Production

Enoch (unitised) PL048 D 10% (2% in the unit) Talisman Energy Norge AS Production

Johan Sverdrup PL265, PL502

(to be unitised)

20% and 22.22% Statoil Petroleum AS (unit

operator to be decided)

Development

Ivar Aasen (unitised) (2) PL001 B, PL242, PL457

and PL338(2)

34.7862% The Company Development

PL028 B 35%

Gina Krog (unitised) PL029 B 20% (3.3% in the unit) Statoil Petroleum AS Development

__________

(1) Unitisation of licenses is further described in section 10.4 below (“Industry Overview—Regulatory framework on

the Norwegian Continental Shelf”).

(2) Unit agreement entered into subject to approval by MPE.

41

Producing Licenses

In 2013, the Company was a licensee in five producing fields. The main producing assets are Jette unit (70%, operator),

Atla (10%, partner) and Varg (5%, partner). In addition, the Company participated in Jotun unit (7%) and Glitne (10%). In

February 2013, the Company concluded its production on the Glitne field, nine years after production was scheduled to

close down. When the production on the Glitne field ended on 24 February 2013, the field had produced 56 million boe,

twice the original estimate. The Company also holds an interest in the Enoch field, which has been shut in for a longer

period and is expected to resume production during the summer of 2014.

The total production in 2013 was 1,629,115 boe. The average daily production was 4,463 boepd. In 2013, the Company’s

oil was sold at an average price of USD 109 per barrel. Total production in the first quarter of 2014 was 260,569 boe. This

corresponds to 2,895 boepd. The average realised oil price the first quarter in 2014 was USD 107 per barrel, while gas

revenues were recognised at market value of NOK 2.3 per standard cubic metre (Sm3).

Below is an overview of the Company’s oil and gas production for the preceding 12 months.

Jette (PL027 D, PL169 C, PL504)

The start-up of production at the Jette in May 2013 represented a milestone for the Company as this was the first oil

produced by the Company as operator. The Jette unit increased the Company’s production by more than 250% from April

to May 2013. Total production in 2013 amounted to 979,138 boe.

Jette is an oil field in the central part of the North Sea in a water depth of 127 meters. The reservoir consists of a

submarine fan system in the Heimdal Formation of Late Palaeocene age, and lies at a depth of approximately 2 200

meters. The field has been developed with a subsea installation tied back to the Jotun B platform (as further described

under the Jotun section below). A number of modifications to Jotun B, in addition to minor modifications on Jotun A,

were required in order to tie the two fields together. The chosen development concept enables future tie-up to

additional wells. The well stream from Jette is mixed with the well stream from Jotun on Jotun B, and transported to

Jotun A for further processing, storage and export.

As a measure to optimise production planning and follow-up, the Company is continuously working to update the reservoir

and well models. In the most recently updated certification of the reserves, it is assumed that the field contains about

5 million boe. The production from Jette has, as expected, continued to decline in 2014 compared to 2013. The two

producing wells are located close to the oil water contact and there is uncertainty related to how fast the water cut will

increase. The Company’s most recent estimate for ultimate recoverable reserves from the field is 3.3 million boe (100%)

based on production until the end of 2017.

The Company’s interest in the Jette unit is 70% while Petoro AS holds the remaining 30% interest.

Atla (PL102 C)

Atla is an oil field in the central part of the North Sea in a water depth of 119 meters. The reservoir contains

gas/condensate in sandstones in the Brent Group of Middle Jurassic age at a depth of about 2,700 meters. The field

42

produces with a subsea installation tied back to the existing pipeline between the Heimdal and Skirne fields. Production

started a mere two years after the discovery in October 2010. The Company’s share of the production amounted to

429,436 boe in 2013. It is estimated that the field will continue to produce until 2017.

The Company holds a 10% interest in the license. Total E&P Norge AS is the operator holding a 40% interest while

Petoro AS holds a 30% interest and Lotos Exploration and Production Norge AS each holds a 20% interest.

Jotun (PL027 B, PL103 B)

Jotun is an oil field located in the central part of the North Sea in a water depth of approximately 126 meters. The Jotun

unit comprises three structures; the easternmost structure has a small gas cap. The reservoirs consist of sandstones in the

Heimdal Formation of Palaeocene age. The reservoirs, which consist of deposits of a submarine fan system, are at a depth

of about 2,000 meters. To the west, the reservoir quality is good, while the shale content increases towards the east.

The Jotun installations comprise of an FPSO (Jotun A) and a wellhead platform (Jotun B). Production commenced in 1999

and is now in the tail-end phase. However, after the Jette unit was tied back to Jotun in 2013, the lifetime of Jotun is

extended. It is now expected that the field will continue to produce until 2021. However, due to the new prognosis for

the existing Jette wells that shows significant lower production than previous assessments, Jotun is actively seeking third

party volume opportunities.

The Company’s interest in the unit is 7%. The operator is ExxonMobil E&P Norway with a 45% interest. The other licensees

are Dana Petroleum Norway which holds a 45% interest and Faroe Petroleum Norge with its 3% interest. The Company’s

share of the total production at Jotun amounted to 69,563 boe in 2013.

Varg (PL038)

The Varg field is an oil field located in the central part of the North Sea at a water depth of 84 meters. The reservoir is in

Upper Jurassic sandstones at a depth of approximately 2,700 meters. The structure is segmented and includes several

isolated compartments with varying reservoir properties.

Varg is developed with a wellhead platform (Varg A) and an FPSO (Petrojarl Varg). Varg A is normally unmanned. The

wellhead platform and the FPSO are connected through flexible pipelines for oil production, water and gas injection and

umbilical for power supply and control. The oil is offloaded from the FPSO to shuttle tankers via a discharging system

located aft on the FPSO. All gas is re-injected into the reservoir. After 15 years of producing oil, gas production was

started in 2013, which has contributed to extend the lifetime for the Varg facilities. The gas to be produced is more than

the 1 billion Sm3 of gas that has been injected into the reservoir since the start up in 1998. Snømus (PL 672) and Oter

(PL038 E) are being evaluated as possible tie-in and drilling candidate. The Company’s share of production in 2013

amounted to 147,108 boe. It is estimated that the field will continue to produce until 2015.

The Company holds a 5% interest in the license, while the operator Talisman Energy Norge holds 65%. The remaining 30%

is held by Petoro AS.

Enoch (PL048 D)

Enoch is an oil field located in the middle part of the North Sea on the border between the NCS and the UKCS at a water

depth of 112 meters. The reservoir contains oil in Palaeocene sandstones at a depth of approximately 2,100 meters and

the reservoir quality is variable. Production started in 2007. The field is developed with a subsea well tied to the British

Brae field. The oil is processed on Brae A and exported through the Forties pipeline system to the UK.

Due to technical problems, the field has not produced since Q1 2012. On-going commercial negotiations regarding Enoch

have not been completed, and the license awaits results from the negotiation before any estimate can be given as to

whether or when production will start up on Enoch.

The Enoch field is unitised, the Norwegian section constituting 20% and the UK section constituting 80%. Of the 20%

located on the NCS, the Company holds a 10% interest corresponding to 2% of the unitised field. Other licensees in Enoch

is Talisman North Energy Limited as the operator (24% interest in the unitised field), Dana Petroleum Limited (20.8%),

Dyas UK Limited (14%), Roc Oil (GB) Limited (12%), Statoil Petroleum AS (11.78%), Endavour Energy Limited (8%), Noreco

Norway AS (4.36%), Faroe Petroleum Norge AS (1.86%) and Talisman LNS Limited (1.2% interest).

Development Projects

Ivar Aasen (PL001B, PL028B, PL242, PL338, PL457)

The Ivar Aasen is an oil field situated west of the Johan Sverdrup field in the North Sea at a water depth of 110 meters.

The reservoir consists of shallow marine sandstones in the Hugin Formation and fluvial sandstones in the Sleipner and

43

Skagerrak Formations. The reservoir contains oil at a depth of approx. 2,400 meters. Parts of the reservoir have an

overlying gas cap.

Ivar Aasen is the Company’s first major development project as operator. The PDO was approved in June 2013 and the

Company is currently working to implement the project according to plan, schedule and costs, and without HSE-incidents.

The Company’s target for production of first oil is in the fourth quarter of 2016 and the anticipated economic life is 20

years, depending on oil price and production trend. At the end of 2013, the Ivar Aasen field had certified 2P reserves of

158 million boe excluding PL457. The Company’s estimates has been updated as a result of the inclusion of volumes from

PL457 and PL338, as well as positive results from well 16/1-16 in PL457 and ocean-bed seismic (OBS) processed in

conjunction with an updated drainage strategy submitted to the Ministry of Petroleum and Energy in conjunction with

entering into a unit agreement with the licensees in PL 338 and PL 457 in respect of the Ivar Aasen and West Cable

reservoirs. The Company’s current estimates is that gross proven and probable (P50) reserves for the Ivar Aasen

development (including Hanz) are about 210 million barrels of oil equivalents (mmboe), an increase of approximately 35

percent compared to end 2013 P50 reserves. Net to Det norske, this amounts to about 74 mmboe.

The Ivar Aasen development includes production of the reserves from two other accumulations; Hanz (PL 028B) and

West Cable (PL 001B and PL 242). The approved PDO sets out that Ivar Aasen and West Cable will be developed in the

first phase and Hanz in the second phase. The Ivar Aasen and West Cable reservoirs will be developed with a manned

production platform located above the Ivar Aasen reservoir and with a planned subsea installation on Hanz tied to the Ivar

Aasen platform by means of a flow line and umbilical system. West Cable will be drained through a well drilled from the

Ivar Aasen platform. Following orders issued by the authorities, the development of Ivar Aasen is coordinated with the

adjacent Edvard Grieg field, which will receive partially processed oil and gas from the Ivar Aasen field for further

processing and export. The Edvard Grieg platform will also provide the Ivar Aasen platform with gas lift and electricity.

The Ivar Aasen platform is electrified from the start-up. The total investment in the project is estimated at NOK 24.7

billion (real 2012 value).

On 30 June 2014 an unitisation agreement for Ivar Aasen and West Cable was entered into with the licensees in PL457 and

PL338. The unit agreement is subject to approval by MPE. A commercial solution for Hanz is likely to be entered into in

connection with a final decision on when to initiate Hanz production.

Following completion of the unitisation agreement and the swap agreements with E.ON and Spike Exploration respectively

(as further described in section 6.6 below), the Company’s interest in the unitised Ivar Aasen and West Cable is 34.7862%.

The other licensees are Statoil Petroleum AS, Bayerngas Norge AS, Wintershall Norge AS, VNG Norge AS, Lundin Norway AS

and OMV (Norge) AS.

Gina Krog (PL029 B)

Gina Krog, formerly known as Dagny, in an oil field discovered in 1974. The reservoir contains oil and gas in Middle

Jurassic sandstones in the Hugin Formation. The reservoir lies at a depth of about 3,700 metres. The field is located in

the middle of the North Sea 250 kilometres west of Stavanger and 30 kilometres northwest of the Sleipner A installation,

with a water depth of 110 to 120 meters. The development solution for Gina Krog is a new steel platform and a storage

vessel for oil with a capacity of 850,000 barrels. Drilling is planned using a jack-up rig. Oil will be transported by tankers

via offshore loading (FSU). The rich gas will be transported to Sleipner for processing and onto Gassled for export.

Condensate and NGL will be exported to Kårstø, in Norway. The PDO for Gina Krog was approved in May 2013.

The first oil is scheduled for first quarter 2017 and the field is expected to be in production until 2037.

The field is unitised, and the Company has entered into an agreement that provides it with a 3.3% interest in the unitised

field. The operator Statoil Petroleum AS holds a 58.7% interest and Total E&P Norge the remaining 38%.

Early Stage Development Projects

Johan Sverdrup (PL265, PL502)

Johan Sverdrup is one of the largest fields on the NCS located on the Utsira High in the middle of the North Sea at a water

depth of 110 meters. The field reservoir is made of lower Cretaceous/Jurassic age high porosity and permeability

sandstones. It is a four-way dip closure located at a depth of 1,900 meters. Production start is anticipated in late 2019

and is expected to continue for 50 years. The properties of the reservoir have been thoroughly documented through

production tests in several wells. The field’s coarse grain size entails large pores and exceptional flow properties. The

recovery rate of the field is expected to be high. Tests confirm that the quality of the reservoir is also world class with

high porosity, often exceeding 30 per cent. Through a 48/64-inch nozzle, the test well produced with a maximum rate of

almost 6,000 boepd, and with hardly any pressure drop.

44

The estimate of recoverable resources for the Johan Sverdrup field is between 1,800 and 2,900 million boe. The field will

be developed in several phases. The first phase is forecast to have a production capacity of between 315,000 and 380,000

boepd. Pre-drilling of wells will contribute to a rapid production ramp-up. More than 70 per cent of the total resources in

the field can be produced with the facilities installed in the first phase. The second phase is estimated to be in operation

in 2022.

An appraisal programme has been carried out in the central parts of the field providing good understanding of the field,

and hence, serves as a good starting point for field development concept selection, construction and production. The

work leading up to an investment decision and submittal of PDO is led by Statoil Petroleum AS. The PDO is scheduled

submitted in the first quarter of 2015. The field centre in the first phase will consist of a processing platform, drilling

platform, riser platform and living quarters, and has been designed so as to facilitate capacity for future development.

The platforms will be installed on steel jackets linked by bridges. Future development phases shall ensure good utilisation

of the areas that constitute the field. For future phases, a number of concept selection decisions will be made before the

final field development concept is in place. Fully developed, the field is anticipated to reach a plateau production of

550,000 to 650,000 boepd from the entire field. It is estimated that Johan Sverdrup will produce past the year 2050.

The export solution for oil and gas from Johan Sverdrup is transportation to shore via dedicated pipelines. The oil will be

transported to the Mongstad terminal in the county of Hordaland. The gas will be transported via the Statpipe system to

Kårstø in the county of Rogaland for processing and onward transportation. The current plan is that the first phase will be

supplied with power from shore, with a converter at Kårstø supplying direct current to a converter on the riser platform.

Investment in the first phase is estimated at between NOK 100 and 120 billion at gross levels which includes the entire

field centre, wells, export of oil and gas, and power supply. The estimate also includes contingencies and allowances for

market adjustments.

Johan Sverdrup comprises of production licenses PL265, PL501 and PL502. The Company holds a 20% interest in PL265 and

a 22.22% interest in PL502. As the field extends across several licenses, the field will be unitised. The distribution of

ownership interests in the field will be resolved by negotiation. The negotiations will comprise the establishment of a unit

for the development and operation of the field, with governing body and voting rules. The negotiations have started as a

round table discussion between all the licensees in PL265, PL501 and PL502. The negotiations are still in an early phase

and are expected to be concluded early 2015, in conjunction with submittal of the PDO.

Frøy (PL364)

Frøy was in production from 1995 to 2001, Elf being the operator and field shut in due to low oil prices. The licensees

have worked on getting the field redeveloped. In 2008, a PDO was submitted, but had to be postponed due to the

financial crisis. Through 2010 the Frøy group matured alternative concepts to establish a more robust concept featuring a

leased field centre (FPSO/JUDPSO) combined with a WHP. The goal was to deliver an updated PDO. During spring 2011

the work on preparing an updated Frøy PDO was put aside. The PL364 group is now pursuing collaboration with other

licensees and license groups in order to develop a joint oil area hub or tie-in to Alvheim.

Company holds a 50% share in Frøy. Expected production from this field alone could add to Company a production of

20,000 boepd.

Frigg Gamma Delta (PL442)

The discovery of oil in East Frigg Delta (PL442) through well 25/2-17 is being evaluated by the operator Statoil and

includes re-evaluation of the Epsilon prospect and the Oligocene Dalton discovery. PL460 contains a discovery and

prospects that could be relevant for a Frøy redevelopment. Tie-in to Alvheim or joint development with PL364 and/or

PL442 is considered as possibilities.

Discoveries

During 2013, the Company made discoveries both in the Barents Sea and in the North Sea. The Company announced that

these discoveries increased the Company’s resources above the target for the year. The majority of the increase in

resources was due to the Gohta (PL492) and the Askja (PL272) discoveries. Both discoveries are assumed to have

commercial potential, however no field development planning has yet taken place.

Gohta (PL492)

The Company’s most exciting discovery in 2013 was made in the Gohta prospect, in license PL492 in the Barents Sea. In

the Company’s opinion, the Gohta discovery confirms a new exploration model that could have a positive ripple effect for

exploration in the Barents Sea. The preliminary estimates provided by the operator indicate volumes between 113 and

45

239 million boe. The drilling of appraisal well 7120/1-4S in PL492 started in May 2014 and preparations for testing of the

well is ongoing.

The Company’s interest in PL492 is 40%, the other licensees are Lundin Norway as operator with 40% interest and

Norwegian Energy Company ASA with a 20% interest.

Askja (PL272)

In PL272 in the North Sea, the Company participated in two discoveries in the Askja West and Askja East prospects in

2013. In Askja West, a 90-metre gas column was encountered, while a 40-metre net oil column was found in Askja East. A

preliminary estimate of the Askja discoveries indicates the presence of between 19 and 44 million boe. Askja is located

adjacent to the Krafla discovery made in 2011. The Askja and Krafla discoveries combined have potential of recoverable

resources of between 69 and 124 million boe.

The Company’s interest in license PL272 is 25%, the other licensees are Statoil Petroleum AS as operator with a 50%

interest and Svenska Petroleum Exploration with a 25% interest in the license.

Krafla (PL035 and PL272)

The Krafla discoveries (wells 30/11-8S and 30/11-8A) are located in the northern part of the North Sea, between the

Oseberg and Frigg fields. The water depth is 108 meters.

Krafla is divided into two structures; the Krafla Main drilled by well 30/11-8S and Krafla West drilled by well 30/11-8A;

both discovered in 2011. Several contacts and varying fluids characterize Krafla. In Krafla Main, free oil was found in the

Upper/Middle Tarbert Formation and free gas was found in the Ness Formation below. In Krafla West free oil was found in

the lower Heather Formation and free gas was found in the Tarbert Formation below. For most zones, an oil-down-to or

gas-down-to situation exists.

The Krafla project is in the concept selection phase, and the current schedule implies DG2 in 2015.

The Company’s interest in license PL035 and PL272 is 25%. The other licensees are Statoil Petroleum AS as operator with

a 50% interest and Svenska Petroleum Exploration with a 25% interest in the license.

46

Below is an overview of the discoveries the Company has participated in.

With the discoveries in the Company’s current asset portfolio, it is expected that commercial activity will have duration

past the year 2050.

Exploration Activity

In 2013, the Company participated in a total of 14 exploration and appraisal wells. In nine of these hydrocarbons were

proved, five of the wells were dry. An extensive appraisal programme has been carried out in 2013 on Johan Sverdrup.

The programme focused on the western and southern parts of the field, with the goal of mapping the extent and quality

of the discovery.

Completed wells for the Company in the first quarter of 2014 are Langlitinden (PL659), Trell (PL102F), Gotama (PL492)

and Geitungen appraisal (PL265). The drilling of the exploration well on Langlitinden and Trell started in 2013. The

Company will participate in approximately 9 wells in 2014 (including Langlitinden and Trell).

Langlitinden (PL659)

In February 2014, the Company announced that the exploration well on the Langlitinden prospect located in the

Barents Sea encountered an oil bearing channel sand of Triassic age. Movable hydrocarbons were proved in the main

targets for the well, but a mini-drillstem test proved poor reservoir properties. The Company is in the opinion that the

volumes proven are, as of today, insufficient to justify a field development.

The Company is operator for the license with a 10% interest. The other licensees are Lundin Norway AS (20%) Tullow Oil

Norge AS (15%), Rocksource Exploration Norway AS (5%), Petoro AS (30%) and Atlantic Petroleum Norge AS (10%).

Trell (PL102F)

In February 2014, the Company announced that the exploration well on the Trell prospect located in the North Sea,

encountered a gross oil column of 21 metres in the Heimdal formation. Basic data acquisition and sampling indicate very

good production properties, in line with expectations. Preliminary estimates indicate between 0.5 and 2.0 million

47

standard cubic metres (Sm3) of recoverable oil. The licensees will evaluate the discovery together with other nearby

prospects and consider further follow-up.

The Company’s interest in PL102F is 10%, the other licensees are Total E&P Norge AS (operator, 40%), Petoro AS (30%),

Lotos Exploration and Production Norge AS (10%) and Ithaca Petroleum Norge AS (10%).

Gotama (PL550)

In May 2014, the Company announced that the exploration well on the Gotama prospect, located in the North Sea, did not

encounter reservoir quality sandstones in the Upper Jurassic main target. The well encountered reservoir quality

sandstone in secondary targets, but these were water wet. The well is classified as a dry-hole. There are no firm plans for

further drilling on the license.

The Company’s interest in PL550 is 10%. The other licensees are Tullow Oil Norge AS as operator with an 80% interest and

VNG Norge AS with a 10% interest.

Geitungen appraisal (PL265)

The Geitungen appraisal well was drilled in early 2014 in PL265 on the northern margin of the Johan Sverdrup field. The

well encountered six metres gross oil-bearing sandstone of medium to good quality assumed to constitute part of the

Statfjord Group. The license partners decided to drill a 1,000 metre side-track well towards the southwest in order to

clarify the northern extent of the sandstones of the Draupne Formation, constituting the main reservoir on Johan

Sverdrup. Here, a 12 metre gross oil-bearing sandstone/siltstone interval of medium good reservoir development was

encountered in the Draupne formation.

The Company’s interest in PL265 is 20%, the other licensees are Statoil as operator has a 40% interest, Petoro AS a 30%

interest and Lundin Norway AS 10% interest.

Terne (PL558)

The 6507/5-7 exploration well on the Terne prospect in PL558 in the Norwegian Sea was drilled in June 2014. The well did

not encounter hydrocarbons and was classified as dry. The Company is partner in the license with a 10%, following a

farm-down agreement with Petrolia Norge AS according to which Petrolia Norge AS is entitled to a 10% interest and

obligated to carry most of the Company’s drilling costs. The farm down agreement is subject to approval by the

authorities. The well was drilled by the Borgland Dolphin rig. PL 558 is operated by E.ON E&P Norge AS (30 per cent

equity). Other partners are PGNIG Upstream International (30 per cent), Petrolia Norway AS (10 per cent equity*) and

Petoro AS (20 per cent equity).

The table below sets out the Company’s historical exploration activity from 2010 to 2013 in the North Sea, the Barents

Sea and the Norwegian Sea.

License Prospect Interest Drilling operator Type Area Content

2010

PL 001B Ivar Aasen 35 % Det norske oljeselskap ASA Appraisal North Sea Oil/Gas

PL 028 S Balder Trias 40 % ExxonMobil E&P Norway AS Wildcat North Sea Dry

PL 332 Optimus 40 % Talisman Energy Norge AS Wildcat North Sea Dry

PL 460 Storklakken 100 % Det norske oljeselskap ASA Wildcat North Sea Oil

PL 337 Storkollen 45 % Det norske oljeselskap ASA Wildcat North Sea Dry

PL 408 Storkinn 100 % Det norske oljeselskap ASA Wildcat North Sea Dry

PL 038 D Grevling 30 % Talisman Energy Norge AS Appraisal North Sea Oil

PL 341 Stirby 30 % Det norske oljeselskap ASA Wildcat North Sea Dry

PL 102 C Atla 10 % Total E&P Norge AS Wildcat North Sea Gas/

Condensate

PL 392 Dalsnuten 10 % A/S Norske Shell Wildcat Norwegian Sea Dry

PL 468 Dovregubben 95 % Det norske oljeselskap AS Wildcat Norwegian Sea Dry

2011

PL 522 Gullris 10 % BG Norge AS Wildcat Norwegian Sea Dry

PL 535 Norvarg 20 % Total E&P Norge AS Wildcat Barents Sea Gas

PL 035 Krafla 25 % Statoil Petroleum AS Wildcat North Sea Oil

48

PL 035 Krafla West 25 % Statoil Petroleum AS Wildcat North Sea Oil/Gas/

Condensate

PL 438 Skalle 10 % Lundin Norway AS Wildcat Barents Sea Gas

PL 482 Skaugumsåsen 65 % Det norske oljeselskap ASA Wildcat Norwegian Sea Oil/Gas

PL 416 Breiflabb 15 % E.ON Ruhrgas Norge AS Wildcat North Sea Dry

PL 265 Johan Sverdrup

(Aldous Major South) 20 % Statoil ASA Wildcat North Sea Oil


(Aldous Major North) 20 % Statoil ASA Appraisal North Sea Oil


(Aldous Major South) 20 % Statoil ASA Appraisal North Sea Oil

2012

PL 450 Storebjørn 60 % Det norske oljeselskap ASA Wildcat North Sea Dry

PL 440 S Clapton 10 % Faroe Petroleum Norge AS Wildcat North Sea Dry

PL 414 Kalvklumpen 40 % Det norske oljeselskap ASA Wildcat North Sea Dry

PL 356 Ulvetanna 60 % Det norske oljeselskap ASA Wildcat North Sea Dry


(Geitungen) 20 % Statoil ASA Appraisal North Sea Oil

PL 554 Garantiana 20 % Total E&P Norge AS Wildcat North Sea Oil

PL 554 Garantiana (Side-

track) 20 % Total E&P Norge AS Appraisal North Sea Oil

PL 533 Salina 20 % Eni Norge AS Wildcat Barents Sea Gas/

Condensate

PL 497 Geite 35 % Det norske oljeselskap ASA Wildcat North Sea Dry


(Espevær) 20 % Statoil Petroleum AS Appraisal North Sea Oil

PL 568 Isbjørn 20 % Talisman Energy Norge AS Wildcat North Sea Dry


(Kvitsøy) 20 % Statoil Petroleum AS Appraisal North Sea Oil

2013

PL 453 S Ogna 25 % Lundin Norway AS Wildcat North Sea Dry

PL 502 Johan Sverdrup 22.22 % Statoil Petroleum AS Wildcat North Sea Dry

PL 531 Darwin 10 % Repsol Exploration Norge AS Appraisal Barents Sea Dry

PL 265 Johan Sverdrup 20 % Statoil Petroleum AS Wildcat North Sea Oil

PL 535 Norvarg 10 % Total E&P Norge AS Appraisal Barents Sea Gas

PL 265 Johan Sverdrup 20 % Statoil Petroleum AS Appraisal North Sea Dry

PL 542 Augunshaug 60 % Det norske oljeselskap ASA Wildcat North Sea Dry


(Cliffhanger North) 20 % Statoil Petroleum AS Wildcat North Sea Oil

PL 551 Mantra/Kuro 20 % Tullow Oil Norge AS Wildcat North Sea Dry

PL 492 Gohta 40 % Lundin Norway AS Wildcat Barents Sea Oil

PL 102C Trell 10 % Total E&P Norge AS Wildcat North Sea Oil

PL 659 Langlitind 30 % Det norske oljeselskap ASA Wildcat Barents Sea Oil

(Non-commercial)

PL 272 Askja West/East 25 % Statoil Petroleum AS Wildcat North Sea Oil/Gas

PL 272 Askja West/East 25 % Statoil Petroleum AS Wildcat North Sea Oil/Gas

49

The table below sets out the Company’s planned activity for 2014, including the Johan Sverdrup appraisal well drilled

(Geitungen) in the first quarter of 2014:

The licenses considered to be of largest importance to the Company’s future profitability are PL265 containing the

Johan Sverdrup field, PL001B/PL457 containing the Ivar Aasen field and the Alvheim licenses to be acquired upon

completion of the Transaction. The Company’s profitability is dependent on these licenses.

6.6 License Portfolio, Reserves and Resources

Overview

As of the end of the first quarter of 2014, the Company operates 28 licenses and is partner in an additional 51 licenses.

The list below shows 79 licenses, where the Company operates 28 and is partner in 51. This is because some of the

licenses have various partnerships divided between production and exploration. For example the Jette unit covers three

licenses that is carved out from PL027 D, PL169 C and PL504 as a production unit (the Company has a 70% interest while

Petoro has 30%). The same three licenses are also listed as exploration licenses where the Company participates with

another working interest.

The tables below sets out the Company’s license portfolio in the North Sea, the Barents Sea and the Norwegian Sea

respectively:

North Sea

License Field/prospect Interest Operator Expiry Phase

Field (PL 027 D/169 C/504) Jette unit 70 % Det norske Prod.

PL 001B Ivar Aasen 35 % Det norske 31.12.2036 Dev.

PL 026 B Langfjellet 62.13 % Det norske 23.05.2025 Expl.

PL 027 D Eitri, Iving 100 % Det norske 01.03.2021 Expl.

PL 027 ES Eitri, Iving 40 % Det norske 23.05.2015 Expl.

PL 028 B Hanz 35 % Det norske 31.12.2036 Expl.

PL 103 B Brandhaug 70 % Det norske 01.03.2021 Expl.

PL 504 Brandhaug 47.593 % Det norske 01.03.2021 Expl.

50

PL 504 BS Brandhaug 83.571 % Det norske 23.01.2015 Expl.

PL 504 CS Brandhaug 21.814 % Det norske 23.01.2015 Expl.

PL 169 C Jette øst 50 % Det norske 01.03.2030 Expl.

PL 242 West Cable 35 % Det norske 04.06.2036 Expl.

PL 364 Frøy 50 % Det norske 06.01.2019 Expl.

PL 460 Storklakken, Steingeita 100 % Det norske 01.03.2015 Expl.

PL494 Heimdalshøe 30 % Det norske 23.07.2016 Expl.

PL 494 B Heimdalshøe 30 % Det norske 23.07.2016 Expl.

PL 494 C Heimdalshøe 30 % Det norske 23.07.2016 Expl.

PL 549 S Kolsås 35 % Det norske 19.02.2020 Expl.

PL 553 Kvitvola 40 % Det norske 19.02.2016 Expl.

PL 573 S Odin, Frigg 35 % Det norske 04.02.2019 Expl.

PL 626 Rovarkula 50 % Det norske 03.08.2019 Expl.

PL 663 Skåla 30 % Det norske 08.02.2021 Expl.

PL 677 Hyrokkin 60 % Det norske 08.02.2020 Expl.

PL 724 Ymmelstind 40 % Det norske 07.02.2021 Expl.

PL 748 Huva 40 % Det norske 07.02.2020 Expl.

Field (PL 029 B/029 C/048/303) Gina Krog 3.3 % Statoil Dev.

Field (027 B/103 B) Jotun unit 7 % ExxonMobil Prod.

PL 019 C Kark 30 % Talisman 01.09.2018 Expl.

PL 019 D Kark 30 % Talisman 01.09.2018 Expl.

PL 029 B Freke 20 % Statoil 23.05.2015 Expl.

PL 035 Krafla 25 % Statoil 14.11.2022 Expl.

PL 035 C Krafla 25 % Statoil 14.11.2022 Expl.

PL 272 Krafla 25 % Statoil 14.11.2022 Expl.

PL 038 Varg 5 % Talisman 01.04.2021 Prod.

PL 038 E Varg 5 % Talisman 07.02.2020 Prod.

PL 038 D Grevling 30 % Talisman 01.04.2021 Expl.

PL 048 B Glitne 10 % Statoil 15.07.2016 P&A

PL 048 D Enoch 10 % Statoil 18.02.2018 Prod.

PL 102 C Atla 10 % Total 01.03.2025 Prod.

PL 102 D Angeya 10 % Total 01.03.2025 Expl.

PL 102 F Trell 10 % Total 01.03.2025 Expl.

PL 102 G Trell 10 % Total 01.03.2025 Expl.

PL 265 Johan Sverdrup 20 % Statoil 27.01.2037 Dev.

PL 502 Johan Sverdrup 22 % Statoil 23.01.2016 Dev.

PL 362 Fulla 15 % BP 06.01.2016 Expl.

PL 035 B Fulla 15 % Lotos 06.01.2016 Expl.

PL 440 S Clapton 10 % Faroe 15.06.2013 Expl.

PL 442 Gamma/Delta 20 % Centrica 15.12.2016 Expl.

PL 550 Gotama 10 % Tullow 19.02.2016 Expl.

PL 551 Mantra 20 % Tullow 19.02.2018 Expl.

PL 554 Garantiana 20 % Total 19.02.2018 Expl.

PL 554 B Garantiana 20 % Total 19.02.2016 Expl.

PL 554 C Garantiana 20 % Total 19.02.2018 Expl.

PL 567 Freki 40 % Premier 04.02.2020 Expl.

PL 568 Isbjørn 20 % Talisman 04.02.2017 Expl.

PL 571 Mannen/Havfruen 40 % Suncor 04.02.2017 Expl.

51

PL 574 Kolsås 10 % Statoil 04.02.2020 Expl.

PL 619 Uranostind 30 % Total 03.02.2020 Expl.

PL 627 Skirne East 20 % Total 03.02.2019 Expl.

PL 667 Munken 30 % Total 08.02.2020 Expl.

PL 672 Snømus 25 % Talisman 08.02.2018 Expl.

PL 676 S Dama 20 % Faroe 08.02.2020 Expl.

PL 678 BS Båtfjellet 25 % Wintershall 08.02.2020 Expl.

PL 678 S Båtfjellet 25 % Wintershall 08.02.2020 Expl.

PL 681 Kuro 16 % Tullow 08.02.2018 Expl.

PL 730 Fannaråken 30 % E.ON 07.02.2022 Expl.

Norwegian Sea


PL 522 Balderbrå 10 % BG 15.05.2015 Expl.

PL 558 Terne 20 % E.ON 19.02.2016 Expl.

License Swap Agreements

Swap agreement with Spike Exploration

On 17 June 2014, the Company entered into an agreement with Spike Exploration for a swap of 10% of the Company’s

interest in license PL554/B/C containing the Garantiana oil discovery for a 20% interest in PL457 containing parts of the

Ivar Aasen deposit. It is expected that the agreement will be closed in Q3 2014.

PL457 is located adjacent and to the east of license PL001B on the Utsira High in the North Sea. Following drilling of the

Asha discovery in late 2012 it was established that Ivar Aasen extends into license PL457. Unitisation discussions between

the Ivar Aasen partners and the PL457 license partners are on-going. Licenses 554/B/C are located North East of the

Visund field in the North Sea where drilling of the Garantiana-2 appraisal well is on-going.

Upon completion of the swap agreement, the Company will hold a 20% interest in license PL457 and a 10% interest in

license PL554/B/C. The transaction is subject to approval by the relevant authorities.

Barents Sea


PL 659 Langlitinden 20 % Det norske 03.02.2020 Expl.

PL 709 Arenaria 40 % Det norske 21.06.2019 Expl.

PL 715 Åtind 40 % Det norske 21.06.2019 Expl.

PL 438 Komse 10 % Lundin 16.02.2015 Expl.

PL 531 Darwin 10 % Repsol 15.05.2014 Expl.

PL 492 Gohta 40 % Lundin 01.03.2015 Expl.

PL 533 Salina 20 % Eni 15.05.2015 Expl.

PL 535 Norvarg 10 % Total 15.05.2014 Expl.

PL 535 B Norvarg 10 % Total 15.05.2014 Expl.

PL 613 Fafner 35 % Dong 13.05.2017 Expl.

PL 706 Eiketunet 20 % Shell 21.06.2018 Expl.

52

Swap agreement with E.ON E&P Norge AS

On 26 June 2014, the Company entered into an agreement with E.ON E&P Norge AS (E.ON) to swap two exploration

licenses plus a cash consideration for a 20% interest in PL457, containing parts of the Ivar Aasen deposit. PL457 is located

adjacent and to the east of license 001B (Ivar Aasen) on the Utsira High in the North Sea. Upon completion of this

transaction, E.ON will receive a 15% interest in PL613 in the Barents Sea and a 10% interest in PL676 S in the North Sea

plus a cash consideration.

Following drilling of the Asha discovery in late 2012 it was established that Ivar Aasen deposit extends into PL457. A unit

agreement was entered into on 30 June 2014 between the licensees of the deposits Ivar Aasen (PL001 B, PL457 and

PL338) and West Cable (PL001 B and PL242), subject to approval by the MPE.

Below is an illustration of the Company’s license portfolio.

Reserves and Resources

As of 31 December 2013, the Company has a working interest in eight fields containing reserves. Out of these, four are in

the subclass “On Production” and four are in the sub-class “Approved for Development”. Please note that Varg has

reserves in both “On Production” and in “Justified for Development”.

Sub-class “On Production”:

Varg – 5% interest, operated by Talisman

Jotun – 7% interest, operated by ExxonMobil

Atla – 10% interest, operated by Total

Jette – 70% interest, operated by the Company

Sub-class “Approved for Development”:

Enoch – 2% interest, operated by Talisman

Ivar Aasen – 34.7862% interest, operated by the Company

Hanz - 35% interest, operated by the Company

Gina Krog – 3.3% interest, operated by Statoil

Varg gas – 5% interest, operated by Talisman

53

The Company’s total net proven reserves (P90/1P) as of 31 December 2013 is estimated at 48.5 million boe. Total net

proven plus probable reserves (P50/2P) are estimated at 65.8 million boe.

The table below list the Company’s 2013 year-end reserves. The table is based on the Annual Statement of Reserves 2013:

On Production Interest 1P / P90 (low estimate) 2P / P50 (best estimate)

Gross

oil/cond Gross NGL

Gross gas

Gross oil equivalents

Net oil equivalents

Gross oil/cond

Gross NGL

Gross gas


Net oil equivalents

As of 31.12.2013 % (million barrels)

Mton (bcm) (million barrels)

(million barrels)

(million barrels)


(million barrels)

Glitne 10 % 0.00 0.00 0.00 0.00

Varg 5 % 1.43 1.43 0.07 2.42 2.42 0.12

Jotun Unit 7 % 3.29 3.29 0.23 3.57 3.57 0.25

Atla 10 % 0.57 0.61 4.38 0.44 0.77 0.95 6.77 0.68

Jette (moved from AfD)

70 % 0.77 0.77 0.54 3.24 3.24 2.27

Total 1.28 3.32

Approved for Development

Interest 1P / P90 (low estimate) 2P / P50 (best estimate)

Gross

oil/cond Gross NGL

Gross gas


Net oil equivalents

Gross oil/cond

Gross NGL

Gross gas


Net oil equivalents



(million barrels)

(million barrels)


(million barrels)

Enoch Unit 2 % 1.71 1.71 0.03 2.61 2.61 0.05

Jette (moved to OP)

70 % 0.00 0.00 0.00 0.00

Ivar Aasen (moved from JfD)

35 % 84.46 0.87 3.87 119.25 41.74 115.49 1.06 4.67 157.56 55.15

Gina Krog (moved from JfD)

3 % 80.79 2.48 8.49 163.82 5.41 104.79 3.15 11.33 213.67 7.05

Varg gas (moved from JfD)

5 % 0.04 0.04 0.15 1.48 0.07 0.23 0.10 0.39 3.88 0.19

Total 47.25 62.44

Justified for Development

Interest 1P / P90 (low estimate) 2P / P50 (best estimate)

Gross

oil/cond Gross NGL

Gross gas


Net oil equivalents

Gross oil/cond

Gross NGL

Gross gas


Net oil equivalents



(million barrels)

(million barrels)


(million barrels)

Ivar Aasen (moved to AfD)

35 % 0.00 0.00 0.00 0.00

Gina Krog (moved to AfD)

3.3 % 0.00 0.00 0.00 0.00

Varg gas (moved to AfD)

5 % 0.00 0.00 0.00 0.00

Total 0.00 0.00

Total Reserves 31.12.2013 48.53 65.76

Total Reserves 31.12.2012 42.45 65.31

54

Changes from 2012 are summarised in the table below. The main reason for increased net proven total reserve estimate is

increased Ivar Aasen reserves. Please note that the increased “On production” reserve estimate is because Jette has been

updated from “Approved for Development”. Note also that the significantly increased “Approved for Development”

reserve estimate is because all fields reported in “Justified for Development” in 2012 (Ivar Aasen, Gina Krog and Varg

gas) have been upgraded. This is consequently also the reason for the reduced “Justified for Development” reserve

estimates.

Net attributed million barrels of oil equivalents (mmboe)

In production Approved for Development

Justified for Development

Total

1P / P90 2P / P50 1P / P90 2P / P50 1P / P90 2P / P50 1P / P90 2P / P50

Balance as of 31.12.2012 0.92 1.60 2.72 4.53 38.81 59.17 42.45 65.31

Production -1.63 -1.63 0.00 0.00 0.00 0.00 -1.63 -1.63

Acquisitions/disposals 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Extensions and discoveries 0.00 0.00 0.00 0.00 0.00 0.00 0.00

New developments 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

Revisions of previous estimates 1.98 3.34 44.53 57.91 -38.81 -59.17 7.70 2.08

Balance as of 31.12.13 1.28 3.32 47.25 62.44 0.00 0.00 48.53 65.76

Delta 0.36 1.72 44.53 57.91 0.00 0.00 6.07 0.45

According to the Annual Statement Report 2013, the Company has interest in 23 discoveries/projects classified as

contingent resources. Six of these are in the planning phase (“Development Pending”); PL364 Frøy (5% interest, operated

by the Company), PL460 Storklakken (100% interest, operated by the Company), PL442 Frigg Gamma/Delta (20% interest,

partner), PL 035B/362 Fulla (15% interest, partner), PL272/035 Krafla (25% interest, partner) and PL265/502 Johan

Sverdrup (20%/ 22.2% interest, partner). Due to the unitisation process on Johan Sverdrup, there are not included any

information on recoverable volumes from PL265 and PL502 Johan Sverdrup in the Annual Statement of Reserves 2013.

Excluding the 20% share in PL265 and 22.22% in PL502 of Johan Sverdrup the “Development Pending” contingent resource

estimate ranges from 54 to 100 million barrels of recoverable oil equivalents.

All volumes within the reserve category (except for the minor Enoch Field) have been certified by an independent third

party consultancy (AGR Petroleum Services AS). These are the producing fields Varg, Jotun, Atla, Jette and the still not

developed fields Ivar Aasen and Gina Krog.

The last report on reserves is the annual statement of reserves 2013 published in March 2013. The report corresponds to

the Company’s RNB (revised national budget) reporting for 2014 to the MPE. The Company’s reports on reserves are

available at the Company’s web page at http://www.detnor.no/en/investor/reports/reserve-reports/.

The Company’s reserve and contingent resource volumes have been classified in accordance with the Society of

Petroleum Engineers’ (SPE’s) “Petroleum Resources Management System”. This classification system is consistent with

Oslo Stock Exchange’s requirements for the disclosure of hydrocarbon reserves and contingent resources. The framework

is illustrated in the figure below:

http://www.detnor.no/en/investor/reports/reserve-reports/

55

Farm-in and Farm-Out

As part of a continuous program to optimise its portfolio, the Company relinquishes exploration licenses, and farms in and

out of licenses on a regular basis. A farm-in / farm-out involves a situation where the owner of a license transfers all or a

portion of its interest in a license, or a part of its interest in the production from a license, to another company in return

for the performance of some agreed upon action, e.g. to undertake exploration of a field, drill one or more wells or

develop the field. Farm-in- / farm-out agreements are subject to approval of the MPE. Farm-in and farm-outs are mainly

relevant for licenses in the exploration phase.

In the fourth quarter of 2013, the Company entered into an agreement with Atlantic Petroleum Norge AS concerning the

sale of a 10% interest in PL659 in the Barents Sea containing the Langlitinden prospect. The Company is the operator and

holds a 20% interest in the license following the transaction. As compensation, Atlantic Petroleum carried part of the

Company’s drilling costs related to the exploration well.

In the second quarter of 2014, the Company entered into an agreement with Petrolia Norway AS farming out of its 10%

interest in PL558 containing the Terne prospect in the Norwegian Sea in return for a carry of 17.5% of the drilling costs

relating to the exploration well. Terne is further described in section 6.5 above.

6.7 Material Contracts

General

Save for the share purchase agreement entered into for the purpose of the Transaction and agreements entered into with

consultants and banks in this regard, as described in Section 7.1 “The Transaction—Overview and Principal Terms” and

the Underwriting Agreement described in Section 20.18 “Terms of the Rights Issue—the Underwriting”, neither the

Company nor its subsidiary has entered into any material contracts outside the ordinary course of business during the last

two years. Below is a summary of the material contracts entered into by the Company in its ordinary course of business

over the last two years.

Agreements relating to development projects

Ivar Aasen

The Company is operator for the development of the Ivar Aasen field, and has in this respect entered into several

important contracts on behalf of the relevant license groups. The Ivar Aasen platform deck will be built by SMOE in

Singapore and Batam in Indonesia under an EPC contract. The work is scheduled for completion in the first six months of

2016. The total weight of the deck is around 15,000 tonnes (dry weight). The contract is an EPC contract based on

standard NTK 07 with some modifications. Payment is based on lump sum for prelim, reimbursable engineering and

procurement and unit rates for construction.

The living quarters module for the Ivar Aasen platform will be built by Apply Leirvik in Stord. The module will have seven

decks and a total deck space of 3,300 square metres. It will have 70 single cabins, a helicopter deck and control room.

The living quarters will be constructed of aluminium. The contract is a so-called EPC contract (engineering, procurement

and construction) based on standard NTK 07 with some modifications. Payment is lump sum including some provisional

elements for procurement.

The steel jacket will be constructed by Saipem at the yard in Arbatax in Sardinia. The jacket will have a height of 138

metres and be installed at a depth of 112 metres. Its total weight will be around 9,000 tonnes. The contract is an EPC

contract based on standard NTK 07 with some modifications. Payment is lump sum.

Saipem has also been contracted to carry out transport and installation. The contract ensures that the platform deck can

be lifted onto the jacket at the right time. The steel jacket is scheduled installed during the first six months of 2015 and

the platform deck is planned to be lifted into place in the course of the first six months of 2016. The contract is an EPCI

contract based on standard NF modified for installation scope. Payment is lump sum.

Aibel won the contract for the hook-up of the Ivar Aasen platform. The company is responsible for operational support,

maintenance and modification assignments for the field. The offshore hook-up work is scheduled started in summer 2016.

The contract is based on standard NTK 07 MOD. Payment is reimbursable.

EMAS AMC will deliver and install pipelines for the Ivar Aasen field under an EPCI contract. The offshore installation

activities are scheduled completed by 2016. The company will lay the subsea power cable which will be connected to the

platform on the adjacent Edvard Grieg field. The contract is an EPCI contract based on standard NCS 05 with some

modifications. Payment is lump sum.

56

Prosafe will procure that people have a place to stay during the work on Ivar Aasen. Safe Scandinavia will be used as

flotel (or a comparable suitable flotel). A flotel is mobile floating living quarters. The contract is based on a standard

drilling rig hire template and lump sum payment.

Maersk Drilling is to drill the wells on Ivar Aasen with the XL Enhanced 2 jack-up rig. The rig is currently under

construction in Singapore. Pre-drilling is scheduled to start following the installation of the platform jacket. Contract is

based on a standard drilling rig hire template and hire is paid based on a daily rate.

In addition, a contract for maintenance, modification and operation services (MMO) has been entered into with Aibel AS.

The contract is based on standard NTK 07 MOD with a call off mechanism. The compensation format will be defined in

each call-off, being either reimbursable with a fixed profit and incentives mechanism based on performance, a lump sum

payment or a target budget pricing mechanism. The duration of the contract is 6 years from award date, with an option

for the Company to extend the contract by two additional periods of two years each, providing a maximum contract

duration of 10 years. Any expenditure obligation for the Company under the contract requires that a call off has been

submitted by the Company.

Johan Sverdrup

The Johan Sverdrup early stage development is still in an early phase, but Aker Solutions was awarded the front end

engineering design (FEED) contract late 2013 by Statoil as the operator of the Johan Sverdrup Pre Unit. Standard Statoil

contract for engineering services, compensation is reimbursable.

Statoil as operator has also entered into a frame agreement with Kværner for delivery of steel jacket structures to Johan

Sverdrup. Based on the frame agreement, Statoil has signed a Letter of Intent for Kværner to deliver two of the planned

steel jackets to Johan Sverdrup.

6.8 Conditions Relating to the Licenses

The Company’s licenses are subject to the following remaining work obligations:

License

(bold = operator) Prospect/field

Drill or drop

decision

(“DoD”)

Decision to prepare

a PDO or drop PDO

026B Langfjellet n.a. 15.03.2015 15.12.2016

038E 07.02.2016 07.02.2019 07.02.2020

362 n.a. 06.12.2015 06.01.2016

438 Lavvo/Komse n.a. 16.02.2015 16.02.2015

442 Frigg G/D n.a. 15.03.2015 15.12.2016

460 Storklakken n.a. 01.03.2014 01.03.2015

492 Gotha n.a. 28.08.2015 28.08.2016

494/494B/494C Heimdalshø n.a. 23.07.2015 23.07.2017

533 Salina n.a. n.a. 15.5.215

549S Kolsås 19.08.2014 19.02.2018 19.02.2020

550 Gotama n.a. 19.10.2014 19.02.2016

551 Mantra/Kuro n.a. 19.02.2016 19.02.2018

553 Kvitvola n.a. 19.02.2015 19.02.2016

554/554B/554C Garantiana n.a. 19.02.2017 19.02.2018

558 Terne n.a. 19.02.2015 19.02.2016

567 Freki 04.02.2015 04.02.2019 04.02.2020

568 Isbjørn n.a. 04.02.2016 04.02.2017

571 Mannen 04.02.2014 04.02.2016 04.02.2017

573S Odin 04.08.2014 04.02.2018 04.02.2019

574 Kolsås 04.02.2015 04.02.2019 04.02.2020

613 Fafner 13.11.2014 n.a. 13.05.2017

619 Uranostind 03.02.2015 03.02.2019 03.02.2020

626 Rovarkula 03.08.2014 03.08.2018 03.08.2019

57

627 Skirne East 01.06.2014 03.02.2018 03.02.2019

659 Langlitinden n.a. 03.02.2018 03.02.2020

663 Skåla 08.02.2015 08.02.2019 08.02.2021

667 Munken 08.02.2015 08.02.2019 08.02.2020

672 Snømus 08.08.2014 08.02.2017 08.02.2018

676S Dama 08.02.2015 08.02.2019 08.02.2020

677 Hyrokkin 08.02.2015 08.02.2019 08.02.2020

678S/ 678BS Båtfjellet 08.02.2015 08.02.2019 08.02.2020

681 Kuro n.a. 08.02.2016 08.02.2018

706 Eiketunet 21.06.2015 n.a. 21.06.2018

709 Arenaria 21.06.2016 n.a. 21.06.2019

715 Åtind 21.06.2016 n.a. 21.06.2019

724 Ymmelstind 07.02.2016 07.02.2020 07.02.2021

730 Fannaråken 07.02.2016 07.02.2021 07.02.2022

748 Huva 07.02.2017 07.02.2019 07.02.2022

6.9 Rig Capacity and Access

The Company has joined several rig consortiums in the past and are currently ending a long-term agreement with the

drilling rig Transocean Barents in mid 2014. For the future exploration and drilling of production wells of Ivar Aasen, the

Company has entered into a long term agreement with Maersk. The jackup rig is a XLE 2 type, which is currently under

construction in Singapore. The XLE 2 is the world’s largest and most cutting-edge jackup drilling rig.

In addition to the Maersk contract, the company has secured rig for two exploration wells in PL494 and PL553.

The contract lengths and the drilling plan are illustrated in the chart below.

The Company experiences a “soft” market for rig capacity at present, and expect that rig capacity for exploration wells

will continue to be “soft” in the years to come.

6.10 Sandvika Fjellstue AS

The Company owns all shares in the private limited liability company Sandvika Fjellstue AS with organisation number

993 952 451, which is the Company’s conference centre and mountain lodge located in Sandvika in Verdal in the county of

Nord-Trøndelag, used by the entire Company for courses, gatherings, management meetings, board meetings and

conferences. In addition, the Company’s employees may use the mountain lodge in Sandvika in their spare time.

Sandvika Fjellstue AS is from a materiality consideration not consolidated in the Company’s annual financial statements

as of and for the year ended 31 December 2013, but it is recognised at a cost of NOK 12 million in the statement of

financial position. According to the financial statements for Sandvika Fjellstue AS as of and for the year ended 31

December 2013, the company’s total operating revenues amounted to NOK 2,222,796 and the company had an operating

loss of NOK 946,203.

58

6.11 Research and Development, Patents and Licenses

The Company’s research and development (R&D) activities support the Company’s vision described in section 6.2.

According to the Company’s R&D Strategy, the Company prioritizes the development of technology and knowledge that:

Provide competitive advantage by awarding new licenses;

increases academic enthusiasm and intern expertise;

makes the Company the best provider of small and medium-sized fields;

can be implemented in a relatively short term;

prevents damage to health and the environment and ensures technical integrity; and

increases the Company's professional reputation, and makes it a preferred partner.

The Company is mainly involved in external research projects, with internal follow-up as a guarantee for the work.

Exploration has been the Company’s core activity since its inception, and, naturally, it is the company’s top research

priority.

The table below list the amount spend on R&D by the Company the last three years.

NOK million 2011 2012 2013

R&D ............................................................................................................ 35 60 59

As of the date of this Prospectus, the Company does not have any registered patents.

6.12 Organisation

The Company’s upstream activity is organised in four business units; exploration, field development and operations,

projects, Ivar Aasen development and Johan Sverdrup. The purpose of having specific business units to manage the

Company’s interest in the Ivar Aasen and Johan Sverdrup field reflects the importance of these oil fields in the

Company´s overall reserves and resources portfolio. As of 31 March 2014, the Company had over 262 employees.

The Company’s organisation and management model is illustrated in the figure below:

59

Pensions

Every employee in the Company has a pension scheme that is administered and managed by a Norwegian life insurance

company (DNB life insurance). The pension scheme applies to all employees who have reached the age of 20 and who

work minimum 20% position, as long as the employees meets the health qualification for the pension.

The plan applies to salaries of up to 12 times the basic National Insurance amount (G) and entitles to defined future

benefits of maximum 66% of a person's pay on retirement. The benefit depends mainly on the number of earning years,

pay level on reaching the pensionable age and National Insurance amounts. The pension liabilities are covered by an

insurance company. Expected premium payments in 2014 amount to NOK 28.6 million.

In addition to the secured pension plan, the previous Chief Executive Officer has an unsecured early retirement plan. The

liability is calculated using the same actuarial assumptions as for the Company's other pension liabilities. Both the liability

and the costs related to this plan are included in the figures below.

The Company has no pension scheme for salaries exceeding 12 times the National Insurance basic amount (G), but a share

savings investment scheme has been introduced as part of the pay system, equivalent to 20 per cent of gross annual

salary. The employees receive an annual payment of 10 per cent of the previous year’s gross salary. If employees wish to

buy shares in the Company, the Company will pay a corresponding amount as tax compensation provided that the

employee agrees to hold those shares for at least 12 months. For those who do not buy shares, a tax withholding will be

deducted from the payment. The first payments under the share investment scheme were made in January 2011.

The Company benefit plan covers 224 persons and the net liability as of 31 December 2013 amounted to NOK 66.5 million.

Insurance

The Company has travel insurance and health insurance for its employees and also keep an employer’s liability insurance

which covers occupational injury/disease leisure accident, other illness and group life assurance.

6.13 Health, Safety and Environment

The Company’s main HSE programme and specific activities in sub-projects have reflected the four mains priorities of the

PSA (barriers, management and major accident risk, the natural environment and groups exposed to risk). The Company’s

HSE objectives are to execute our operations in a manner ensuring that we:

Annual General Meeting

Corporate Assembly

Board of Directors

Corporate Management

Chief Executive Officer

Nomination

CommitteeExternal Auditor

Audit CommitteeRemuneration

Committee

ExplorationJohan Sverdrup Asset

Management

Field Development

and Operation

Ivar Aasen

Development

Exploration

Public Relations

Finance

60

Avoid harm and injuries to personnel, the environment and financial assets;

Avoid work-related illness ensuing from operations;

Ensure the technical integrity of facilities;

Avoid orders from the Norwegian authorities;

The Company shall achieve these objectives through:

Integrating HSE-related goals, strategies and action plans in all projects and activities managed and carried out

by the Company. Tasks related to HSE and reducing risk of major accidents shall be prioritised at all levels within

the Company; and

Being a good employer. HSE-related issues pertaining to all activities offshore and onshore are to be taken

seriously and duly followed up.

The Company is devoted to securing that all its projects are developed under the highest HSE standards in the oil

industry. The Company’s premise is that all undesired events can be avoided and that developing a good HSE culture and

promote a healthy attitude is important in order to achieve its HSE goals.

During the first quarter of 2014, the Company drilled the PL659 Langlitinden exploration well in the Barents Sea. One

notification was made to the Petroleum Safety Authority (PSA) to inform that the Company had to leave a radioactive

source in the well as it got stuck and was not possible to retrieve. The Environmental Directorate carried out an audit of

the Company during the drilling operations, without finding any deviations. In February 2014, the Ivar Aasen project

experienced a near-miss hazardous situation with a dropped object at a yard on contract with the Company. The

Company has investigated the incident and measures have been implemented.

6.14 Legal and Arbitration Proceedings

In 2012, the Company received a notice from the Oil Taxation Office of possible deviations from the tax assessment for

the income years 2009 and 2010. The dispute relates to whether a rig hire contract for Aker Barents between Aker

Exploration ASA and Aker Drilling ASA was on terms in accordance with the arm’s length principle (transfer pricing). The

Company has argued that the tax authorities lack a legal basis under the Norwegian General Tax Act Section 13-1, among

other things because there was no community of interest between the parties, that there is no income reduction and that

the tax authorities had incorrectly applied the relevant transfer pricing methods. No deviation assessment has yet been

made by the tax authorities.

Other than this, the Company is not aware of any governmental, legal or arbitration proceedings (including any such

proceedings which are pending or threatened) in the 12 months prior to the date of this Prospectus, which may have, or

have had in the recent past, significant effects on the Company’s financial position or profitability.

61

7. THE TRANSACTION

7.1 Overview

The Company has developed rapidly over the last year from an exploration company into a fully integrated E&P company.

This expansion, and in particular the Company’s portfolio of licenses in oil fields under development require substantial

up-front investments. With limited income from producing oil fields, the current capital structure of the Company has

been considered insufficient to carry all costs required to bring the Company’s main fields, Ivar Aasen and Johan

Sverdrup, into the production phase. On this background, the Company has been investigating alternative financial or

structural options for the Company going forward. Because of the Norwegian tax regime, an acquisition of producing

assets on the NCS has been considered as the most favourable option in order to meet the funding requirements for Ivar

Aasen and Johan Sverdrup and in order to reduce the Company’s overall risk profile. This is also in line with the

Company’s strategy to seek attractive M&A options to further grow the Company into a sizeable player on the NCS.

In December 2013, Marathon Oil Corporation publicly announced its intention to exit the North Sea (UKCS and NCS)

though the sale of its UK and Norwegian subsidiaries in a structured bidding process. Following the review of a number of

acquisition targets, the Company decided to participate in the process and offered a bid for Marathon’s total North Sea

activities. After negotiations, the Company entered into the SPA with Marathon Norway Investment Cooperative U.A. on

1 June 2014 whereby the Company, subject to the terms and conditions of the SPA, will acquire 100% of the shares in

Marathon Norway for a cash consideration at closing of approximately USD 2.1 billion (the “Transaction”). The UK

activities will be retained by Marathon Oil Corporation. The cash consideration is based on a gross asset value of USD 2.7

billion and is adjusted for debt, net working capital and permitted distributions prior to closing to a purchase price of

approximately USD 2.1 billion plus interest of 4% per annum from 1 January 2014 until closing. The effective date of the

transaction is 1 January 2014 and it is expected that the transaction will close during the fourth quarter 2014, subject to

regulatory approvals and fulfilment of the other conditions to closing described in section 7.2 “Transaction Structure”

below.

7.2 Transaction Structure

The Transaction will be carried out in two steps. First, the Company will purchase all issued and outstanding shares in

Marathon Norway as further set out in the SPA. Following a successful share purchase, the entire business of Marathon

Norway, including any assets, rights and obligations held by Marathon Norway, will be transferred from Marathon Norway

to the Company upon which the business of Marathon Norway will be incorporated into the Company’s business. Thus, the

purpose of the second step is to gather the business of the two Companies in the same legal entity, inter alia, to obtain

tax synergies of combining the Company and Marathon Norway. Accordingly, the Company will following completion of

the second step have the same legal structure as of the date of this Prospectus.

The closing of the Transaction is subject to the following conditions:(i) approval by the MPE pursuant to section 3-7 and

10-12 of the Norwegian Petroleum Act of the both Transaction and the proposed transfer of all of assets and obligations

of Marathon Norway into the Company on terms reasonably satisfactory to both parties under the SPA, (ii) notification of

the Transaction to the Norwegian Ministry of Finance, (iii) the European Commission having issued a decision under

Article 6(1)(b) or 6(2) of Council Regulation (EC) No. 139/2004 (or being deemed to have done so under Article 10(6) of

the regulation) on terms satisfactory to the Company, (iv) no material adverse effect having occurred between signing of

the SPA and the closing date and (v) certain guarantees for Marathon Norway’s obligations being released and/or

terminated.

A satisfactory completion of the second step of the Transaction will furthermore require (i) consent from to pledge the

licenses taken over from Marathon Norway in accordance with section 6.2 of the Norwegian Petroleum Act, (ii) approval

from MoF that the transfer of Marathon Norway to the Company can be carried out with tax continuity and with full

effect from 1 January 2014 and (iii) that certain third parties under Marathon Norway’s contractual arrangements consent

to transfer to Company of the their contractual arrangements.

The MoF has approved that the transfer of Marathon Norway to the Company can be carried out with tax continuity and

with full effect from 1 January 2014.

7.3 Financing of the Transaction

The Transaction will be financed with a fully committed and underwritten acquisition loan facility for the full cash

consideration (the “Acquisition Facility”). Reference is made also to Section 13.7. The Acquisition Facility has been

provided by BNP PARIBAS, DNB Markets, Nordea Markets and Skandinaviska Enskilda Banken. As part of the overall

refinancing of the Company in relation to the Transaction and the on-going development projects such as Ivar Aasen and

Johan Sverdrup, the Company has also resolved to carry out the Rights Issue, see Section 20 “Terms of the Rights Issue”.

62

The Company has finalised an up to USD 3.0 billion long-term reserve-based lending facility (the “RBL Facility”), to be

provided by certain banks, including the banks that have provided the Acquisition Facility. The RBL Facility will be used

to refinance certain of the Company’s current loan facilities (including the Acquisition Facility, if drawn on prior to the

RBL Facility) and to fund the Company’s on-going operations, including the developments of the Ivar Aasen and the Johan

Sverdrup fields.

7.4 Strategic Rationale for the Transaction

Marathon Norway is considered an excellent strategic fit for the Company. Marathon Norway has strong regional operating

capabilities and strong portfolio of assets with significant production, reserves and upside potential. Marathon Norway’s

assets come with limited capital expenditure commitments, low historic tax balances and high near-term production that

complement the planned production start of the Ivar Aasen and Johan Sverdrup fields. Furthermore, Maraton Norway's

reserves are oil rich and geographically focused, with stable production through the Alvheim FPSO.

Also, following closing of the Transaction, and provided that the business of Marathon Norway is transferred to the

Company as described in Section 7.2 (“Transaction Structure”) above, the Company expects to be in a tax paying position

similar to large E&P companies on the NCS. The Company’s development assets, including the world-class Johan Sverdrup

field, are expected to be significantly de-risked through the ability to immediately recover any variations in capital spend

against current cash flow.

Finally, Marathon Norway’s organisation brings significant operational experience from the Alvheim fields, which adds to

the Company’s exploration and development capabilities. Marathon Norway enjoys a top notch management team with a

strong, proven track record.

The acquisition of Marathon Norway creates a diversified and balanced asset base and creates a strong portfolio to

support future organic growth of the Company in accordance with the Company’s ambition to develop into a full-fledged

E&P company on the NCS. A further description of Marathon Norway is included in Section 8 “Presentation of Marathon

Norway” while the Company following the completion of the Transaction is described in Section 9 “The Company Post

Transaction”.

63

8. PRESENTATION OF MARATHON NORWAY

This Section provides an overview of the business of Marathon Norway as of the date of this Prospectus. The following

discussion contains Forward-looking Statements that reflect the Company's plans and estimates; see Section 4.1 "General

Information—Cautionary Note Regarding Forward-Looking Statements". You should read this Section in conjunction with

the other parts of this Prospectus, in particular Section 2 "Risk Factors" and Section 9 "The Company Following the

Transaction".

8.1 Introduction

Marathon Norway is a private limited liability company involved in exploration and production of oil and gas on the NCS.

Marathon Norway received its first operatorship on the NCS in 2002 and production from the company’s first operated

development commenced in 2008. The company currently holds 13 licenses including 5 of producing licenses that

Marathon Norway operates.

Marathon Norway operates from its office at Fjordpiren in Jåttåvågen outside Stavanger. Marathon Norway’s employs

approximately 270 employees including a fit-for-purpose organisation to support the FPSO operations at the company’s

licenses in the Alvheim area in the North Sea. Out of the 270 employees, 100 are offshore employees while 170 are local

onshore staff. The organisation is inclusive of operations, support and corporate components comprising of highly

competent and diverse teams with an average industry experience of more than 16 years. The workforce is highly

educated with more than 75% having a minimum of a bachelor’s degree and almost half of the onshore staff has an

engineering or geoscience background. Marathon Norway has several competence assurance programmes in place inter

alia a petro technical development program, regulatory compliance training, efficiency improvement training and

installation specific training.

8.2 Field Interests

The Alvheim Area fields lie in Blocks 24/6, 24/9, 25/4 and 25/7 in the Norwegian sector of the northern North Sea,

approximately 220 kilometres north-west of Stavanger, and 190 kilometres east south-east of the Shetland Islands, in a

water depth of approximately 120 meters. The Alvheim Area fields comprise the producing Alvheim field (Boa, Kneler and

Kameleon/East Kameleon structures), the producing Vilje and Volund fields, the Bøyla development and the Viper-Kobra,

Gekko and Caterpillar discoveries.

Below is an overview in the field interests in the Alvheim Area.

Company

Alvheim ex.

Boa Boa unit Vilje Volund Bøyla

Marathon Oil Norge AS ........................................ 65% 57.62% 46.904% 65% 65%

ConocoPhillips Skandinavia AS ............................... 20% 17.73% — — —

Lundin Norway AS ............................................. 15% 13.30% — 35% 15%

Statoil Petroleum AS .......................................... — — 28.853% — —

Total E&P Norge AS ........................................... — — 24.243% — —

Core Energy .................................................... — — — — 20%

Maersk Oil North Sea Limited (UK) ........................... — 9.80% — — —

Bridge Energy (SNS) Limited (UK) ............................ — 1.55% — — —

The locations of the Alvheim Area fields are shown in the figure below.

64

__________

Source: Wood Mackenzie

8.3 Key Assets

Producing Licenses

In 2013, Marathon Norway’s net sales averaged a daily 71,000 boe and 51 million cubic feet of natural gas.

Alvheim (PL036 C, PL088 BS, PL203)

Alvheim is an oil and gas field in the Norwegian sector of the Northern North Sea in a water depth of 122 meters. The

field comprise of the producing Alvheim field (Boa, Kneler, and Kameleon/East Kameleon structures), the producing Vilje

and Volund fields, the Bøyla development and the Viper-Kobra, Gekko and Caterpillar discoveries. The productive horizon

for the Alvheim and Vilje fields is the Middle to Late Palaeocene Heimdal Formation sandstone at a depth of

approximately 2,100 meters.

Alvheim was developed using a purpose-designed FPSO. The development provides for the transport of oil by shuttle

tanker and transportation of gas to the UK Scottish Area Gas Evacuation (“SAGE”) system.

First production began in June 2008. The Alvheim Area Fields have seen significant year-on-year increases in the

estimated recoverable volumes of oil and gas since the initial development of the Alvheim field. Recoverable oil has

increased as a function of greater in-place volumes than previously estimated, development of satellite fields, additional

65

horizontal and multi-lateral wells, and better than anticipated flow rates. Further, improved reliability combined with

optimisation work has increased the production capacity of the FPSO to about 150 thousand boepd up from the original

design of 120 thousand boepd.

The cessation of production of the Alvheim field is estimated to 2031, with subsequent abandonment in the period 2031

to 2033.

Marathon Norway is the operator of the Alvheim with an approximate 65% working interest. The other partners are

ConocoPhillips Scandinavia AS (with a 20% interest) and Lundin Norway AS (with a 15% interest).

Below is a location map of the Alvheim area:

Vilje (PL036 D)

Vilje is located North East of Alvheim at 120 meters water depth. The productive horizon for the Vilje field is the Middle

to Late Palaeocene Heimdal Formation sandstone at a depth of approximately 2,100 meters. The field is tied back to the

Alvheim FPSO through a 12-mile pipeline. Production commenced in 2008. A third production well, Vilje South, is

developed as a subsea tieback to the Vilje field. Production commenced in April 2014.

Marathon Norway is carrying a date for the cessation of production from the Vilje field of 2030, with subsequent

abandonment in the period 2031 to 2033, coincident with the host facilities of the Alvheim Area fields.

Marathon Norway’s holds a 46.9% interest in the license and serves as operator. The other license partners are

Statoil Petroleum AS holding a 28.9% interest and Total E&P Norge AS with a 24.2% interest.

Volund (PL036 D)

Located approximately 5 miles south of Alvheim, Volund is the second field developed as a subsea tieback to Alvheim

firmly established as an oil processing hub. The field, comprising of four production wells and one water injection well,

started producing in 2009 and was utilised as a swing producer when the capacity at the Alvheim FPSO allowed it. The

field was opened for regular production in 2010. The Volund reservoir is a large-scale injective feature, formed by sands

of the Palaeocene Hermod Formation. These have become remobilised and subsequently injected into the overlying

stratigraphy during the Early Eocene, creating steeply dipping “wings” of injected sand dykes from flat sand sills, at

depths from approximately 1,800 meters to 2,000 meters.

Cessation of production from the Volund field is expected in 2028. The plan is to carry out the abandonment of the field

together with other abandonment activities on the Alvheim Area.

66

Marathon Norway holds a 65% interest in Volund and serves as operator, while Lundin Norway AS holds the remaining 35%

interest.

Development Projects

Bøyla (PL340)

The Bøyla field located south of Volund approximately 28 kilometres from Alvheim at a water depth of 120 meters. The

Bøyla reservoir interval is within the Palaeocene Hermod Formation sandstone, a deep marine, channelized submarine fan

system, at a depth of approximately 2,050 meters. The field was discovered in 2009 and the PDO was approved in 2012.

The field is being developed with two horizontal production wells (targeting each of the eastern and western structural

closures) and one water injection well, placed at the eastern edge of the western structural closure. Pilot wells will be

drilled in order to optimize the horizontal section of the western structure producer. In addition, the option to drill the

western producer as a dual lateral well will be assessed following the results of the pilot wells. Both production wells will

be drilled from a drilling centre located to the north of the field. The field will produce via a four-slot subsea production

manifold and tied-back to the Alvheim FPSO via the existing Kneler A production manifold.

Subsurface evaluation and mapping conducted post exploration and appraisal drilling has resulted in a gross mean

commercial volume estimate of 23 million boe with an incremental upside of 10 million boe.

The remaining capital commitment for the development is estimated to NOK 3 191 million in 2014 and 2015. It is

expected that production at Bøyla will commence in the first quarter of 2015.

Cessation of production from the Bøyla field is expected in 2030 together with abandonment activities relating to the

other Alvheim Area fields.

Marathon Norway as operator holds a 65% interest. Core Energy AS holds a 20% interest and Lundin Norway AS holds the

remaining 15%.

Discoveries

Viper-Kobra

Viper-Kobra is located within the Alvheim field approximately three kilometres south of the Kneler structure at a water

depth of 120 to 130 meters. The discovery comprises of the two discoveries Viper and Kobra which are believed to be in

pressure communication. Viper-Kobra will be developed by a multilateral well with one horizontal branch in each

reservoir and a tie-back to the Volund field in the south (which produces via the Alvheim FPSO). The concept selection

was passed by the partnership in April 2014 and is contingent upon a commercial agreement with the Volund license

holders. The Alvheim group has entered into a terms sheet with the Volund group in April and a final agreement is under

negotiation. The Viper-Kobra development was approved by the Board of Directors of Marathon Norway in May. Approval

by the license holders is planned in August/September.

The resource estimate was increased by 37% after a study carried out in connection with the on-going evaluation as to the

feasibility of Viper-Kobra. The revised gross resource estimate for the Viper-Kobra discovery is 6.4 million boe.

Gekko

Gekko is also located in the Alvheim area. An evaluation of the in-place volumes of the reservoir was performed in 2008

giving deterministic volumes of 258 billion scf gas and 25 million stb, however, a study carried out in 2013 resulted in a

gas in-place estimate of 222 billion scf and revealed that the oil zone may be too thin to allow for an economic

development, however, further work is required using the newest seismic dataset to fully evaluate this assumption and

the development potential for Gekko in general. An appraisal well is currently planned for 2016 in order to progress a

potential development scenario. The indicative development plan involves the drilling of two short horizontal gas

producers. A development decision is planned in 2018.

Caterpillar

Caterpillar is located within the PL340 BS prospect south of the Bøyla field. The prospect was drilled in 2011. Caterpillar

will benefit from additional data from the Bøyla development since production history at Bøyla is likely to provide

information about sand connectivity and aquifer support, both of which could simplify a potential Caterpillar

development. Caterpillar may be developed as a second phase to the Bøyla project sharing some of the same

infrastructure. The gross resource estimate for the Caterpillar discovery is 6.4 million boe.

With the discoveries in Marathon Norway’s current asset portfolio, it is expected that commercial activity will have

duration past the year 2030.

67

Exploration Activity

The Alvheim Area fields, including infill targets, discoveries, and prospects, corresponding to the reserves and resources

summary, are shown in the first figure below. The second figure shows exploration opportunities in the Norwegian Sea.

In 2014, Marathon Norway’s exploration focus has been on maturing the prospectivity of the PL653 and PL694 licences in

the Vøring Basin, ahead of drill-drop decisions next year, and near-field opportunities within our operated licences in the

Alvheim area. Marathon Norway was awarded operatorship of PL736S in February, and has released PL330 and PL531

where the Sverdrup and Darwin exploration wells (both dry holes) were drilled in 2013.

69

The table below sets out Marathon Norway’s historical exploration activity from 2011 to 2013.

License Prospect Interest Drilling operator Completion Type Area Content

2011

PL340 BS Caterpillar 65% Marathon Norway 02.02.11 Wildcat North Sea Oil

PL340 BS Caterpillar 65% Marathon Norway 20.02.11 Appraisal North Sea Oil

PL505 Earb -(1) Marathon Norway 10.08.11 Wildcat North Sea Oil/Gas

2013

PL531 Darwin 10% Repsol Exploration Norge AS 10.04.13 Wildcat Barents Sea Dry

PL330 Sverdrup 30% RWE Dea Norge AS 26.10.13 Wildcat Norwegian Sea Dry

__________

(1) License interest transferred to Lundin Norway AS in June 2013

Consortium Interests

Production Licenses PL653 (Block 6607/3) and PL694 (Blocks 6607/4, 5, 6) were awarded to an RWE-led consortium in

2012 and 2013, respectively, as part of the APA 2011 and APA 2012 licensing rounds.

The participating interests of Marathon Norway in these licenses are show in the table below:

License (Block) RWE Marathon Lundin SDFI/Petoro

653 (6607/3) ................................................... 40% 30% 30% —

694 (6607/4, 5, 6) ............................................. 40% 20% 20% 20%

The work commitments for both licenses are the acquisition and reprocessing of 3D seismic data, together with additional

geological and geophysical studies, including basin modelling and AVO analyses. A drill-or-drop decision for PL653 and

PL694 is required in Q1 2015, and Q1 2016, respectively.

Marathon Norway’s 2014 work programme involves the continued seismic processing of 3D data for PL694 and the

progression of regional seismic interpretation and studies across both the PL653 and PL694 licenses. Geological and

geophysical interpretation of both licenses will continue in tandem, and it is likely that a drill-or-drop decision for the

region will be evaluated at the end of Q4 2014. The last Management Committee and Exploration Committee meetings for

the licenses were held in November 2013, with the next set of meetings scheduled for July 2014.

8.4 License Portfolio, Reserves and Resources

Licenses

Marathon Norway’s license portfolio is included in the table below:


036 C ............................................................ Alvheim 65% Marathon Norway 11.06.2021 Production

036 D ............................................................ Vilje 46.904% Marathon Norway 11.06.2021 Production

088 BS ........................................................... Alvheim 65% Marathon Norway 09.03.2022 Production

150............................................................... Volund 65% Marathon Norway 08.07.2024 Production

150 B ............................................................ Volund (West) 65% Marathon Norway 04.08.2016 Initial ext.

203............................................................... Alvheim 65% Marathon Norway 02.02.2032 Production

203 B ............................................................ TFO2012 65% Marathon Norway 08.02.2018 Initial

340............................................................... Bøyla 65% Marathon Norway 17.12.2014 Initial ext.

340 BS ........................................................... Bøyla (Caterpillar) 65% Marathon Norway 17.12.2014 Initial ext.

531............................................................... Darwin 10% Repsol Exploration Norge AS 15.05.2015 Initial

653............................................................... TFO2011 30% RWE Dea Norge AS 03.02.2020 Initial

694............................................................... TFO2012 20% RWE Dea Norge AS 08.02.2021 Initial

736 S ............................................................ TFO2013 65% Marathon Norway 07.02.2022 Initial

Reserves

The tables below sets out the reserves of Marathon Norway as of 31 December 2013:

70

Interest (%) 1P / P90 (low estimate) 2P / P50 (best estimate)

Gross

oil/cond. Gross NGL

Gross gas


Net oil equivalents

Gross oil/cond.

Gross NGL

Gross gas


Net oil equivalents

(mboe) Mton (bcm) (mboe) (mboe) (mboe) Mton (bcm) (mboe) (mboe)

On Production

Alvheim ................. 65.000 % 62.5 0.0 1.0 68.5 44.5 94.0 0.0 1.7 104.8 68.1

Vilje ..................... 46.904 % 16.3 0.0 0.0 16.3 7.7 27.1 0.0 0.0 27.1 12.7

Volund ................... 65.000 % 10.9 0.0 0.1 11.9 7.7 20.9 0.0 0.2 22.3 14.5

Total ..................... 59.9 95.4

Approved for Development

Alvheim ................. 65.000 % 8.3 0.0 2.0 20.6 13.4 19.7 0.0 2.6 36.2 23.6

Vilje ..................... 46.904 % 0.9 0.0 0.0 0.9 0.4 2.6 0.0 0.0 2.6 1.2

Bøyla ..................... 65.000 % 12.8 0.0 0.1 13.4 8.7 21.6 0.0 0.2 22.8 14.8

Total ..................... 22.5 39.6

Total Reserves 31.12.2013 82.4 135.0

The Alvheim Area comprises the Kneler, Boa, Kameleon and East Kameleon. At the end of 2013, the Alvheim development

included 12 producing wells, three temporarily shut-in wells and two water disposal wells.

The above reported reserves for Marathon Norway correspond to the Marathon Norway’s RNB (revised national budget)

reporting for 2014 to the MPE. Marathon Oil Corporation, Marathon Norway’s parent company, is listed on the New York

Stock Exchange (under the ticker code “MRO”) and thus reports to the US Securities and Exchange Commission (SEC). The

rules governing the reporting to SEC is based on the Society of Petroleum Engineers’ (SPE’s) guide “Petroleum Resources

Management System”.

8.5 Material Contracts

In January 2011, Marathon Norway acquired interests in two Dutch companies, Marathon Dutch Investment LLC (100%) and

Marathon Dutch Investment Coöperatief U.A. (99%) from Marathon Petroleum Norway Holding C.V., a wholly owned

subsidiary of Marathon Oil Corporation. The Dutch companies indirectly hold interests in various Canadian oil sands

projects. With effect from 1 April 2014, the two subsidiaries were sold to Marathon Norway’s parent company, Marathon

Norway Investment Cooperatief U.A. Consequently, Marathon Norway no longer has interest relating to Canadian oil sands

projects and neither are these a part of the Transaction.

Other than the above mentioned agreement relating to the Canadian oil sands, neither Marathon Norway nor its

subsidiary Alvheim AS has entered into any material contracts outside the ordinary course of business during the last two

years.

Marathon Norway has entered into a Contract of Affreightment with Navion Offshore Loading AS as owner (assigned by

novation to Teekay Navion Offshore Loading Pte Ltd) and the other interest owners of production from the Alvheim FPSO.

The agreement defines the scope of services for the loading, transporting and delivery of crude oil. As charterers,

Marathon Norway and the other interest owners are entitled to compensation from the owner in case of late arrival of a

chartered vessel. Charter hire is based on a daily rate.

Drilling services are provided by the mobile drilling rig “Transocean Winner” under a drilling contract with Transocean

Offshore (North Sea) Ltd NUF.

Marathon Norway has entered into a drilling contract with the rig Transocean Winner providing the company with drilling

capacity for the following years. The table below sets out the drilling schedule for the rig as of August 2013: See also

Section 8.7 “Rig Capacity and Access”.

In 2012, Marathon Norway entered into a call-off agreement with Technip Norge AS for the delivery of project

management, engineering, procurement, fabrication and offshore work. The agreement gives Marathon Norway the right

to issue five call-off orders requesting relevant contractor services.

71

Aker Solutions Subsea AS provides contractor work to Marathon Norway under a frame agreement setting out the terms

and provisions of any work undertaken by the contractor. Service under the agreements is provided upon a mutual

agreement between the parties of the scope of each job order issued.

Vallourec and Mannesmann Oil and Gas (UK) Ltd is providing oil country tubular goods (OCTG services) and other

associated services to Marathon Norway under a framework agreement entitling Marathon Norway to several call-offs.

Marathon Norway has the option to extend the agreement until July 2015.

Marathon Norway is provided different well site and associated services and equipment by Schlumberger, in which the

company has entered in to several material agreements with including sand control and chemical management.

Swaco Norge AS is providing drilling fluid and services to Marathon Norway under a master services agreement entered

into in 2010. Marathon Norway has issued a large number of job orders under the agreement which expires in 2015 plus a

1 x 1 extension option granted Marathon Norway.

Further, Marathon Norway has entered into agreement for the provision of fishing, plug, abandonment and whipstock

services with three call-off options with Smith International Norway AS.

Modification and maintenance services are provided to Marathon Norway by Fabricom AS. The agreement remains in force

until 2017.

In 2012, Marathon Norway entered into a time charter party with Simon Møkster Rederi AS (as owner) and Simon Møkster

Shipping AS as manager for the charter of the vessel M/V “Stril Orion”. The vessel is a platform supply vessel and

consideration is based on a daily hire.

Emergency services are provided by the emergency response and rescue vessel “Esvagt Contender” under an agreement

with Esvagt ASA.

Helicopter services are provided by Bristow Norway AS under a form of agreement entered into in 2010. The agreement

entitles Marathon Norway to a fleet of several different aircrafts either required for the transportation of personnel and

freight.

In 2010, Marathon Norway entered into two service agreements with GE Energy (Europe BV and Norway AS respectively)

for turbine generator maintenance services. The agreements have 13 year duration.

Marathon Norway has entered into several agreements with Advantec AS, including a framework agreement for

procuration of construction work,

Other material contracts include:

Service agreement with Vetcogray Inc. which includes a number of job orders which may be issued until the

agreement expires in 2022;

Catering agreement with ESS Support Services AS for offshore catering services expiring in 2018;

Call off agreement for onshore and offshore services with Kaefer Energy AS expiring by the end of the year 2015;

Framework agreement with Kongsberg Maritime AS for onshore services;

The lease agreement relating to Marathon Norway’s offices in Stavanger, as further described in Section 8.8

below;

Service agreement with Wood Group Kenny for onshore and offshore services. The agreement includes several

call-off options and remains in duration on year at a time until terminated by one of the parties.

Delivery agreement with Statoil fuel & Retail Norge AS (as seller) for the delivery of Marine Gasoil (MGO) to

Marathon Norway.

A framework agreement with subsequent job orders with Advantec AS.

A master service agreement with Franks International AS for onshore and offshore services including casing tools

and running services. The agreement remains in force until 2017.

72

Procurement and fabrication agreement with Nymo AS relating to the Boa Extension Manifold. The agreement

expires in 2018.

Framework agreement with Deepocean AS for project management, engineering, design, procuration and

offshore work. The agreement expires in 2019.

Agreement with Belvalves for large bore valves.

8.6 Conditions Relating to the Licenses

Marathon Norway’s licenses are subject to the following work obligations:

PL150B, Volund (West). The initial phase has been extended until 4 August 2014. The licensees must drill or drop

(“DoD”) within end of 2014.

PL203B, TFO2012. The remaining work obligations include seismic reprocessing, G&G studies and DoD within 8

February 2016, and drilling of 1 well within 8 February 2018.

PL340, Bøyla. An extension of areas not covered by the Bøyla PDO is conditional upon presenting a PDO for such

areas/resources. The suggested progress plan is to be delivered to the MPE in due time before the expiry date of

the (extended) initial phase.

PL340 BS, Bøyla Caterpillar. See description of License 340 above.

PL736S, TFO2013. The remaining work obligations include seismic reprocessing and DoD within 7 February 2017,

and drilling of 1 well within 7 February 2019.

PL531, Darwin. Marathon Norway holds a 10 % interest in the license. Repsol Exploration Norge AS is the

operator. Marathon Norway has notified the other parties of its intention to withdraw from the license as the

work obligation is fulfilled and the license is soon to expire.

PL653, TFO2011. The remaining work obligations include seismic reprocessing, G&G studies and DoD within 3

February 2015, and drilling of 1 well within 3 February 2017.

PL694, TFO 2012. The remaining work obligations include seismic acquisition, seismic reprocessing, G&G studies

and DoD within 8 February 2016, and drilling of 1 well within 8 February 2018.

There are no outstanding work obligations related to PL036 C, PL088 BS and PL203 (Alvheim), PL036D (Vilje) and PL150

(Volund).

8.7 Rig Capacity and Access

Marathon Norway has entered into a drilling contract for the rig “Transocean Winner” providing the company with drilling

capacity for the following years. The table below sets out the drilling schedule:

73

The drilling contract with for “Transocean Winner” is further described in Section 8.5 “—Material Contracts”.

8.8 Property, Plant and Equipment

Marathon Norway has entered into a lease agreement for the lease of office premises in the Fjordpiren area in Stavanger.

The agreement includes staff restaurant services, parking, locker rooms and lease of additional office space. The lease is

due to expire on 31 December 2016, subject to an optional extension of an additional five years.

Yearly costs are NOK 15,698,155 including office rent, electricity costs, shared services, parking and locker rooms and

VAT. Rent is adjusted according to the consumer price index.

8.9 Research and Development, Patents and Licenses

Marathon Norway does not hold any single trademark, patent, group of related trademarks or patents considered critical

or essential to its business.

8.10 Organisation

The organisation of Marathon Norway is illustrated in the figure below:

Regional Vice

President (E)

Executive Assistant

Supply Chain

Manager (E)Subsurface &

Exploration Manager

Deputy Managing

Director

Drilling &

Completions

Manager (E)

Operated Assets

Manager

Commercial

Manager

F&A ManagerHR ManagerIT ManagerCommuncations

ManagerHESQ Manager

74

8.11 Shares and Share Capital

The share capital of NOK 6,756,500 consists of 67,565 shares of NOK 100 each. All shares have equal rights. All shares

currently owned by Marathon Norway Investment Coöperatief U.A.

8.12 Selected Financial Information of Marathon Norway

Below is selected NGAAP financial information of Marathon Norway:

NOK million

Year

Ended

31 December

Three months Ended

31 March

(unaudited)

2013 2012 2011 2014 2013

Statement of Comprehensive Income Data

Operating revenue ............................................................. 18,672.7 21,157.3 20,211.0 4,130.2 5,089.6

Results from operating activities ............................................. 14,730.7 16,973.9 15,237.1 3,237.4 4,155.8

Net finance costs ............................................................... 1,025.7 591.6 (113.9) 90.7 (86.8)

Profit of the year ............................................................... 2,446.8 3,523.6 3,455.3 727.6 1,042.4

Statement of Financial Position Data

Non-current assets ............................................................. 10,562.7 11,413.1 11,978.4 10,692.0 11,679.3

Current assets ................................................................... 5,328.3 6,266.9 8,665.8 6,626.9 6,094.7

Total assets ..................................................................... 15,891.1 17,680.0 20,644.1 17.318.8 17,774.0

Non-current liabilities ......................................................... 5,456.1 5,139.1 7,990.0 3,387.6 5,277.4

Current liabilities ............................................................... 10,163.6 11,826.3 11,823.2 10,767.1 10,739.7

Total liabilities.................................................................. 15,619.7 16,965.4 19,813.2 16,320.0 16,017.1

Total equity ..................................................................... 271.4 714.6 830.9 999.0 1,756.9

Total equity and liabilities .................................................... 15,891.1 17,680.0 20.644.1 17,318.8 17,774.0

Statement of Cash Flow Data

Net cash from/(used in) operating activities ............................... 3,959.2 6,164.0 8,725.2 1,785.1 2,176.0

Net cash from/(used in) investing activities ................................ (1,042.6) (2,121.5) (9,420.1) (1,504.2) (306.4)

Net cash from/(used in) financing activities ............................... (3,200.0) (4,000.0) (4,000.0) 0 (2,100.0)

Net increase/(decrease) in cash and cash equivalents .................... (283.4) 42.5 (4,694.9) 280.9 (230.4)

Cash and cash equivalents at the end of the period....................... 366.8 650.2 607.7 647.7 419.9

8.13 Legal and Arbitration Proceedings

Marathon Norway has some disputes with the Norwegian tax authorities, mostly relating to transfer pricing issues. Under

the SPA, Marathon Norway Investments Cooperatief U.A. has agreed to pay the Company an amount equal to any tax

liability arising in respect of, by reference to or in consequence of (i) any income, profits or gains earned, accrued or

received on or before 31 December 2013 and (ii) any event that occurred on or before 31 December 2013 or is deemed for

any tax purposes to have occurred on or before 31 December 2013.

Other than this, the Company is not aware that Marathon Norway has any governmental, legal or arbitration proceedings

(including any such proceedings which are pending or threatened) in the 12 months prior to the date of this Prospectus,

which may have, or have had in the recent past, significant effects on the Company’s financial position or profitability

after the Transaction.

8.14 Related Party Transactions

Marathon Norway is part of a cash pooling arrangement, administered by the 100% affiliate Marathon International Oil

Portfolio Coöperatief U.A. According to the annual report from 2013, by 31 December 2013 the receivable against

Marathon Norway was about NOK 2,449 million. Marathon Norway has no joint and several liability or guarantees relating

to the cash pooling arrangement.

75

9. THE COMPANY FOLLOWING COMPLETION OF THE TRANSACTION

This Section provides information about the prospects of the results of the Transaction and its expected implications on

the Company following the Transaction and should be read in conjunction with other parts of the Prospectus, in

particular Section 8 “Presentation of Marathon Norway” and Section 12.6 “Selected Financial Information—Unaudited

Pro Forma Financial Information”. The following discussion contains Forward-looking Statements that reflect the

Company’s plans and estimates. Factors that could cause or contribute to differences to these Forward-looking

Statements include, but are not limited to, those discussed in Section 2 "Risk Factors" and Section 4.1 "General

Information—Cautionary Note Regarding Forward-Looking Statements".

Upon the successful completion of the Transaction, the Company will consist of the total of the Company’s current

business and the entire business of Marathon Norway (including all licenses, rights and obligations) as described in Section

6 and 8 respectively. Consequently, the Company will become a major E&P company on the NCS with a portfolio

consisting of 87 licenses, making it one of the largest license holders on the NCS. In terms of output, the Company will be

one of the largest listed independent E&P companies in Europe – a unique position for a relatively new company.

Following the Transaction, the Company will take over Marathon Norway’s entire organisation, and will thus have more

than 450 employees. The head office will still be in Trondheim with registered address Munkegata 26, 7011 Trondheim,

Norway. In addition to the current offices in Trondheim, Oslo and Harstad, the Company will also have offices in

Stavanger.

The License portfolio will be well diversified with 72 licenses in the North Sea, 4 licenses in the Norwegian Sea and 11 in

the Barents Sea. The portfolio includes both ownership interest in producing fields, developments prospects and

discoveries that may be developed in the years to come.

The acquired reserves all come from the Alvheim Area in the North Sea, which will be a strategically important area for

the Company. Alvheim, Volund and Vilje are all producing well, whereas Bøyla is expected to start producing in Q1 2015.

The Alvheim Area has historically showed increasing 2P reserves and high quality operations with an average FPSO uptime

of 98 per cent. Coupled with the Company’s Ivar Aasen and Johan Sverdrup fields and the Company’s exploration

portfolio, the production from the Alvheim Area provides a balanced portfolio across all stages of the E&P life cycle.

At year-end 2013, the Company had 202 million boe of 2P reserves (relating to the current licenses of the Company).

However, following submittal of the PDO for Johan Sverdrup scheduled for submission in February 2015, reserves will

increase significantly. In addition, the Company’s contingent resources amounted to 101 million boe, excluding Johan

Sverdrup. The identified upside relating to the current licenses of Marathon Norway is estimated at approximately 80

million boe. Combined 2013 production for the two companies amounted to approximately 84 thousand boepd.

The Company has over the last years built up a robust organisation when it comes to development and exploration.

Marathon Norway will not only add to these teams, but will also complement the Company with significant operational

experience from the Alvheim fields. In total, the Company will become a modern and dynamic E&P company that will

build on the combined capabilities of the two organisations.

Following the Transaction, the Company will be better positioned for future growth both in mature and frontier areas of

the North Sea, the Norwegian Sea and the Barents Sea. It is also important to note that frontier areas also exist in the

North Sea usually perceived as mature, e.g. the Deep Alvheim prospect which could obtain volatile oil and/or gas

condensate. Other potential targets include the Boa West and the Boa Kameleon South areas as well as the prospect

Alvheim Attic Oil. Three short to midterm building blocks will drive this growth. Firstly, the acquired Bøyla field tied back

to Alvheim will come on stream in 2015, followed by Ivar Aasen in 2016 and Johan Sverdrup in 2019. The company will

also continue to be an active explorer in the APA rounds and the License Rounds and will continue to mature the long list

of discoveries made by the two combined companies.

The Company will continue to create value on the NCS. Following the Transaction, the Company will be a significant

producer of hydrocarbons. This will enable the “new” Company to bring high-return fields in production, such as Johan

Sverdrup and Ivar Aasen. The company will also continue to be an active explorer and will work to develop other robust

fields into production.

During the first four months of 2014, total production from the Company and Marathon Norway amounted to 72,300

boepd. For the full year 2014, it is anticipated that combined production will be in the range of 55,000 – 65,000 boepd.

76

9.1 Strengths and Strategies following Completion of the Transaction

Vision and Strategy

The Company’s vision as outlined in Section 6 “Business Overview” is to always be ahead to create value on the NCS

through exploration, development and production. The Company intends to remain a pure play NCS company as it

believes that there is still high potential to find considerable resources to the mutual benefit of Shareholders, employees

and the Norwegian society at large. The acquisition of the entire business of Marathon Norway helps the Company to

significantly grow in line with its strategic goals.

Strengths

Complementarity of production and reserve profiles

The Company’s production outlook in the coming years is represented by low, declining production until the Ivar Aasen

field comes on stream, scheduled for late 2016. The Gina Krog field is expected to add some additional production in

2017, but the next big ramp-up in production is expected to come with first oil from the Johan Sverdrup field, scheduled

for late 2019. Details concerning the Company’s producing assets and development projects are outlined in Section 6

“Business Overview”. On the other hand Marathon Norway’s production outlook in the coming years is characterised by

high near-term production with natural decline. The Bøyla field is scheduled for start-up in early 2015, partially arresting

the decline from its other fields. The combined production outlook for the Company and Marathon Norway is thus one of

inclining production over the next ten years (please see the below figure).

During the first four months of 2014, total production from the Company and Marathon Norway amounted to 72,300

boepd. For the full year 2014, it is anticipated that combined production will be in the range 55,000 – 65,000 boepd.

Strong cash flows from existing production

The combination of Marathon Norway’s current production with the Company’s development programme increases the

combined company’s financial flexibility and materially accelerates current cash tax relief on its investments. The

combination reduces the risk associated with timing and cost of development projects as the combined company will be

in a tax-paying position. Therefore, following completion of the Transaction, the Company is likely to have strengthened

its operational and financial capabilities ahead of its major development projects.

2014 2025

Det norske

Marathon Norge

Combined

Base case

Upsides

Reserves & cont ingent resources end 2013 (mmboe)

66

136

20277

24

101

Det norske Marathon Norge Combined

2C contingent resources - Sverdrup

2C contingent resources (ex. Sverdrup)

2P reserves

¹ Based on Y/E 2013 Annual statement of reserves for Det norske and NPD volumes for the Marathon Norge fields. Contingent resources estimated by Det norske

77

Dynamic and entrepreneurial growth platform

Marathon Norway’s organisation brings significant operational experience from the Alvheim fields, which adds to the

Company’s exploration and development capabilities. Furthermore, the increased size broadens the set of opportunities

and ability to manage the combined company’s portfolio.

The combination creates a modern, full cycle E&P company that will build on the combined capabilities of the two teams.

Management thinks that the combined company consists of a good mix of younger talent and experienced people with

decision making being fast and un-bureaucratic. Visible leaders that are hands-on and operationally involved create a flat

structure with a high degree of openness, cooperation and informality.

Strong Norwegian foothold and relationships

The Company, as a pure Norwegian domicile company, has strong relationships to and experience with the Norwegian oil

industry, including authorities, oil service suppliers, government and other key stakeholders. The majority of the

Company’s employees come from other key Norwegian players such as Statoil, Hydro and Saga, as well as from the

political environment. Excellent knowledge of the Norwegian regulations, tax systems and NORSOK standard provides the

Company with strong basis for safe operations and conducting business.

Ownership structure and license partners

Through Aker ASA's approximately 49.99% indirect ownership in the Company, the Company is backed by a long term

industrial owner with a strong balance sheet, and a strategy of supporting the Company with their pro-rata share of

capital requirements going forward trough the planned development of Johan Sverdrup. Following the discovery of Johan

Sverdrup, the Company has become one of the most valuable investments for the Aker group.

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Below is an overview of the Company’s licenses following completion of the Transaction.

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10. INDUSTRY OVERVIEW

This Section discusses the industry and markets in which the Company operates. Certain of the information in this

Section relating to market environment, market developments, growth rates, market trends, industry trends,

competition and similar information are estimates based on data compiled by professional organisations, consultants and

analysts; in addition to market data from other external and publicly available sources, and the Company’s knowledge

of the markets, see Section 4.2 "General Information—Presentation of Market Data and Other Information—Sources of

Industry and Market Data". The following discussion contains Forward-looking Statements, see Section 4.1 "General

Information—Cautionary Note Regarding Forward-Looking Statements". Any forecast information and other Forward-

looking Statements in this Section are not guarantees of future outcomes and these future outcomes could differ

materially from current expectations. Numerous factors could cause or contribute to such differences, see Section 2

"Risk Factors" for further details.

10.1 Energy Overview

The dynamics of energy markets are determined more and more by the emerging economies. The International Energy

Agency’s (“IEA”) World Energy Outlook 2013 report1, global energy demand will increase by one-third from 2011 to 2035

in the New Policies Scenario. The report further predicts that emerging economies will account for more than 90% of

global net energy demand growth. While Asian energy demand growth is led by China this decade, it shifts towards India

and, to a less extent, Southeast Asia after 2025. The Middle East emerges as a major energy consumer, with its gas

demand growing by more than the entire Economic Co-operation and Development (“OECD”). The Middle East is the

second-largest gas consumer by 2020 and third-largest oil consumer by 2030, redefining its role in global energy markets.

Non-OPEC supply plays the major role in meeting net oil demand growth this decade, but OPEC plays a far greater role

after 2020. The United States is the world’s largest oil producer from 2015 to early 2030s; light tight oil and efficiency

policies reduce rapidly its reliance on imports. Brazil becomes a major oil exporter, delivering one-third of global supply

growth to 2035. China is about to become the largest oil importer and becomes the largest oil consumer around 2030. The

European Union stays the largest gas importer, but demand returns to 2010 levels only as 2035 approaches.

Primary energy demand is projected in BP’s Energy Outlook 2035 report to increase by 41% between 2012 and 2035, with

growth averaging 1.5% per annum (“p.a.”). Growth slows, from 2.2% p.a. for 2005-2015, to 1.7% p.a. 2015-2025 and just

1.1% p.a. in the final decade. The world is leaving a phase of very high energy consumption growth, driven by the

industrialisation and electrification of non-OECD economies, notably China. The 2002-2012 decade recorded the largest

ever growth of energy consumption in volume terms over any ten year period, and this is unlikely to be surpassed in our

timeframe. There is a clear long-run shift in energy growth from the OECD to the non-OECD. Virtually all (95%) of the

projected growth is in the non-OECD, with energy consumption growing at 2.3% p.a. 2012-2035. OECD energy

consumption, by contrast, grows at just 0.2% p.a. over the whole period and is actually falling from 2030 and onwards.

China has emerged as the key growth contributor, but by the end of the forecast China’s contribution is starting to fade.

India’s contribution grows, almost matching that of China in the final decade of the forecast.

Below is an overview of world energy consumption by region.

__________

Source: BP (www.bp.com/energyoutlook) “BP Energy Outlook 2035”, January 2014

1 The “World Energy Outlook” report, November 2013, is available for purchase at www.iea.org

http://www.bp.com/energyoutlook

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Energy Demand

Fossil fuels remain the dominant sources of primary energy worldwide in BP’s Energy Outlook, accounting for 81% of the

overall energy consumption in 2035, a decrease from approximately 86% in 2012. According to IEA, oil is expected to be

the slowest growing fuel over the outlook period (13% growth), while renewables is has the most rapidly growth (77%).

BP expects energy consumptions grow less rapidly than the global economy, with gross domestic product (“GDP”) growth

averaging 3.5% p.a. 2012-2035. As a result energy intensity, the amount of energy required per unit of GDP, declines by

36% (1.9% p.a.) between 2012 and 2035. Fuel shares evolve slowly. Oil’s share continues to decline, its position as the

leasing fuel briefly challenged by coal. Gas gains share steadily. By 2035 all the fossil fuel shares are clustered around 27%

and for the first time since the Industrial Revolution there is no single dominant fuel. Among non-fossil fuels, renewables

(including biofuels) gain share rapidly, from around 2% today to 7% by 2035, while hydro and nuclear remain fairly flat.

Renewable overtake nuclear in 2025, and by 2035 they match hydro.

__________


Energy Supply

According to BP’s Energy Outlook, world primary energy production grows at 1.5% p.a. from 2012 to 2035, matching

consumption growth. Growth is concentrated in the non-OECD, which accounts for almost 80% of the volume increment.

There is growth in all regions except Europe. Asia Pacific shows both the fastest rate of growth (2.1% p.a.) and the largest

increment, providing 47% of the increase in global energy production. The Middle East and North America are the next

largest sources of growth, and North America remains the second largest regional producer. There is expansion across all

types of energy, with new energy forms playing an increasingly significant role. Renewables, shale gas, tight oil and other

new fuels sources will in aggregate grow at 6.2% p.a. and contribute 43% of the increment in energy production to 2035.

The new growth of new energy forms is enabled by the development of technology and underpinned by large-scale

investments. BP’s Outlook assumes that the right competitive and policy conditions are in place to support that

investment and technical progress. Below is a graphic of the energy production on a world-wide basis.


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__________


The Oil Price

As of June 4, 2014 the oil price was USD 108.4 per barrel (Brent Crude Oil), approximately 13% above the average price of

USD 95.9 per barrel over the last five years and 33% above the average price of 81.6 the last ten years. All-time high

came back in July 2008 with a price of USD 146.1 per barrel. Strong demand for energy combined with limited supply,

OPEC’s successful oil market strategy plus supply disruption in key regions like Russia, the Middle East and West Africa,

and the risk of gas crisis in North America were the main reasons behind the record-high prices in 2008. For the time

being, key drivers in the market are growth in US shale oil production, lower Libyan production than expected and

differing views on future Chinese oil demand.

The figure below illustrates Brent crude oil price last ten years.

__________

Source: Factset as of June 2014

The oil price is affected by a number of factors, including changes in supply and demand, OPEC regulations, weather

conditions, regulations from domestic and foreign authorities, political and economic conditions and the price of

substitutes.


82

It should be noted that the oil market is dynamic and that the demand for oil to some extent is inversely linked to the

price. Longer periods of high oil prices can therefore lead to increased use of alternative energy sources at the cost of oil

demand.

Twice a year, or more frequently if required, the Oil and Energy Ministers of the OPEC countries meet to decide on the

organisation’s output level and consider whether any action to adjust output is necessary in the light of recent and

anticipated oil market developments.

10.2 E&P Spending

According to DNB Markets Equity Research’s E&P spending analysis in the Deepwater development on HOLD report from

March 20142, offshore E&P spending has increased by 18% compound annual growth rate (CAGR) in the period from 2010

to 2013. This led to increased capacity utilisation in most oil services segments from seismic services, drilling, supply

vessel services, subsea services and demand for deep-water equipment and services. In many segments, like for drilling

rigs, the market has experience record high day rates and utilisation levels, resulting in increased upgrading and

newbuilding activity.

In the report, DNB Markets estimates a 4% growth in global E&P spending for 2014 and a moderate 1% growth for offshore

E&P spending. The figure below illustrates DNB Markets Equity Research’s estimated development in the global E&P

spending for oil and gas companies.

Below is an overview of the global E&P spending from 1975 up to 2014e.

__________

Source: DNB Markets, Bloomberg, March 2014

DNB Markets Equity Research has noticed a shift in the oil companies’ rhetoric regarding the E&P spending trends, with

several of the international oil companies being more vocal about slowing down E&P spending growth. International oil

companies are turning their focus from production growth to value management; a common theme among the oil majors

at the Q3 2013 results presentations was a focus on capital discipline and free cash flow. DNB Markets Equity Research

believes the shift in focus is a result of oil companies failing to deliver on both production growth and shareholder returns

despite very high investments levels over the last decade.

10.3 The Norwegian Continental Shelf

The Norwegian Continental Shelf, the NCS, is the continental shelf over which Norway exercises sovereign rights as

defined by the United Nations Convention on the Law of the Sea and the Norwegian Petroleum Act. Its major parts are

the shelves of the North Sea, Norwegian Sea and Barents Sea.

The area of the shelf is four times the area of Norway mainland and constitutes about one-third of the Europe continental

shelf, and in 2012, Norway was the world’s third largest gas exporter and the tenth largest oil exporter.

2 Not publicly available.

83

Below is an overview of the status of the different areas on the NCS.

__________

Source: Norwegian Petroleum Directorate (www.npd.no), Facts 2014

Production on the NCS

The discovery and subsequent development of Ekofisk in 1969 marked the beginning of oil exploration and production on

the NCS. Although most of the NCS has reached its mature phase, there are still large reserves in the province remaining

to be found or produced. As of year-end 2013, the Norwegian Petroleum Directorate (“NPD”) estimates in its annual

resource accounts, that the total recoverable resources on the NCS are approximately 89.1 billion boe. Out of this,

approximately 38.9 billion boe is produced. This is illustrated in the figure below, which shows the distribution of

petroleum resources by maturity as of 31 December 2013.

http://www.npd.no/

84

__________

Source: Norwegian Petroleum Directorate (www.npd.no), Facts 2014

The oil production from existing fields on the NCS has peaked and is declining. Oil production in 2013 was 84.9 million

Sm3 (1.5 million bbls per day), compared with 89.2 million Sm3 (1.5 billion bbls per day) in the previous year. 78 fields

contributed to the total oil production in 2013, in addition to test production from one discovery.

Continued investments in the drilling of new development wells and other measures to improve recovery are important

for the oil production on the NCS.

In 2013, 108.7 billion Sm3 gas was sold. This represents a reduction of 5.8 billion Sm3 compared with 2012 (five per cent).

The NPD expects gas output from existing fields to increase somewhat during the next five years.

In 2013, 17.7 million Sm3 (0.3 million boepd) NGL and 4.0 million Sm3 (0.1 million boepd) condensate was produced on the

NCS.

Below is an overview of the production development, where 1 Sm3 = 6.29 barrels.

__________

Source: Norwegian Petroleum Directorate (www.npd.no), Fields and Discoveries 2014

http://www.npd.no/

85

In order to increase the production and tap the resource potential on the NCS, the oil industry has to increase its

exploration efforts. The number of wildcats (oil wells in an unexplored area) and appraisal wells being drilled on the NCS

were historically low until 2005, but started to increase thereafter, due to the Norwegian government’s ambition to

increase drilling on the NCS. The number of spudded exploration wells reached a record high of 65 wells in 2009. In 2013,

45 wildcats and 14 appraisal wells were commenced. NPD forecasts 52 exploration wells in 2014. The development in

exploration activity is illustrated in the figure below.

__________

Source: Norwegian Petroleum Directorate (www.npd.no), The Shelf 2013

Measures for increasing production on the NCS

Production from existing oil fields on the NCS is declining, and a step-up in exploration activity combined with increased

production from existing fields, is needed to reach government stated production goals. Among the measures taken to

stimulate increased exploration are (i) a more flexible and effective exploration policy (i.e. increasing acreage available

for exploration and increasing the number of licenses awarded), (ii) increasing the number of companies on the NCS, and

(iii) tax incentives to encourage companies to increase the exploration activity. These measures are briefly described in

the following.

(i) Increased acreage

A first measure taken by the government to increase the activity on the NCS was to increase the acreage available for

exploration, both in mature and immature areas. To increase the activity in mature areas the Norwegian government

started to award new production licenses annually in 2003, the APA. Since the first APA round in 2003, the APA acreage

has been expanded several times and the APA 2013 comprised a total of 18,136 km2. In the APA 2013 the government

awarded 65 licenses, while the numbers were 51, 60, 49, 38, 35 and 52 in APA12, APA11, APA10, APA09, APA08 and

APA07, respectively.

(ii) Increased number of companies on the NCS

In addition to increasing the acreage available for exploration, the Norwegian government also expressed its desire to

increase the number of companies on the NCS. The Norwegian government acknowledged that the interest among many

of the established players for mature areas on the NCS is moderate, and have stressed the importance of new and

creative solutions to increase the production on the NCS. The criteria for award of licenses in APAs and Licensing Rounds

are factors like technical quality of the application, demonstrated quality of the company and the proposed work

program. There is no upfront payment for the production licenses, however, a fee of NOK 116,000 applies for the

handling of the license application, which is awarded by the MPE based on a full technical evaluation by the NPD. The

MPE is required to make its decision on the basis of objective, non-discriminatory and published criteria. The authorities

have a strong focus on attracting technically competent companies that can contribute to the development of the NCS

and have therefore introduced a prequalification system. All new oil companies have to be prequalified by the authorities

before they can be awarded or acquire interests in production licenses. This system ensures that only companies with

86

proper and relevant competence and system in place, as well as necessary financial resources, are approved as licensees

on the NCS. The figure below shows the number of players on the NCS from 2000 measured against increased exploration

activity.

The figure below shows the number of players and spudded exploration and appraisal wells 2000 – 2013.

__________

Source: Factpages Norwegian Petroleum Directorate (factpages.npd.no), DNB Markets

iii) Tax incentives

Companies which are not in tax paying position may annually claim a refund from the State of the tax value of direct and

indirect cost, except financial charges, incurred in exploration for petroleum resources. The tax value is set to the total

of direct and indirect costs multiplied by the tax rate, currently 78 per cent. The refund will reduce the tax loss carry

forward correspondingly. The amount of exploration cost may not exceed the annual net loss from the petroleum

activities of the taxpayer, to ensure that the costs are not already set off against taxable income.

Increased interest for the Northern waters in Norway

There is a strong interest for new acreage offshore Mid and Northern Norway, areas which are still regarded as frontier

areas on the NCS. An increasing number of players are building up acreage positions in the Norwegian Sea and the Barents

Sea. In the 22nd licensing round awarded in the spring of 2013, most of the large players on the NCS applied for acreage

in these areas, hereof 5 of 7 Super Majors, 8 of 9 Utilities and 14 of 20 Large & Mid Caps. 29 companies were awarded

licenses out of the 36 companies that applied. The 23rd licensing round was started August 2013 with invitations to

nominate areas on the shelf. This licensing round will most likely focus on the Barents Sea.

The figure below shows the applicants in the last numbered rounds.

__________

Source: Norwegian Petroleum Directorate (www.npd.no), DNB Markets

87

In the Barents Sea, 37 companies hold licenses, of which 17 are active as operators. Statoil Petroleum AS and Petoro AS

are the dominant players, while the Company has a significant acreage position.

The figure below shows the largest players in the Barents Sea.

__________

Source: Factpages Norwegian Petroleum Directorate (factpages.npd.no), DNB Markets

Compared to the North Sea both the Norwegian Sea and in particular the Barents Sea are in a less mature phase with 72%

of the estimated recoverable resources yet to be discovered. As of year-end 2013, the NPD estimates total remaining

recoverable resources in these areas to be around 22.7 billion boe, representing 45% of the total estimated remaining

resources on the NCS. Of the 22.7 billion boe, 11.7 billion boe is estimated in the Norwegian Sea and 10.9 billion boe in

the Barents Sea.

The figure below shows total resources in North.

__________

Source: Norwegian Petroleum Directorate Facts 2014 (www.npd.no), DNB Markets

Unopened areas

There are still large areas of the NCS that the Norwegian Parliament has not yet opened for petroleum activities. This

applies to the entire northern Barents Sea, the north-eastern Norwegian Sea (Troms II, Nordland VII and parts of Nordland

IV, V and VI), Skagerak and the areas surrounding Jan Mayen. The general rule for unopened areas is that the Norwegian

88

Parliament must resolve to open an area for petroleum activities before a licensing round can be announced. The basis

for such decisions must include preparation of an impact assessment to consider factors such as economic and social

effects, as well as environmental effects the activities could have for other industries and the surrounding district.

The Government decided in 2009 to initiate an opening process for petroleum activities near Jan Mayen, with a view

towards awarding production licenses. An environmental impact assessment with a number of studies has been carried

out, and will shed light on consequences for, among other things, other industry and commerce activities, society and the

environment. In addition, the Norwegian Petroleum Directorate has assessed potential petroleum resources in the

surrounding waters. The opening process of Jan Mayen is still on-going. Iceland has implemented two licensing rounds on

their side of the demarcation line.

After the treaty with Russia on maritime delimitation and collaboration in the Barents Sea and the Arctic Ocean came

into force on 7 July 2011, work began on a process to open Barents Sea South Ease for petroleum activities. The areas

were opened for activity in 2013. The announcement of the 23rd licensing rounds includes blocks in the Barents Sea South

East for the first time. Awards are expected in 2015.

10.4 Regulatory Framework on the Norwegian Continental Shelf

The ultimate regulatory authority with respect to the petroleum activities on the NCS is exercised by the Norwegian

Parliament (“Stortinget”). The overall responsibility for ensuring that the petroleum activities are carried out in

accordance with the regulatory framework laid down by Stortinget, rests with the Ministry of Petroleum and Energy.

Subordinated to the MPE is the NPD whose activities relate to resource management and day-to-day issues. The

Petroleum Safety Authority (“PSA”), the regulatory authority for technical and operational safety, including emergency

preparedness, and for the working environment, is subordinated to the Ministry of Labour. Policy and legislation

concerning taxation of the petroleum industry is handled by MoF and annual tax assessments are carried out by the Oil

Taxation Office. The Norwegian Environment Agency (“NEA”) has regulatory responsibility for pollution caused by

petroleum activities on the NCS.

General Framework

The legal basis for the government regulation of the petroleum sector is constituted by section 1-1 of the 1996 Petroleum

Act, which states that the proprietary right to subsea petroleum deposits is vested in the Norwegian State. The Petroleum

Act provides the legal framework for the licensing system, whereby exploration and production licenses are awarded, as

well as providing provisions regarding exploration, development, production and transportation of petroleum.

The level of state participation in the petroleum activities is high. The Norwegian State is the largest player on the NCS,

by way of its shareholdings in Statoil Petroleum AS, and by way of the State’s Direct Financial Interest (“SDFI”), whereby

the State participates directly in various production licenses. The SDFI is managed by the State-owned company Petoro

AS.

The legal basis for taxation of offshore petroleum activities is the 1975 Act Relating to Taxation of Subsea Petroleum

Deposits.

The Licensing System

The Norwegian offshore licensing system comprises various licenses, approvals, agreements and other mechanisms.

Companies can apply for an exploration license, for the purpose of exploration activities, typically performing geological

and other surveys (excluding drilling to oil-bearing strata) in a certain area. This license does however not give any

exclusive rights in the relevant area.

The production license is the core document in the licensing system, and gives the licensee an exclusive right to explore

for (including exploration drilling), develop and produce petroleum in the block(s) covered by the license. There are two

systems for awarding production licenses on the NCS. Production licenses may be awarded in licensing rounds, which

normally are arranged every second year. In addition, as from 2003, unlicensed acreage in mature areas on the NCS is

opened for application in annually award procedures. This award system ensures that very large areas close to existing

and planned infrastructure are available for the industry. This area will be expanded as new areas mature.

Companies can apply for license awards individually or in groups. To be eligible for license award, the company must be

pre-qualified as a licensee, meaning that it must fulfil certain criteria regarding organisation, qualification, financial

strength, etc. There is no direct cash payment to the State for the award of development or production licenses;

however, an application fee of NOK 116,000 applies for the handling of the license application. An important factor which

the MPE regularly asses in the competition for awards is the extent of work obligations which the applicant is willing to

assume.

89

If the licensee has a parent company, the parent will regularly be required by the MPE to furnish a parent company

guarantee, on a standard format provided by the MPE, to ensure fulfilment of obligations undertaken by the licensee

towards the State or Norwegian public institutions, and for the licensee’s possible liability towards the same in

connection with petroleum activities.

In addition to the regulatory requirements mentioned above, the licensees are obligated to cover the capital

expenditures relating to the work obligations in which the relevant license is subject to. Such capital expenditures will

vary on a case-by-case basis. If such costs are not covered, the license may be withdrawn. Further, the ability to carry

out exploration and development activities will also depend on other economic conditions such as the price of oil and

natural gas (the break-even price) and availability of rig capacity on acceptable terms. Finally, the overall profitability of

a development project may be taken into consideration when the MPE considers the PDO submitted for approval.

The production license can be awarded to one or several oil companies, thus becoming licensees. One of them is

appointed by the MPE as operator, who becomes responsible for the daily operations of the parties’ joint activities in

accordance with the Production License.

The production license governs the licensees’ rights and obligations towards the State. The license is awarded for an

initial period (could be up to 10 years), within which period the specified work program must be fulfilled. After such

fulfilment of the work program, the licensees may require that the license is extended. The extension period shall as a

general rule be up to 30 years. The licensees can in general retain up to half the acreage covered by the license when

entering into the extension period. In recent years, the MPE has typically required that for acreage that has already been

explored, licensees must decide to drill an exploration well within a relatively short time (typically 2 years), in order to

retain the license (“drill or drop”). An area fee also applies after the initial period, based on the size of the acreage.

One of the conditions of the award of a production license is that the licensees enter into an agreement for petroleum

activities. Such agreement consists of certain specific provisions, which set out e.g. the voting rules in the license, and

the standard joint operation agreement (the “JOA”) and the accounting agreement. The latter regulates the accounting

and financial aspects of the license joint venture. The JOA governs the relationship between the licensees, as it forms the

basis for day-to-day management of the activities, allocation of cost, decision making processes, the operators’ duties

etc. A management committee is established as the supreme body of the license joint venture, in which all licensees are

represented. All petroleum produced is allocated to the licensees in accordance with their shares in the license.

If a petroleum deposit extends over more than one production license, the affected licensees must enter into a

unitisation agreement which governs the licensees’ rights in the deposit and which in practice replaces the JOA and the

accounting agreement in relation to the joint deposit. The licensees’ rights are divided in accordance with the physical

distribution of the deposit between the production licenses. This distribution may be subject to later redetermination

which will affect the parties’ participating interests in the joint deposit.

Assignments of license interest are subject to the MPE’s approval, and also to a tax clearance from the MoF. The MoF will

apply a principle of tax neutrality, which means that the seller’s gain from the sale shall not be taxable, and the

purchaser’s costs in acquiring the interest shall not be deductible. Transfer of controlling interests in companies holding

production licenses are also subject to approval. In practice, the MPE often distinguishes between various levels of

control: negative control (generally, over 33,3%), positive control (generally, over 50%), full control (generally, over

66,7%) and full ownership (will generally apply at 90% as this triggers a squeeze-out right for the shareholder over the

remaining shares). The requirement for approval arises when an investor moves from one level to a higher level.

Exploration

As mentioned above, while certain exploration activities can be carried out pursuant to an exploration license,

exploration drilling (to and in oil-bearing strata) can only be carried out pursuant to a production license. The operator

must obtain consent from the PSA and the NPD prior to start-up drilling operations. Such consent must be obtained for

each exploration well. When applying for such consent, the operator must submit detailed information with regard to

both technical and environmental aspects of the planned operation, and comprehensive HSE procedures must be in place,

including the establishment of emergency preparedness procedures. Permits to discharge to sea and air must also be

obtained from the Norwegian Pollution Control Authority and is a part of the consent to drill.

Development

In order to develop a petroleum deposit, the license partners must submit a Plan for Development and Operation (“PDO”)

to the authorities. The PDO sets out inter alia the development solution, estimated development costs, production profile

for the deposit as well as information regarding decommissioning. Moreover, the PDO shall comprise information on

facilities for utilisation and transportation of petroleum.

90

The PDO must be approved by the MPE, and shall also be presented to Stortinget if the estimated investment is more than

NOK 10 billion. According to the provisions of the JOA, the management committee in the license joint venture decides

on whether to submit a PDO to the MPE for approval. In addition, each licensee must, towards the MPE, individually

accede to the plan. If a licensee does not accede to a PDO, the licensees that have acceded the plan may carry out the

project on their own (“sole risk”). The licensee not participating retains its rights in the license acreage outside the

deposit which is comprised by the project.

Infrastructure

In order to construct and operate facilities for transportation and utilisation of petroleum, typically pipelines and

processing facilities, a Plan for Installation and Operation (“PIO”) must be submitted to the MPE for approval (if the

facilities are not already comprised by an approved PDO).

Generally, the MPE may decide that owners of transportation and processing facilities shall provide access to third

parties. If no agreement for such use is reached, the MPE can impose a solution on the parties. As for the Gassled joint

venture, which virtually comprises all transportation and processing facilities for gas transportation on the NCS as well as

receiving terminal in the UK and on the European continent, a general principle of third party access applies. Access may,

however, be limited due to capacity constraints.

Production

Based on the PDO, the NPD issues annual production permits allowing the licensees to produce defined volumes of

petroleum, considering inter alia, proper resource management. In addition, the licensees need consent to use the

installations and permit for discharges and emissions. The main principle for the NPD is to ensure maximum depletion of

petroleum from the reservoirs.

Duration and extension of production licenses

A production license is initially granted for up to 10 years. If initially granted for a shorter period of time, the MPE may

subsequently extend the license period within the 10 year limit.

If the license group has fulfilled the work commitment(s) imposed when the production license was granted, the license

group may demand an extension of the license after expiry of the initial license period. Such extension period shall be

stipulated specifically for each production license and is normally set for up to 30 years. In certain cases however, the

MPE sets an extension for up to 50 years.

When particular reasons warrants it, the MPE may on application from the license group extend a production license in

excess of the (first) extension period. A new extension of the production license is typically relevant for fields with

significant remaining resources at the end of the license period. If the MPE grants an extension in excess of the extension

period, the MPE may stipulate special terms and conditions for such particular extension. Thus, it is up to the MPE to

decide whether a new extension shall be granted and if the conditions for the activity in the license shall be amended or

continued along the lines of the plans that are submitted. In particular, the MPE may reserve the right to (increase) State

participation in the license if considered a necessary measure to give all the licensees incentives to work for a long-term,

efficient and effective operation of the license. Such conditions may especially be considered if the relevant production

license has a low State ownership interest and/or significant remaining reserves. However, the MPE has stated that it will

approve applications for new extensions of the license period for a production license with the same ownership structure

if the application substantiates improved utilisation of reserves, unless special conditions call for something else.

Environmental conditions for exploring and development

Liability for pollution damage

Chapter 7 of the Petroleum Act stipulates a strict liability for pollution damage on all the licensees, thus, a licensee is

liable for pollution damage without regard to fault. However, if it is demonstrated that an inevitable event of nature, act

of war, exercise of public authority or a similar force majeure event has contributed to a considerable degree to the

damage or its extent under circumstances which are beyond the control of the liable party, the liability may be reduced

to the extent it is reasonable, with particular consideration to the scope of the activity, the situation of the party that

has sustained damage and the opportunity for taking out insurance on both sides.

A claim against the license holders for compensation relating to pollution damage shall initially be directed to the

operator. If any part of the compensation is left unpaid on the due date by the operator, this part shall be covered by the

licensees in accordance with their participating interest in the license. If any of the licensees fails to cover his share, the

liability relating to this share shall be allocated proportionately between the others licensees.

91

Discharge permits

Emissions and discharges from Norwegian petroleum activities are regulated through several acts, including the

Petroleum Act, the CO2 Tax Act, the Sales Tax Act, the Greenhouse Gas Emission Trading Act and the Pollution Control

Act. Discharge of oil and chemicals in relation to exploration, development and production of oil and natural gas are

regulated under the Pollution Control Act (the “Pollution Act”). In accordance with the provisions of the Pollution Act,

the operator must apply for a discharge permit from relevant authorities on behalf of the license group in order to

discharge any pollutants into the water. Further, the Petroleum Act states that burning of gas in flares beyond what is

necessary to ensure normal operations is not permitted without approval from the MPE.

All operators on the NSC are under an obligation to and responsible for establishing sufficient procedures for the

monitoring and reporting of any discharge into the sea. The Climate and Pollution Agency, the Norwegian Petroleum

Directorate and the Norwegian Oil Industry Association have established a joint database for reporting emissions to air

and discharges to sea from the petroleum activities, «Environmental Web» (EW). All operators on the NCS report emission

and discharge data directly into the database.

Decommissioning

The licensees are required to submit to the MPE a plan for decommissioning and cessation of the petroleum activities.

The MPE then decides, based on the plan, on the disposal of the facilities. The decommissioning costs are carried by the

licensees, and are petroleum tax deductible for current licensees. Following transfer, cf. below, of a license share, a

company will remain liable on a secondary pro rata basis for decommissioning cost if its successor defaults on its

obligations to pay such cost. Such liability is on after tax terms, meaning that the company being held liable on a

secondary pro rata basis will not get a tax deduction.

The Petroleum Tax Act

For companies participating in production and transportation of petroleum products on the NCS, there are two, partially

overlapping income tax regimes: ordinary income tax imposed by the general rules in the Norwegian General Tax Act of

1999 (the “GTA”) and the special petroleum tax on income imposed by the Petroleum Tax Act (the “PTA”). As a result,

the total marginal income tax rate for companies engaged in E&P activities on the NCS is 78 per cent, consisting of a 27

per cent general income tax and a 51 per cent special petroleum tax to the State levied on income generated by

exploitation, treatment or transportation of petroleum, ref. the PTA section 5. The petroleum tax applies on a

corporation net profit level, not on a ring-fenced basis. Losses generated by other activities may as a general rule not be

set off against assessed income for special tax (51 per cent) purposes and there are limitations on the right to set of other

losses against the general tax (27 per cent) basis.

Taxable income is computed according to the general tax legislation and particular rules set out in the PTA. Gross income

generated by oil sales is assessed according to a norm price system, whereby the sales prices are fixed by an

administrative body with the objective of arriving at fair market prices. Income generated by gas sales is, with very few

exceptions, assessed on actual sales prices.

Although certain important deductible expenses are dealt with in the PTA, the deductibility of expenses for purposes of

the special petroleum tax is based on the general rules in the GTA. The timing of deductions for tax purposes generally

follows the realisation principle, i.e. when the expense is unconditionally incurred by the taxpayer. Provisions in the

accounts based on prudent accounting principles are generally not deductible for tax purposes.

Financial items, such as interest income and expenses and currency losses and gains etc. are taxable. However, interest

expenses and foreign currency items relating to interest-bearing debt instruments are treated separately from other

financial items. Such costs fall within the offshore tax regime, meaning that they are deductible against income taxed at

78 per cent. However, the amount of such costs deductible against income falling within the offshore tax regime is

capped as follows:

Offshore tax deduction = (Interest cost + exchange gain/loss) x 50% x Tax value offshore assets 31.12

Average interest-bearing debt

Any such costs in excess of this cap together with other financial items fall within the ordinary corporate tax regime,

meaning that they are deductible against income taxed at 27 per cent. If the taxpayer does not have any income which is

taxed under the ordinary corporate tax regime from which the excess costs can be deducted, it may deduct an amount

from its offshore income but only so as to give it an effective deduction against 27 per cent tax, and not against 78 per

cent tax.

For general income tax purposes, depreciation deductions are permitted under a reducing balance system. For petroleum

tax purposes depreciations of production installations are permitted under a straight-line basis at a rate of 16 2/3 per

92

cent annually from the year in which the investments takes place, i.e. a deprecation over 6 years. In addition to the

depreciation allowance offered, an uplift of 5.5 per cent pr. year is granted in the special tax basis for a four-year period

for investments in production and pipeline facilities.

Hence, a licensee on the NCS that is subject to Norwegian taxation will be entitled to tax deductions with regard to

exploration and production costs (running expenses, net financial items, depreciations and uplift) and transportation

costs (tariff payments). Losses for tax purposes may be carried forward indefinitely. Interest is added for losses incurred

in 2002 and subsequent years. The calculated interest is added to loss carry forward at the end of each year.

Refund of Tax Value of Exploration Cost

Companies which are not in a tax position may annually claim a refund from the State of the tax value of direct and

indirect costs, except financial charges, incurred in exploration for petroleum resources. The tax value is set to the total

of direct and indirect costs multiplied by the tax rate, currently 78 per cent. The refund will reduce the tax loss carry

forward correspondingly. The amount of exploration costs may not exceed the annual net loss from the petroleum

activities of the taxpayer, to ensure that the costs are not already set off against taxable income.

Transfer of License Interest

All (direct or indirect) assignments of petroleum production licenses on the NCS are subject to the approval by the MPE

under the Petroleum Act section 10-12 and of the MoF under the PTA section 10. In Regulations dated 1 July 2009 the MoF

has decided that certain, typical, transactions for which the PTA section 10 applies shall be approved as such, on terms

set out in the regulations, without any processing of applications, provided that the parties submit certain information to

the MoF and the oil taxation authorities.

For transactions not covered by said Regulations, one would still have to apply for an approval from the MoF. The MoF

may stipulate specific conditions, which also deviate from the general tax legislation. The guiding principle for approval

of transactions is that they should be revenue neutral to the State, i.e. that the total anticipated tax payments of the

buyer and the seller before and after the transaction remain unchanged. Practice concerning such transactions has

undergone considerable changes over the years, but will now follow the most recent guidelines issued by the MoF on

1 July 2009.

According to the guidelines, the existing tax balances (depreciation and uplift) will (as the main rule) be transferred from

the seller to the buyer with the assets. Thus, there will be no step up of the tax balances as a result of the transaction.

93

11. CAPITALISATION AND INDEBTEDNESS

This Section provides information about (a) the Company’s capitalisation and net financial indebtedness on an actual

basis as of 31 March 2014 (restated) and 31 December 2013. The information presented below should be read in

conjunction with Section 12 “Selected Financial Information” and Section 13 “Operating and Financial Review”.

11.1 Capitalisation

NOK thousands Actual as of

31 March 2014

(Unaudited)

Actual as of 31

December 2013

(Unaudited)

Shareholders’ equity

—Paid-in capital ................................................................ 3,230,249 3,230,249

—Retained earnings ............................................................ (57,563) (41,780)

Total shareholders’ equity (A) .............................................. 3,172,686 3,188,469

Current liabilities

—Guaranteed and secured(1) .................................................. — —

—Guaranteed but unsecured(1) ................................................ — —

—Secured but unguaranteed(1) ................................................ 899,164 930,485

—Unguaranteed and unsecured ............................................... 854,108 966,634

Total current liabilities ....................................................... 1,753,272 1,897,119


—Guaranteed and secured(1) .................................................. — —

—Guaranteed but unsecured(1) ................................................ — —

—Secured but unguaranteed(1) ................................................ 2,150,288 2,036,907

—Unguaranteed and unsecured ............................................... 3,390,578 3,418,856

Total non-current liabilities ................................................. 5,540,866 5,455,763

Total liabilities (B) ............................................................. 7,294,138 7,352,882

Total capitalisation (A)+(B) .................................................. 10,466,824 10,541,351

__________

(1) As described in section 13.7 the main assets furnished as security for the Company's loan are licenses, tax receivable,

accounts receivable, positive value of derivatives and possible insurance claims.

11.2 Net Financial Indebtedness

NOK thousands Actual as of

31 March 2014

(Unaudited)

Actual as of 31

December 2013

(Unaudited)

A. Cash ........................................................................... 5 5

B. Cash equivalents ............................................................ 810,718 1,693,314

C. Restricted cash deposits ................................................... 10,346 15,847

D. Liquidity (A)+(B)+(C) ...................................................... 821,069 1,709,166

E. Current financial receivables .............................................. 2,186,449 2,068,966

F. Current bank debt ........................................................... 680,794 478,050

G. Current portion of non-current debt ..................................... — —

H. Other current financial debt .............................................. 1,072,478 1,419,069

I. Current financial debt (F)+(G)+(H) ...................................... 1,753,272 1,897,119

J. Net current financial indebtedness (I)-(E)-(D) ........................ (1,254,246) (1,881,013)

K. Non-current bank debt ..................................................... 2,150,288 2,036,907

L. Bonds issued ................................................................. 2,475,559 2,473,582

M. Other non-current financial debt ......................................... 915,019 945,274

N. Non-current financial debt (K)+(L)+(M) ................................ 5,540,866 5,455,763

O. Net financial indebtedness (J)+(N) ..................................... 4,286,620 3,574,750

Indirect and Contingent Indebtedness

The petroleum activities on the Norwegian Continental Shelf are mainly structured in joint ventures whereas the partners

might be jointly and severally liable for all obligations arising by virtue of the joint venture's activities. This implies that

the Company might be subject to increase debt exposure if one partner fails to meet its obligations. It is difficult to

estimate the exposure in this respect. In general, the Company has partners which are historically financially stable (i.e.

Statoil) on their main fields, thus this is not assessed to be a high risk for the Company.

94

12. SELECTED FINANCIAL INFORMATION

The following selected financial information has been extracted from the Company's unaudited Interim Financial

Statements as of and for the three months ended 31 March 2014 (restated) and 31 March 2013, and the Company's

audited Financial Statements as of and for the years ended 31 December 2013, 2012 and 2011, except the unaudited pro

forma financial income statement information for the year ended 31 December 2013 and the three months ended 31

March 2014, and the unaudited pro forma financial position information as of 31 March 2014. The Financial Statements

have been prepared in accordance with IFRS, and the unaudited Interim Financial Statements have been prepared in

accordance with IAS 34. The selected combined financial information, and the selected interim financial information,

included herein should be read in connection with, and is qualified in its entirety by reference to, the annual financial

statements which are incorporated by reference to this Prospectus, see Section 23 "Incorporation by Reference;

Documents on Display" and the interim financial report for the three months ended March 31, 2014, included in this

Prospectus as Appendix E—First Quarter 2014 Interim Financial Information and Accompanying Independent Auditors'

Review Report; and should be read together with Section 14 "Operating and Financial Review".

12.1 Selected Income Statement Information

The table below sets out a summary of the Company's unaudited income statement information for the first three months

ended 31 March 2014 (restated) and 2013, and the Company's audited income statement information for the years ended

31 December 2013, 2012 and 2011.

NOK thousands Three Months Ended

31 March

Year

Ended

31 December

2014 2013 2013 2012 2011

Results (unaudited) (unaudited)

Petroleum revenues ............................................................ 155,101 78,709 933,162 325,093 361,774

Other operating revenues ..................................................... 3,241 1,630 10,719 7,351 75,768

Total operating revenues ...................................................... 158,342 80,339 943,881 332,444 437,542

Exploration expenses .......................................................... 109,582 233,738 1,637,063 1,609,314 1,012,191

Production costs ................................................................ 42,949 41,512 249,619 210,962 181,888

Payroll and payroll-related expenses ........................................ 4,559 1,527 38,025 11,000 31,732

Depreciations ................................................................... 88,863 34,997 470,529 111,687 78,518

Impairments ..................................................................... 167,373 — 666,135 2,149,653 150,990

Other operating expenses ..................................................... 13,305 19,208 109,886 82,799 60,721

Total operating expenses ...................................................... 426,631 330,983 3,171,256 4,175,415 1,516,040

Operating profit/loss .......................................................... (268,289) (250,644) (2,227,375) (3,842,971) (1,078,498)

Interest income ................................................................. 12,145 7,202 40,750 54,997 69,900

Other financial income ........................................................ 34,663 20,602 80,567 68,399 26,825

Interest expenses ............................................................... 86,753 12,748 301,834 128,250 305,969

Other financial expenses ...................................................... 20,530 47,153 137,435 101,050 23,111

Net financial items ............................................................. (60,475) (32,097) (317,952) (105,904) (232,355)


Taxes (+)/tax income .......................................................... (312,981) (262,415) (1,996,727) (2,991,624) (940,594)

Net profit/loss .................................................................. (15,783) (20,326) (548,600) (957,251) (370,259)

Weighted average no. of shares

outstanding .................................................................... 140,707,363 140,707,363 140,707,363 128,649,729 115,058,944

Weighted average no. of shares fully

diluted ......................................................................... 140,707,363 140,707,363 140,707,363 128,649,729 115,058,944


(adjusted for split) ........................................................... (0.11) (0.14) (3.90) (7.44) (3.22)


(adjusted for split) fully diluted .............................................. (0.11) (0.14) (3.90) (7.44) (3.22)

Statement of comprehensive income

Profit/loss for the period ...................................................... (15,783) (20,326) (548,600) (957.251) (370,259)

Items that will not be reclassified over profit and loss

Actual gain/loss pension plan ................................................. — — 4,064 (6,834) —

Tax related to items which will not be

reclassified .................................................................... — — (3,170) 5,331 —

95


31 March

Year

Ended

31 December

2014 2013 2013 2012 2011

Total loss ........................................................................ (15,783) (20,326) (547,706) (958,756) (370,259)

Attributable to:

Majority interests............................................................... — — (547,706) (958,755) (370,259)

Total ............................................................................. (15,783) (20,326) (547,706) (958,755) (370,259)

12.2 Selected Financial Position Information

The table below sets out a summary of the Company's unaudited statement of financial position as of 31 March 2014

(restated) and 2013, and the Company's audited balance sheet information as of 31 December 2013, 2012 and 2011.


2014 2013 2013 2012 2011

Assets (unaudited) (unaudited)

Intangible assets

Goodwill ......................................................................... 321,120 387,551 321,120 387,551 525,870

Capitalised exploration expenditures........................................ 1,555,348 2,247,718 2,056,100 2,175,492 2,387,360

Other intangible assets ....................................................... 643,050 660,581 646,299 665,542 905,726

Deferred tax asset .............................................................. 795,400 — 630,423 — —


Property, plant and equipment............................................... 3,536,285 2,486,607 2,657,566 1,993,269 902,071

Financial assets

Long-term receivables ......................................................... 286,082 328,379 125,432 31,995 —

Other non-current assets ...................................................... 282,472 200,559 285,399 193,934 18,423

Non-current assets ............................................................ 7,419,757 6,311,395 6,722,340 5,447,783 4,739,450

Inventories

Inventories ...................................................................... 39,549 21,059 40,880 21,209 37,039

Receivables

Accounts receivable ............................................................ 128,239 86,452 134,221 101,839 146,188

Other short-term receivables ................................................. 617,286 337,720 499,419 342,566 532,538

Short term deposits ............................................................ 24,375 23,625 24,075 23,138 21,750

Calculated tax receivables .................................................... 1,416,550 1,278,297 1,411,251 1,273,737 1,397,420

Cash and cash equivalents

Cash and cash equivalents .................................................... 821,069 735,706 1,709,166 1,154,182 841,599

Total current assets ........................................................... 3,047,067 2,482,859 3,819,012 2,916,671 2,976,534

Total assets ..................................................................... 10,466,824 8,794,255 10,541,352 8,364,453 7,715,984

Equity and liabilities

Paid-in-capital

Share capital .................................................................... 140,707 140,707 140,707 140,707 127,916

Share premium .................................................................. 3,089,542 3,089,542 3,089,542 3,089,542 2,083,271

Total paid-in equity ........................................................... 3,230,249 3,230,249 3,230,249 3,230,249 2,211,187

Other equity..................................................................... (57,563) 485,600 (41,780) 505,926 1,465,364

Total equity..................................................................... 3,172,687 3,715,849 3,188,470 3,736,175 3,676,551

Provision for liabilities

Pension obligations ............................................................. 36,375 54,625 66,512 65,258 46,944

Deferred taxes .................................................................. — 125,113 — 126,604 2,042,051

Abandonment provision ........................................................ 829,720 867,895 828,529 798,057 285,201

Provisions for other liabilities ................................................ 696 325 780 647 1,643


Bonds ............................................................................. 2,475,559 589,939 2,473,582 589,078 587,011

Other interest-bearing debt .................................................. 2,150,288 1,453,053 2,036,907 1,299,733 —

Derivatives ...................................................................... 48,228 48,693 49,453 45,971 —

Current liabilities

96


2014 2013 2013 2012 2011

Short-term loan ................................................................. 680,794 969,819 478,050 567,075 379,550

Trade creditors ................................................................. 218,370 230,398 452,435 258,596 274,308

Accrued public charges and indirect taxes ................................. 24,457 18,881 23,579 24,536 18,568

Abandonment provision ........................................................ 156,397 — 147,375 — —

Other current liabilities ....................................................... 673,254 719,684 795,680 852,722 404,156

Total liabilities and provision for liabilities................................. 7,294,137 5,078,505 7,352,882 4,628,277 4,039,432

Total equity and liabilities .................................................... 10,466,824 8,794,255 10,541,352 8,364,453 7,715,984

12.3 Selected Changes in Equity Information

The table below sets out a summary of the Company's audited changes in equity information for the years ended 31

December 2011, 2012 and 2013, and the Company’s unaudited changes in equity information for the first three months

ended 31 March 2014 (restated).

NOK thousands Total

Balance as of 1 January 2011 ....................................................................................... 3,057,510

Balance as of 31 December 2011 ............................................................................................. 3,675,867



Balance as of 31 March 2014 (unaudited) .................................................................................. 3,172,687

12.4 Selected Cash Flow Information

The table below sets out a summary of the Company's unaudited cash flow information for the first three months ended

31 March 2014 (restated) and 2013, and the Company's audited cash flow information for the years ended 31 December

2013, 2012 and 2011.


31 March

Year

Ended

31 December

2014 2013 2013 2012 2011

Cash flow from operating activities (unaudited) (unaudited)


Taxes paid during the period ................................................. — — (26,585) — (5,489)

Taxes refund during the period .............................................. — — 1,318,430 1,443,140 2,323,865

Depreciation .................................................................... 88,863 34,997 470,529 111,687 78,518

Net impairment losses ......................................................... 167,373 — 666,135 2,149,653 150,990

Accretion expenses ............................................................. 12,920 9,924 42,765 17,519 17,009

Reversal of tax item related to shortfall

value of purchase price allocation ........................................ — — — (57,000) (67,823)

Profit/losses on sale of licenses .............................................. — — 734 13,461 —

Changes in derivatives ......................................................... (2,383) 2,708 3,174 44,847 6,033

Amortisation of interest expenses and

arrangement fee.............................................................. 10,064 9,291 88,458 39,576 59,438

Expensed capitalised dry wells ............................................... 73,601 163,563 1,150,541 1,116,403 534,640

Changes in inventories, accounts payable

and receivables ............................................................. (226,752) (12,661) 141,786 44,467 (57,935)

Changes in net current capital and in other

current balance sheet items .............................................. (283,796) (191,924) (394,934) 444,144 (275,741)

Net cash flow from operating activities ................................... (488,876) (266,843) 915,707 1,419,022 1,452,651

Cash flow from investing activities

Payment for removal and decommissioning

of oil fields .................................................................... (2,706) (2,056) (36,739) (678) (35)

Disbursements on investments in fixed

assets ............................................................................. (589,611) (461,186) (1,495,709) (2,874,627) (388,160)

Disbursements on investments in capitalised (114,942) (236,007) (1,358,941) (1,114,277) (1,440,812)

97


31 March

Year

Ended

31 December

2014 2013 2013 2012 2011

exploration and other intangible assets ...................................

Sale/farm-out of tangible fixed assets and

licenses ........................................................................ — — 86,472 414,336 110,574

Net cash flow from investing activities .................................... (707,260) (699,249) (2,804,917) (3,575,246) (1,718,433)

Cash flow from financing activities

Private placement .............................................................. — — — 900,844 609,452

Repayment of short-term debt ............................................... — — (1,500,000) (2,000,000) (2,539,850)

Repayment of long-term debt ................................................ (290,927) — (2,185,102) (600,000) —

Proceeds from the issuance of long-term

debt .............................................................................. 398,966 147,616 4,729,297 1,967,968 —

Proceeds from the issuance of short-term

debt .............................................................................. 200,000 400,000 1,400,000 2,200,000 2,248,448

Net cash flow from financing activities.................................... 308,039 547,616 2,444,195 2,468,812 318,050

Net change in cash and cash equivalents ................................ (888,097) (418,476) 554,984 312,583 52,269

Cash and cash equivalents at start of the

period. ......................................................................... 1,709,166 1,154,182 1,154,182 841,599 789,330


period.......................................................................... 821,069 735,706 1,709,166 1,154,182 841,599

Breakdown of cash equivalents at end of

period

Bank deposits etc. .............................................................. 810,723 725,109 1,693,319 1,140,750 828,772

Restricted bank deposits ...................................................... 10,346 10,597 15,847 13,432 12,827


period.......................................................................... 821,069 735,706 1,709,166 1,154,182 841,599

12.5 Other Selected Financial and Operating Information

The table below sets out certain other unaudited non-IFRS key financial and operating information for the Company:

NOK thousands, except ratios As of or for

the Three

Months

Ended

31 March

2014

As of

or for

the

Year Ended 31

December

2013

(unaudited) (unaudited)

EBITDA(1) ................................................................................................. (12,054) (1,090,711)

NIBD(2) ..................................................................................................... 4,485,572 3,279,373

Equity ratio(3) ............................................................................................ 30.31 30.25

Debt-to-equity ratio(4) .................................................................................. 2.30 2.31

Interest coverage ratio(5) ............................................................................... (3.09) (7.38) _______________

(1) The Company defines EBITDA as operating profit before depreciation, amortisation and impairment charges.

(2) Net interest bearing debt, which is interest bearing debt less cash and cash equivalents excluding debt service

reserves and rental deposit accounts.

(3) Total shareholders' equity divided by total assets, multiplied by 100.

(4) Total liabilities to shareholders equity.

(5) EBIT (being operating profit) to interest expenses.

98

12.6 Unaudited Pro Forma Financial Information

On June 2 2014 the Company entered into the SPA with Marathon Oil Corporation whereby the Company will acquire 100%

of the shares in Marathon Norway for a cash consideration of USD 2.1 billion. The cash consideration is based on a gross

asset value of USD 2.7 billion and is adjusted for debt, net working capital and interest on the net purchase price. The

effective date of the Transaction for tax purposes will be 1 January 2014 and it is expected that the Transaction will be

consummated and accounted for in the fourth quarter 2014, subject to regulatory approvals.

Cautionary Note Regarding the Unaudited Pro Forma Financial Information

The following tables set out Unaudited Pro Forma Financial Information for the Company as of and for the three months

ended 31 March 2014 and the year ended 31 December 2013 and is prepared under the assumption that the Transaction

will close as described.

The Unaudited Pro Forma Financial Information has been prepared solely to show how the Transaction would have

impacted on the income statement for the Company for the three months ended 31 March 2014 and the year ended 31

December 2013 had the Transaction occurred on 1 January 2014 and 1 January 2013 respectively, and the statement of

financial position as of 31 March 2014 had the Transaction occurred at 31 March 2014.

The Unaudited Pro Forma Financial Information is based on estimates and assumptions based on current circumstances

believed to be reasonable, actual results could have materially differed from those presented herein had the transactions

occurred at those earlier dates. There is a greater degree of uncertainty associated with pro forma figures than with

actual reported financial information. The Unaudited Pro Forma Financial Information has been prepared for illustrative

purposes only and, because of its nature, addresses a hypothetical situation and, therefore, does not purport to present

the results of operations of the Company as if the Transaction had occurred at the commencement of the period being

presented, or the financial condition of the Company as at the date being presented, nor should it be used as the basis of

projections of the results of operations for the Company for any future period or the financial condition of the Company

for any date in the future.

The Unaudited Pro Forma Financial Information has been compiled in connection with the Rights Issue of 61,911,239

Shares to comply with the Norwegian Securities Trading Act and the applicable EU-regulations including EU Regulation No

809/2004 pursuant to section 7-7 of the Norwegian Securities Trading Act. The Unaudited Pro Forma Financial Information

has been compiled in accordance with Annex II of Commission Regulation (EC) no. 809/2004. This information is not in

compliance with SEC Regulation S-X, and had securities been registered under the U.S: Securities Act of 1933, this

unaudited pro forma financial information, including the report by the auditor, would have been amended and / or

removed from the offering document.

Independent Practitioner’s Assurance Report on Unaudited Pro Forma Financial Information

With respect to the Unaudited Pro Forma Financial Information included in this Prospectus, KPMG AS has applied

assurance procedures in accordance with International Standard on Assurance Engagements 3420, Assurance Engagements

to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus, in order to express an opinion

as to whether the Unaudited Pro Forma Financial Information has been properly compiled on the basis stated, and that

such basis is consistent with the accounting policies of the Company; see Appendix B “Independent Practitioner’s Report

on Unaudited Pro Forma Financial Information”.

Sources and Basis for Preparation of the Unaudited Pro Forma Financial Information

The historical financial information for the Company used for compilation of the pro forma income Statement has been

extracted, without material adjustment, from the Annual Financial Statements for the Company as of and for the year

ended 31 December 2013, and the unaudited financial statements for the Company for the three months ended 31 March

2014 (restated). These documents are incorporated by reference to this Prospectus; see Section 24 “Incorporation by

Reference; Documents on Display”.

The financial information of Marathon Norway has been extracted from the Annual Financial Statements for Marathon

Norway as of and for the year ended 31 December 2013 prepared in accordance with Norwegian generally accepted

accounting principles (“NGAAP”) and in compliance with the 1998 Accounting Act. For the three months ended 31 March

2014, the Marathon Norway’s numbers have been extracted from unaudited schedules directly from the accounting

system at Marathon Norway. The Financial Statements for Marathon Norway are set out in Appendix C.

Certain reclassifications have been done to conform Marathon Norway’s 2013 financial statement presentation to that of

the Company.

99

The Unaudited Pro Forma Financial Information does not include all information required for financial statements under

IFRS, and should be read in conjunction with the Annual Financial Statements as of and for the year ended 31 December

2013 and the unaudited financial statements for the three months period ended 31 March 2014 (restated) for the

Company. The Unaudited Pro Forma Financial Information has been prepared by using the same accounting policies as for

the Annual Financial Statements as of and for the year ended 31 December 2013 for the Company. There were no new

standards or interpretations implemented in Q1 2014 which had a significant impact on the Company’s Financial

Statements. Please refer to the financial statements for 2013 for description of the accounting policies.

Unaudited Pro Forma Income Statement

The table below sets out the Company's unaudited pro forma consolidated condensed income statement for the year

ended 31 December 2013, as if the Transaction had taken place at 1 January 2013.


31 December 2013

Det nor

(IFRS)

(audited)

Marathon

(NGAAP)

(audited)

IFRS

adjustments

(unaudited)

Pro forma

adjustments

(unaudited)

Notes to IFRS

and pro

forma

adjustments

(unaudited)

Pro forma

ending 31

December

2013

(unaudited)


expenses


Other operating revenues .................................................................................. 10,719 2,594 — — 13,313


Exploration expenses ....................................................................................... 1,637,063 536,526 — — 2,173,589

Production costs ............................................................................................. 249,619 1,477,439 (8,983) — 1 1,718,075


expenses ................................................................................................... 38,025 — — — 38,025

Depreciation ................................................................................................. 470,529 1,485,126 (559,349) 1,586,354 3, 4, 5 2,982,660

Impairments .................................................................................................. 666,135 18,090 — — 684,225

Provision for decommissioning............................................................................. — 371,985 (390,309) — 4 (18,325)


Total operating expenses ................................................................................. 3,171,256 3,942,554 (958,641) 1,638,762 7,793,932

Operating

profit/(loss) ............................................................................................... (2,227,376) 14,730,156 924,302 (1,638,762) 11,788,320


expenses

Interest income .............................................................................................. 40,750 12,545 — — 53,295


Change in fair value of

financial derivatives ...................................................................................... — 111,324 — — 111,324



subsidiaries ................................................................................................ — 1,018,611 — — 8 1,018,611

Other financial expenses ................................................................................... 137,435 99,878 52,344 4 289,656

Net financial items ......................................................................................... (317,952) (1,025,666) (99,878) (416,044) (1,859,539)

Profit/(loss) before taxes ................................................................................. (2,545,327) 13,704,491 824,424 (2,054,805) 9,928,781

Taxes (+)/tax income (-) ................................................................................... (1,996,727) 11,257,690 657,521 (1,298,364) 7 8,620,120

Net income .................................................................................................. (548,600) 2,446,801 166,903 (756,441) 1,308,661

__________





100

The table below sets out the Company's unaudited pro forma income statement for the quarter ended 31 March 2014, as

if the Transaction had taken place at 1 January 2014.

NOK thousands Three months Ended

31 March 2014

Det nor

(IFRS)

(unaudited)

Marathon

(NGAAP)

(unaudited)

IFRS

adjustments

(unaudited)

Pro forma

adjustments

(unaudited)

Notes to IFRS

and pro

forma

adjustments

(unaudited)

Pro forma

ending 31

March 2014

(unaudited)


expenses


Other operating revenues .................................................................................. 3,241 527 — — 3,768


Exploration expenses ....................................................................................... 109,582 15,383 — — 124,965

Production costs ............................................................................................. 42,949 532,639 (10,230) — 1 565,358


expenses ................................................................................................... 4,559 — — 4,559

Depreciation ................................................................................................. 88,863 243,115 (70,314) 471,229 3, 4, 5 732,893

Provision for decommissioning............................................................................. — 83,837 (83,837) — 4 —

Impairment losses 167,373 167,373


Total operating expenses ................................................................................. 426,631 892,816 (164,381) 523,637 1,678,703

Operating

profit/(loss) ............................................................................................... (268,290) 3,237,368 89,787 (523,637) 2,535,228


expenses

Interest income .............................................................................................. 12,145 2,909 — — 15,054




subsidiaries ................................................................................................ — 62,374 — — 8 62,374

Other financial expenses ................................................................................... 20,530 66,882 25,945 14,948 4 128,306

Net financial items ......................................................................................... (60,475) (90,743) (25,945) (260,633) (437,797)

Profit/(loss) before taxes ................................................................................. (328,765) 3,146,625 63,842 (784,271) 2,097,431

Taxes (+)/tax income (-) ................................................................................... (312,981) 2,419,031 91,254 (445,553) 7 1,751,750

Net income .................................................................................................. (15,784) 727,594 (27,412) (338,717) 345,681

__________





101

Unaudited Pro Forma Balance Sheet

The table below sets out the Company's unaudited pro forma Statement of financial position as of 31 March 2014, as if the

Transaction had taken place at 31 March 2014.

NOK thousands As of

31 March 2014

Det nor

(IFRS)

(unaudited)

Marathon

(NGAAP)

(unaudited)

IFRS

adjustments

(unaudited)

Pro forma

adjustments

(unaudited)

Notes to IFRS

and pro

forma

adjustments

(unaudited)

Pro forma as

of 31 March

2014

(unaudited)

ASSETS

Intangible assets

Goodwill ...................................................................................................... 321,120 — — 9,978,247 5 10,299,367

Capitalised exploration

expenditures .............................................................................................. 1,555,348 250,741 — — 1,806,089

Other intangible assets ..................................................................................... 643,050 — — 6,531,090 5 7,174,140

Deferred tax assets.......................................................................................... 795,400 587,829 (587,829) — 7 795,400

Total intangible assets ..................................................................................... 3,314,918 838,570 (587,829) 16,509,337 20,074,996


Property, plant and

equipment ................................................................................................. 3,536,285 5,063,670 229,431 936,378 4, 5 9,765,764

Total tangible fixed assets ................................................................................ 3,536,285 5,063,670 229,431 936,378 9,765,764

Financial assets

Long term receivables ...................................................................................... 138,078 — — — 138,078

Calculated tax receivables ................................................................................. 148,004 — — — 148,004

Other non-current assets ................................................................................... 282,472 — — — 282,472

Investments in subsidiaries ................................................................................. — 4,789,680 (4,789,680) — 8 —

Total financial fixed assets ............................................................................... 568,554 4,789,680 (4,789,680) — 568,554

Total non-current assets .................................................................................. 7,419,757 10,691,920 (5,148,078) 17,445,715 30,409,314

Inventories

Inventories ................................................................................................... 39,549 112,652 — — 152,201

Total inventories ........................................................................................... 39,549 112,652 — — 152,201

Receivables

Account receivables ......................................................................................... 128,239 119,328 — 5,323,673 9 5,571,240

Account receivables – group

companies ................................................................................................. — 5,323,673 — (5,323,673) 9 —

Financial derivatives ........................................................................................ — 61,096 — — 61,096

Other short-term receivables .............................................................................. 617,286 362,362 186,614 — 1 1,166,262

Short-term deposits ......................................................................................... 24,375 — — — 24,375

Calculated tax receivables ................................................................................. 1,416,550 — — — 1,416,550

Total current receivables ................................................................................. 2,186,450 5,866,459 186,614 — 8,239,523

Cash and cash equivalents ................................................................................. 821,069 647,738 — — 1,468,807

Total current assets ........................................................................................ 3,047,067 6,626,850 186,614 — 9,860,531

Assets classified as held for

sale ......................................................................................................... — — 4,789,680 (4,789,680) 8, 9 —

TOTAL ASSETS ............................................................................................... 10,466,824 17,318,770 (171,784) 12,656,035 40,269,845

EQUITY AND LIABILITIES

Paid in capital

Share capital ................................................................................................. 140,707 6,757 — 42,881 6 190,345

Share premium ............................................................................................... 3,089,542 264,631 — 2,933,564 6 6,287,737

Total paid-in equity ........................................................................................ 3,230,249 271,387 — 2,976,445 6,478,082

Retained earnings

Other equity.................................................................................................. (57,563) 727,594 (166,067) (974,477) 6 (470,513)

Total retained earnings ................................................................................... (57,563) 727,594 (166,067) (974,477) (470,513)

Total equity.................................................................................................. 3,172,687 998,981 (166,067) 2,001,969 6,007,569

Provisions for liabilities

102

NOK thousands As of

31 March 2014

Det nor

(IFRS)

(unaudited)

Marathon

(NGAAP)

(unaudited)

IFRS

adjustments

(unaudited)

Pro forma

adjustments

(unaudited)

Notes to IFRS

and pro

forma

adjustments

(unaudited)

Pro forma as

of 31 March

2014

(unaudited)

Pension obligations .......................................................................................... 36,375 50,937 51,481 — 2 138,793

Deferred taxes ............................................................................................... — — 401,905 5,061,275 5, 7 5,463,180

Abandonment provision ..................................................................................... 829,720 2,114,183 (542,882) 936,378 4, 5 3,337,339

Provisions for other liabilities ............................................................................. 696 — — — 696

Total provisions ............................................................................................. 866,791 2,165,120 (89,497) 5,997,653 8,940,068


Bonds .......................................................................................................... 2,475,559 — — (593,240) 6 1,882,319

Other interest-bearing debt ............................................................................... 2,150,288 — — 12,118,619 6, 9 14,268,907

Long-term debt – group

companies ................................................................................................. — 3,374,135 — (3,374,135) 9 —

Derivatives ................................................................................................... 48,228 13,430 — — 61,658

Total non-current liabilities .............................................................................. 4,674,075 3,387,565 — 8,151,244 16,212,884

Current liabilities

Short-term loan .............................................................................................. 680,794 — — (680,794) 6 —

Trade creditors .............................................................................................. 218,370 351,546 — 60,884 9 630,800

Accounts receivable – group

companies ................................................................................................. — 60,884 — (60,884) 9 —

Accrued public charges and

indirect taxes.............................................................................................. 24,457 108,540 — — 132,997

Abandonment provisions ................................................................................... 156,397 77,964 — — 234,361

Other current liabilities .................................................................................... 673,254 492,748 83,780 84,675 1, 6 1,334,457

Dividend ...................................................................................................... — 2,890,000 — (2,890,000) 9 —

Taxes payable ................................................................................................ — 6,785,421 — (8,712) 6, 7 6,776,709

Total current liabilities .................................................................................... 1,753,272 10,767,104 83,780 (3,494,831) 9,109,325

Total liabilities .............................................................................................. 7,294,137 16,319,789 (5,717) 10,654,067 34,262,277

TOTAL LIABILITY AND

EQUITY ..................................................................................................... 10,466,824 17,318,770 (171,784) 12,656,035 40,269,845

__________


Classification of the Marathon accounts is made by the Company based on input from Marathon.

The notes to the unaudited pro forma financial information are an integral part of the unaudited pro forma statement of

financial position information.

Notes to the Unaudited IFRS and Unaudited Pro Forma Adjustments

Marathon Norway has historically presented its financials in accordance with NGAAP. In connection with the compilation

of the unaudited pro forma financial information, unaudited differences between IFRS and NGAAP were identified and the

resulting adjustments are presented in a separate column the unaudited pro forma financial information and described in

the notes below.

When applicable, the adjustments related to pro forma financial information are shown separately in each note below.

All amounts are expressed in NOK 1,000, unless otherwise specified.

1) Revenue recognition

The Company recognizes revenues from petroleum products on the basis of the Company’s ideal share of production

during the period, regardless of actual sales (entitlement method). Marathon Norway has recognised revenues when title

passes to the customer at the point of delivery based on the contractual terms of the sales agreements (sales method).

Hence, the Marathon Norway revenues have been adjusted to reflect the ideal share of production instead of the actual

sales. The costs related to the adjusted revenues were also adjusted.

103

Income Statement: 1Q 2014 2013

Increased (decreased) revenue (74,593) (34,339)

Increased (decreased) cost (10,230) (8,983)

Net impact before tax (64,363) (25,356)

The different accounting principle on revenue, also impacts the valuation of over/underlift. The Company set the value

of over/underlift at the estimated sales value, minus estimated sales costs. For Marathon Norway, over/underlift is valued

at production cost.

Statement of financial position:

Increase underlift asset 31.03.2014 186,614

Increase overlift liability 31.03.2014 83,780

The adjustments will have continuing impact.

2) Pensions

Marathon Norway has applied the "corridor method" as allowed under NGAAP (NRS 6). Hence, accumulated losses in excess

of 10% of the benefit obligation are amortised over the remaining service period of active plan participants. The corridor

method is not in accordance with IAS 19, where any actuarial gains and losses need to be recognised immediately in other

comprehensive income.

The actuarial assumptions applied are not identical for the two companies, but the impact from the deviations is not

material for the pro forma financial information. The actuarial report has not been recalculated to reflect the

assumptions as of 31.03.2014. However, the number of employees both in the Company and Marathon Norway have been

quite stable during 1Q 2014, and the assumptions (discount rate etc.) have not changed significantly. Consequently, it is

estimated that the pension obligation remains the same at 31 March 2014 as it was at 31 December 2013.

The unrecognised actuarial losses as of 31 March 2014 amounts to 51,481 according to the above mentioned actuary

report and is reflected in the pro forma statement of financial position. Regarding the Income Statement, reversal of

amortisation of corridor under NGAAP is deemed insignificant. The adjustments will have continuing impact.

3) Depreciation

Both the Company and Marathon Norway apply unit of production method (“UOP”) as the depreciation method for oil and

gas fields. However, the Company’s UOP is based on proved and probable reserves while Marathon Norway applies only

proved reserves in its calculation of depreciation.

The Marathon Norway depreciation is therefore adjusted as follows:


Decreased (-) depreciation based on 2P reserves - 83,250 - 624,335

Depreciation of ARO asset (see note 4) 12,936 64,986

Net impact before tax - 70,314 - 559,349

Pro forma adjustments

1Q 2014 2013

Depreciation field excess values 471,229 1,586,354

The depreciation was recorded based on the excess values identified in note 5 below using the unit of production

method. The deprecation has been calculated based on the depreciation rate/barrel in the PPA and the production in the

periods.

All the adjustments will have continuing impact.

4) Decommissioning and removal cost

In accordance with IFRS the Company records decommissioning and asset retirement obligations (“ARO”) based on the net

present value of the future related expenses. A corresponding asset is capitalised as a tangible fixed asset, and

104

depreciated using the unit of production method. Changes in the time value (net present value) of the obligation related

to decommissioning and removal accretion are charged to the income statement as financial expenses, and increase the

liability related to future decommissioning and removal expenses. Changes in the best estimate for expenses related to

decommissioning and removal are recognised in the statement of financial position. The discount rate used in the

calculation of the fair value of the decommissioning and removal obligation is the risk-free rate with the addition of a

credit risk element.

Marathon Norway has accrued the estimated costs of decommissioning and removal of producing facilities using the unit of

production method based on proved reserves. The estimates used are based on future undiscounted cash flows. As a

result the tangible fixed ARO asset and the ARO obligation has been calculated for Marathon Norway including related

depreciation and accretion.


Adjusted provision for decommissioning (83,837) (390,309)

Depreciation of ARO asset 12,936 64,986

Accretion expense 25,945 99,878

Discount rate applied for accretion 6.54% 5.59%

The initial amount presented as provision for decommissioning in the NGAAP Income Statement of Marathon Norway for

2013, was 371,985. Hence, the adjustment of 390,309 in 2013 results in a credit (income) decommissioning cost

amounting to 18,325. This is related to decreased removal estimates for Gassled assets from year end 2012 to year end

2013. As shipper of gas through the Gassled infrastructure, Marathon Norway has a contractual obligation to cover a

proportionate share of the removal of the Gassled facilities. Since Marathon Norway is not a Gassled owner, no

corresponding removal asset is recognised, and the cost will be charged directly to the income statement based on

shipped gas for the year. Marathon Norway does not longer have an interest in any producing fields transporting gas via

the Gassled infrastructure. Hence, except for the accretion expense, the yearly cost charged to the income statement

will be related to updated removal estimates only. In 2013 there was a reduction in this estimate, resulting in the

mentioned credit of 18,325. In 1Q 2014 there has been no updates in the estimate of removal cost for the Gassled

facilities.

Statement of financial position:

Long term provision for ARO as of 31.03.2014 1,571,301

Marathon Norway booked ARO as of 31.03.2014 2,114,183

GAAP adjustment - 542,882

Recognised ARO asset as of 31.03.2014 229,431

Discount rate applied 6.54%

The gross value of the ARO asset corresponds to the related gross obligation. When estimating the net book value of this

asset, it is assumed that it has been charged with the same proportionate accumulated depreciation as the related PP&E

investment.


In the purchase price allocation (“PPA”) as further described in note 5 below, the Company has applied a different

estimate for decommissioning cost than Marathon Norway. This results in an increased provision of 936,378 with a

corresponding asset as of 31 March 2014. The asset, along with the excess value for producing licenses, is depreciated

using the UOP method based on proved and probable reserves. The calculated impact on depreciation and accretion in

the income statement is as follows:


Depreciation of excess value 471,229 1,586,354

Accretion expense 14,948 52,344

All the adjustments will have continuing impact.

105

5) Purchase price allocation – PPA


The Company has for the purpose of the pro forma financial information provisionally performed an allocation of the cost

of the business combinations to the assets acquired and liabilities and contingent liabilities assumed in accordance with

IFRS 3. This allocation has formed the basis for the amortisation and depreciation charges in the Pro Forma Income

Statements and the presentation in the Pro Forma Statement of Financial Position.

The consideration is USD 2,041 million or NOK 12,248 million, assuming NOK/USD rate 6.0 (source: Norges Bank) as of 13

June 2014. Net book value in Marathon Norway as of 31 March 2014, after the IFRS adjustments is NOK 833 million,

resulting in an excess of the fair value over the net book value of NOK 11,415 million.

The Company has provisionally determined that the excess value based on the purchase price compared to book values as

of 31 March 2014 primarily relates to licenses related to producing properties, deferred taxes and goodwill. As there

exists no pre-tax market for oil and gas assets in Norway, cf. the PTA section 10, no tax amortisation benefit is

calculated. The final allocation may significantly differ from this allocation and this could materially have affected the

depreciation and amortisation of excess values in the pro forma income statement and the presentation in the pro forma

statement of financial position. The main uncertainty relates to fair value of the licenses.

The historical depreciation in Marathon Norway has been based on proved reserves, and for pro forma purposes the

opening book values have not been adjusted to reflect depreciation based on proved and probable reserves. Going

forward, the excess value will be depreciated in accordance with UOP based on proved and probable reserves in line with

the reserve base applied for the Company’s other oil and gas assets.

Goodwill will not be depreciated, but will be subject to yearly impairment test in accordance with IAS 36. No impairment

is recognised in the pro forma financial information.

Provisional allocation of excess value

Licenses related to producing properties 6,531 MNOK

Increased decommissioning liability - 936 MNOK

Decommissioning asset 936 MNOK

Goodwill 9,978 MNOK

Deferred tax liability (78% rate) - 5,094 MNOK

Total excess value 11,415 MNOK

The fair values of these assets and liabilities have been determined on a preliminary basis and is subject to change

pending additional information that may become available prior to or upon completion of the transaction. The split

between the various assets may subsequently change after the completion of the purchase price allocation. If more of the

cost of the business combination should be allocated to producing properties the pro forma income statements would

have shown higher amortisation expenses.

The excess value for mineral licenses related to producing properties including decommissioning asset is depreciated

using the unit of production method estimated based on the preliminary purchase price allocation. This resulted in

additional amortisation of NOK 1,586 million in 2013 and NOK 471 million in 1Q 2014, based on the historical actual

production in those periods (see note 4).

All these adjustments will have continuing impact.

6) Transaction cost, financing and equity


The transaction is financed both by equity and loans. The main Shareholder of the Company, Aker Capital AS, has

committed to subscribe for a number of shares pro rata to its shareholding in the Company. The remaining shares issued

in the Rights Issue are fully underwritten by the Underwriters. The proceeds of USD 500 million have been included in the

Pro Forma Statement of Financial Position. This has been included assuming NOK/USD rate 6.0 (source: Norges Bank) as of

13 June 2014. The remaining part of the financing is covered by the RBL Facility which will replace the main part of the

pre transaction loan facilities. The loan depending on the exploration tax refund may be terminated, as the Company

post transaction expects positive taxable income for 2014.

The transaction costs to be expensed and unrelated to financing activities are estimated to 52,408. These are not tax

deductible and are expensed in the Unaudited Pro Forma Income Statements and included in the pro forma balance sheet

106

as a reduction in other equity and a corresponding increase in other current liabilities. This pro forma adjustment will not

have continuing impact.

The cost related to financing arrangements and related work is estimated to 10,217. This is included in the financing cost

and amortised over the maturity of the loan and will as such have continuing impact.

The cost related to capital increase is estimated to 32,267 (23,555 net of 27% tax) and is recorded against other paid in

capital in the Pro Forma Statements of Position. This pro forma adjustment will not have continuing impact.

The finance cost (interest and amortised fees) for the pre transaction loan facilities are removed from the Pro Forma

Income Statements and replaced by the finance cost for the new RBL Facility. The RBL Facility is in the amount of

USD 3.0 billion and USD 2.0 billion is expected to be drawn at the date of the Transaction. The RBL Facility bears an

interest of LIBOR + margin. The interest expense included in the unaudited pro forma income statements has been

calculated based on historical LIBOR in the periods.

In addition, there has been cost related to a short term loan facility (the “Certain Funds Acquisition Bridge Facility”).

The Company does not expect to draw down any amounts from this short term loan, but the cost related to the

establishment of this loan has been expensed in the Pro Forma Income Statements. This adjustment will not have

continuing impact.

The net pre-tax increase in financial cost as a result of the new financing structure is 363,700 for 2013 and 245,685 for 1Q

2014. These adjustments partly consist of increased interest due to higher loans (continuing impact) and partly of

expensed remaining amortisation of the replaced loan facilities (no continuing impact). The remaining amortisation as of

31 March 2014 is booked against equity with a net of 27% tax amount of 89,155. The corresponding amount booked to

deferred tax is 32,975.

7) Tax

As allowed under NGAAP, the tax impact of future uplift is recognised as a deferred tax asset in Marathon Norway’s

Financial Statements. Such recognition is not allowed under IAS 12 and is adjusted as a GAAP difference both in the pro

forma income statements and the pro forma statement of financial position. This adjustment will have continuing impact.

Each GAAP- and pro forma–adjustment is charged with the applicable tax rate. For 2013 the statutory tax rate was 28%

and the special petroleum tax rate was 50%. The corresponding rates for 1Q 2014 was 27% and 51%.

The Company expects Marathon Norway and the Company to be consolidated for tax purposes within 2014. As this is not

concluded upon at the date of this Prospectus, the tax positions (including taxable income and loss for the financial year

2014) have not been offset for the purpose of the Pro Forma numbers.

8) Assets held for sale

As at 31 March 2014 Marathon Norway indirectly held 12.66% of the Marathon group’s interest in the Canadian Athabasca

oil sands project and other Canadian oil sands assets. This interest was sold to another company in the Marathon group in

April 2014 and is specifically identified in the SPA. As of 31 March 2014 this investment is consequently presented as

assets held for sale at fair value. In 2013 there was booked an impairment of 1,018 million NOK on this subsidiary. In 1Q

2014 an impairment of 62 MNOK was recorded to reach the NOK value of the fair value sales price.

As this subsidiary will be sold at the transaction date, consolidated Income Statements including the Canadian activity,

has not been prepared for pro forma purposes.

These adjustments will not have continuing impact.

9) Reclassifications and netting

Marathon Norway has receivables/payables against Marathon group companies. As a part of the IFRS adjustments, these

amounts are reclassified to external payables/receivable in the Pro Forma Statement of Financial Position.

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In addition, there is a provision in the SPA requiring Marathon Norway to repay or procure the repayment of Marathon

Norway intragroup indebtedness. This must be done on or before the date of the completion of the Transaction, but does

not include any items on normal trading account. The corresponding netting related to this provision is as follows in the

Pro Forma Statement of Financial Position:

Assets held for sale 4,789,680

Dividend - 2,890,000

Long term debt – group companies - 3,374,135

Remaining part to be transferred to other interest bearing debt - 1,474,455

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13. OPERATING AND FINANCIAL REVIEW

This operating and financial review should be read together with Section 12 "Selected Financial and Operating

Information" and the Financial Statements which are included in appendix A—Financial Statements to this Prospectus.

The following discussion contains Forward-looking Statements that reflect the Company’s plans and estimates. Factors

that could cause or contribute to differences to these Forward-looking Statements include, but are not limited to, those

discussed in Section 2 "Risk Factors" and Section 4.1 "General Information—Cautionary Note Regarding Forward-Looking

Statements".

13.1 Introduction

The Company is active in exploration, development and production of petroleum resources on the Norwegian shelf. In

addition, the Company has a separate Johan Sverdrup business unit to manage its interest due to the importance of this

asset in the Company’s portfolio. The Company carries out all its activities through a single company which holds no oil or

gas assets outside of Norway. All activities are, consequently, within the Norwegian offshore tax regime, and to the

extent the Company has overseas activities, these are related to construction and engineering of field development

projects.

13.2 Principal Factors Affecting the Company’s Financial Condition and Results of Operations

In 2013 the PDO for the Ivar Aasen and Gina Krog fields were approved by Stortinget; both important milestones on the

path towards an increase of production from 2016/2017. During 2013, the partners in the giant Johan Sverdrup oil field

navigated steadily towards a development concept decision. Production tripled to 1.6 million barrels of oil equivalents as

Jette came into production. On the exploration front, the Company participated in the Gohta discovery in the Barents

Sea, a new exploration play in this region.

The Company estimates end 2013 P50 net reserves for the Company at 65.8 million boe. The “Development Pending”

contingent resource estimate ranges from 54 to 100 million barrels of recoverable oil equivalents, excluding Johan

Sverdrup. The operator Statoil has reported gross field recoverable resources for Johan Sverdrup in the range of 1,800 –

2,900 million boe. An unitisation process is on-going. The Company has a 20% interest in PL265 and 22.22% in PL502,

which encompasses the western part of the field.

The Company has an on-going major investment program, and Ivar Aasen and Johan Sverdrup are the two largest

investments. Financial robustness is important for safeguarding the value in these projects. In 2013, the Company

doubled its bank field development facility to USD 1 billion and increased the accordion option from USD 100 million to

USD 1 billion. Additionally, in July, the Company placed a NOK 1.9 billion bond at NIBOR + 500 basis points. These actions

strengthened the Company’s investment capacity. In order to complete all current development projects, additional

funding is required and the Company is continuously considering various sources of funding to facilitate the expected

growth of the Company.

Since the discovery of the Johan Sverdrup field in 2010, 31 exploration and appraisal wells have been drilled to further

map the field. Production in the first phase of the development could be as high as 380,000 barrels per day. Production at

plateau is estimated at between 550,000 and 650,000 barrels per day. The Company’s ownership interest in this field will

be determined through an unitisation process and a conclusion is expected in early 2015.

Production from Jette commenced in May 2013. Jette is a subsea development, and the oil is transported to Jotun for

processing and export. Jette has produced 0.97 million boe net to the Company during 2013. This was below previous

estimates. Estimated reserves were thus reduced, and the value of the field was impaired in the fourth quarter of 2013

accounts by NOK 349 million in addition to an impairment charge in the third quarter of 2012 of NOK 1,881 million A

further reserve reduction in 2014 resulted in an impairment charge of NOK 167 million in the first quarter of 2014

(restated).

In the Company’s portfolio of planned and on-going development projects, Ivar Aasen and Johan Sverdrup stand out as

the two main pillars. These two assets give the Company a strong position in the new oil province on the Utsira High. The

two significant discoveries made in 2013, Askja (near Oseberg) and Gohta (in the Barents Sea) strengthen the Company’s

portfolio of discoveries for the future, and it also has a strong portfolio of exploration licenses. The Company is, however,

conscious of the risk associated with project execution and increasing investment costs being experienced by the

industry. The Company has a clear focus on capital discipline and risk mitigation, wherever possible. The Company

recognises the demands of successfully navigating a transition from an exploration company to a mid-sized E&P company

and believes the Company has the resources to succeed.

In addition to the above, the Company’s business, financial condition, results of operations and cash flows, as well as the

period-to-period comparability of the Company's financial results, are affected by a number of factors, see section 2

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("Risk Factors"). Some of the factors that are reasonably likely to affect the Company’s financial condition and results of

operations are:

Oil Price development. The Company has producing assets, and will after consummation of the Transaction, have

substantial producing assets, mainly in oil rich fields. The revenues and financial situation of the Company will hence

depend on the development in the market price for oil and gas.

The cost associated with field development. The Company has material assets that are in a development phase or

planned to enter into a development phase within the next year. The costs associated with field development are

affected by any change in market conditions, and the Company’s financial result may thus be affected by any

significant change in the cost associated with field development.

Development in market rates. The Company has entered into several loan agreements in the bond and bank market

providing finance for the planned development of the Company’s assets. These loan agreements have floating

interest rates and the Company’s financial result is hence contingent upon the development in the intra bank market

rates of NIBOR and LIBOR.

13.3 Reporting Segments

The Company's business is entirely related to exploration for and production of petroleum in Norway. The Company's

activities are considered to have a homogeneous risk and return profile before tax and the business is located in the

geographical area Norway. Thus, the Company operates within a single operating segment.

13.4 Recent Developments and Current Trading

Key events during the second quarter 2014:

On 8 July, the Company finalised the up to USD 3.0 billion long-term reserve-based lending facility (the RBL

Facility)

On 30 June, the Company announced a unit agreement for the Ivar Aasen field and a 35% increase in recoverable

reserves

On 26 June, the Company announced a swap agreement with E.ON that, subject to completion, will increase the

Company’s interest in PL457 by 20%

On 20 June, the Company announced that well 6507/5-7 on the Terne prospect did not encounter hydrocarbons

On 17 June, the Company announced that the company had signed an agreement to swap 10% of PL554/B/C

containing the Garantiana discovery for a 20% interest in PL457 containing the Asha discovery

On 2 June, the Company announced that the company had entered into an agreement to acquire Marathon

Norway for a cash consideration of USD 2.1 billion

On 2 June, the Company announced that the Board of Directors had proposed a fully underwritten rights issue of

the NOK equivalent of USD 500 million in new equity

On 27 May, the Company announced that well 31/2-21S on the Gotama prospect did not encounter reservoir

quality sandstones in the Upper Jurassic main target

On 29 April, the Company announced that the Geitungen side-track encountered a 12-metre oil-bearing interval

of medium good reservoir.

A reserve reduction on Jette resulted in an impairment charge of NOK 167 million recognized in the first quarter of 2014

(restated). See further details in Section 13.5 “Operating and Financial Review – Result of Operations”.

Except for the Transaction and the above mentioned items, there have been no changes to the Company’s financial or

trading position since 31 March 2014. Reference is also made to section 13.9 (“Operating and Financial Review—Investing

Activities”).

13.5 Results of Operations

Operating Results for the three Months Ended 31 March 2014 (restated) Compared to the three Months Ended 31

March 2013 (in parentheses)

Operating revenues in the first quarter of 2014 was NOK 158 (80) million. The main cause of increase is that Jette

commenced production in the second quarter 2013. Production in the quarter increased by 50% from 1,929 boepd in the

first quarter of 2013 to 2,895 boepd in the first quarter of 2014. Jette accounted for 1,458 (0) boepd and Atla for 750

(1,253) boepd.

Exploration expenses amounted to NOK 110 (234) million for the first quarter of 2014. The Company expensed costs

relating to the Langlitinden well in PL 659 as well as other exploration costs. During the second quarter of 2014, the

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production on Jette indicated that the remaining reserves as of 31 March 2014 were too low to carry the book value of

the field. An impairment test was performed, resulting in an impairment charge of NOK 167 million (pre-tax) in the first

quarter of 2014 (restated)

The operating loss increased to NOK 268 (251) million for the first quarter of 2014. The main reason for the increase was

the impairment on Jette, partly offset by increased revenues and decreased exploration expenses. Net financial expenses

in the first quarter of 2014 amounted to NOK 60 (32) million.

The net profit/(loss) for the first quarter of 2014 was NOK -16 (-20) million after a tax income of NOK 313 (262) million.

This translates to a tax rate of 95%, mainly due to uplift, a special income deduction in the basis for calculation of

petroleum tax, on previous years’ investments.

Operating Results for the Year Ended 31 December 2013 Compared with Year Ended 31 December 2012 (in

parentheses)

The Company’s total operating revenues amounted to NOK 944 (332) million for 2013. Petroleum from the producing

fields amounted to 1,629,000 (545,000) boe. The production in 2013 is from the fields Jette, Atla, Jotun, Varg and Glitne,

while the production in 2012 is from Jotun, Varg, Enoch and Glitne. The average realised oil price was USD 107 per

barrel, which is down 7% compared with an average price of USD 115 per barrel in 2012.

Exploration expenses amounted to NOK 1,637 (1,609) million in 2013 and are mainly related to dry and non-commercial

wells, seismic data and general exploration activities.

Gross payroll expenses before recharges amounted to NOK 444 (372) million in 2013. Net payroll expenses were NOK 38

(11) million. The net reported payroll expense is lower because expenses related to exploration, development and

production activities are invoiced to operated licenses or allocated directly to their respective categories of activities.

Depreciation amounted to NOK 471 (112) million in 2013. The increase is mainly due to depreciations of Jette which came

on stream in May 2013 and Atla, which came on stream in October 2012.

Net impairments of tangible fixed assets and intangible assets amounted to NOK 666 (2,150) million in 2013. The main

reason for the higher impairment charge in 2012 was challenges experienced while drilling production wells on the Jette

field, which resulted in an impairment of NOK 1,881 million in the third quarter of 2012. An additional impairment

related to Jette was recorded in 2013 with NOK 349 million. In both 2013 and 2012, impairments were also recognised for

some licenses due to increased plugging and abandonment liabilities and relinquishment of licenses.

Other operating expenses amounted to NOK 110 (83) million for the Company in 2013, of which area fees accounted for

NOK 58 (52) million and preparation for operation of development licenses accounted for NOK 30 (19) million. The net

reported operating expense is low because expenses related to activities within exploration, development and production

are invoiced to operated licenses or allocated directly to their respective categories of activities.

The Company reported an operating loss of NOK 2,227 (3,843) million for 2013. The pre-tax loss amounted to NOK 2,545

(3,949) million, and the tax income on the ordinary loss amounted to NOK 1,997 (2,992) million. The after-tax loss was

NOK 549 (957) million.

Operating Results for the Year Ended 31 December 2012 Compared with Year Ended 31 December 2011 (in

parentheses)

The Company's total operating revenues amounted to NOK 332.4 (437.5) million for 2012. Petroleum from the producing

fields Varg, Enoch, Glitne, Jotun and Atla amounted to 545,000 (548,000) boe and was sold at an average price of USD

114.5 per barrel, which is up 2.7% compared with an average price of USD 111.5 per barrel in 2011. The higher operating

revenues in 2011 include other income of NOK 65.4 million.

Total exploration expenses amounted to NOK 1,609.3 (1,012.2) million in 2012 and are mainly related to dry wells,

seismic data and general exploration activities. The higher expenses in 2012 are mainly a result of drilling wells that were

deemed non-commercial.

Gross payroll expenses before recharges amounted to NOK 371.6 (376.9) million in 2012. Net payroll expenses were

reduced to NOK 11.0 (31.7) million. The net reported payroll expense is lower because expenses related to exploration,

development and production activities are invoiced to operated licenses or allocated directly to their respective

categories of activities.

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Depreciation amounted to NOK 111.7 (78.5) million in 2012. The increase is mainly due to depreciations of Atla which

came on stream in October 2012.

Net impairments of tangible fixed assets and intangible assets amounted to NOK 2,149.7 (151.0) million in 2012. The main

reason for the high impairment charge in 2012 is the previously mentioned challenges experienced while drilling

production wells on the Jette field. This resulted in an impairment of NOK 1,881 million in the third quarter of 2012. In

addition, impairments were recognised for some licenses due to increased plugging and abandonment liabilities and

relinquishment of licenses.

Other operating expenses amounted to NOK 82.8 (60.8) million for the Company in 2012, of which area fees accounted for

NOK 51.6 (43.4) million and preparation for operation of development licenses accounted for NOK 18.7 (0.0) million. The

net reported other operating expense is low because expenses related to activities within exploration, development and

production are invoiced to operated licenses or allocated directly to their respective categories of activities.

The Company reported an operating loss of NOK 3,842.9 (1,078.5) million in 2012. The pre-tax loss amounted to NOK

3.948,9 (1,310.9) million for 2012, and the tax income on the ordinary loss amounted to NOK 2,991.6 (940.6) million. The

after-tax loss for 2012 was NOK 957.3 (370.3) million.

13.6 Financial Condition

As of 31 March 2014 (restated) Compared with As of 31 March 2013 (in parentheses)

The equity ratio as of 31 March 2014 was 30.3% (42.3%). Discoveries and fields under development contributed to a total

asset balance of NOK 10,467 (8,794) million as of 31 March 2014.

As of 31 December 2013 Compared with As of 31 December 2012 (in parentheses)

Total assets at year-end amounted to NOK 10,541 (8,364) million as of 31 December 2013 and the increase was mainly

caused by capital expenditures in development projects and deferred tax assets.

Equity decreased by NOK 548 (62) million to NOK 3,188 million as of 31 December 2013, caused by the net loss. At year-

end 2013, equity amounted to approximately 31% (45%) of total assets.

At 31 December 2013, total interest-bearing liabilities amounted to NOK 4,989 (2,456) million. A new USD 1 billion credit

facility was established, including an additional USD 1 billion uncommitted accordion option. The facility replaced the

prior USD 500 million revolving credit facility. The Company also successfully completed a NOK 1.9 billion bond offering.

Cash and cash equivalents totalled NOK 1,709 (1,154) million at the end of the year 2013.

As of 31 December 2012 Compared with As of 31 December 2011 (in parentheses)

Total assets at year end amounted to NOK 8,364.4 (7,716.0) million as of 31 December 2012 and the increase was mainly

caused by capital expenditures in development projects.

Equity increased by NOK 61.8 million to NOK 3,738.4 million as of 31 December 2012. The net loss caused a reduction of

equity, whilst the issue of new shares caused an increase. At year-end 2012, equity amounted to approximately 45% (48%)

of total assets.

At 31 December 2012, total interest-bearing liabilities amounted to NOK 2,455.9 (966.6) million. A new loan was entered

into in order to contribute to financing of development projects.

Cash and cash equivalents totalled NOK 1,154.2 (841.6) million at the end of the year 2012.

In the fourth quarter of 2012, the Company carried out an equity issue with institutional investors, corresponding to 10%

of the share capital. The Company received NOK 1,019.1 million after deduction for share issue costs. Following the

placement, the total number of outstanding shares increased to 140,707,363.

In late 2011, a USD 500 million corporate facility was entered into and during 2012 it has been utilised with NOK 1,299.7

million as of 31 December 2012. The Company renewed in 2012 a credit facility of NOK 3,500 million with a group of

banks.

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13.7 Liquidity and Capital Resources

Overview; Sources and Uses of Funds

The Company maintains sufficient liquidity in its regular bank accounts at all times to cover expected payments relating

to operational activities and investment activities for two months ahead. In addition, short-term (12 months) and long-

term (five years) forecasts are prepared on a regular basis to plan the company’s liquidity requirements. These plans are

updated regularly for various scenarios and form part of the decision basis for the Company’s Board of Directors.

Excess liquidity is defined as a portfolio consisting of liquid assets other than the funds deposited in regular current

accounts and unused credit facilities. This means that excess liquidity includes high-interest accounts and financial

investments in banks, money-market instruments and bonds. For excess liquidity, the requirement for low liquidity risk

(i.e. the risk of realisation at short notice) is generally more important than maximising the return.

Some reporting requirements are associated with the agreement with the bank syndicate that furnished the credit

facility, including quarterly updates of a revolving liquidity budget for the next 12 months. The Company met these

requirements in 2013. As of 31 March 2014, the Company’s excess liquidity is mainly deposited in bank accounts.

As of 31 March 2014, the Company had cash reserves of NOK 821 million, compared to NOK 1,709 million as of 31

December 2014. However, the combination of limited production revenues and active exploration and development

programmes require active management of liquidity risk.

The Company has various means available to it to handle increased future capital requirements such as raising additional

funds through debt, portfolio adjustments or equity issues.

Borrowings

NOK 3,500 million Exploration Facility

In December 2012, the Company entered into an exploration loan facility of NOK 3,500 million with a group of Nordic and

international banks. The Company can draw on the facility until 31 December 2015 with a final date for repayment in

December 2016. The maximum draw down amount including interest is limited to 95% of tax refund related to exploration

expenses. The calculated exploration tax receivable as a result of exploration activities in 2013 is expected to be paid in

December 2014, and will be used to repay this loan. The interest rate is three months' NIBOR plus a margin of 1.75% p.a.,

with a utilisation fee of 0.25% p.a. on outstanding loan up to NOK 2,750 million and 0.5% if the utilised credit exceeds

NOK 2,750 million. In addition a commitment fee of 0.7% p.a. is also payable on unused credit.

Each lender will be entitled to cancel its loan commitments and declare its participation in the loan (including interest

and other amounts accrued) due and payable if, among other things, any other person or groups of persons acting in

concert (other than Aker ASA, directly or indirectly) obtains 50% or more of the shares or votes or otherwise gains control

without prior consent of all the lender (but consent from the lenders not to be unreasonable withheld), or if Aker ASA,

directly or indirectly, (or another reputable company involved in the business of oil exploration, acceptable to the

lenders) does not hold a minimum shareholding of 25% in the Company.

The exploration loan facility is secured by a security package consisting of inter alia a first priority security interest in the

Company’s tax receivable, a first priority security interest in certain of the Company’s exploration licenses and a second

priority security interest in certain of the development and production licenses.

NOK 600 million Bond Loan

In January 2011, the Company issued a NOK 600 million unsecured bond loan with Norwegian Trustee as trustee. The loan

carries interest at a rate equal to 3 month NIBOR + 6.75% p.a. The margin is dependent on ten equity ratio test and

increases by 0.50 percentage points for every 0.25 percentage points the adjusted equity ratio is below 30 %.The

principal falls due on 28 January 2016 and interest is paid on a quarterly basis. If any person or group other than Aker ASA

becomes the owner (directly or indirectly) of more than 50% of the outstanding shares of the Company, each bondholder

will have a right of early repayment of its bonds at a price of 100% of par plus accrued interest.

The bond loan agreement contains restrictions as to distribution of dividend, pursuant to which the Company not is

entitled to make any dividend payments or other distributions or loans to its shareholders that constitute more than 50%

of the Company’s net profit after taxes for the previous financial year, provided that the equity ratio is and remains

above 25% for the group (i.e. the Company and its subsidiaries) on a consolidated basis. However, the Company shall be

entitled to repurchase own shares to cover any potential obligations under any bonus share programs for board members

or employees.

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NOK 1,900 million Bond Loan

In July 2013, the Company issued a NOK 1,900 million unsecured bond loan with Norwegian Trustee as trustee. The loan

carries interest at a rate equal to 3 month NIBOR + 5% p.a. The principal falls due in July 2020 and interest is paid on a

quarterly basis. If any person or group other than Aker ASA or any affiliate company of Aker ASA becomes the owner

(directly or indirectly) of more than 50% of the outstanding shares of the Company, each bondholder will have a right to

require that the issuer redeems its bonds at a price of 101% of par plus accrued interest.

The bond loan agreement contains restrictions as to the distribution of dividends, pursuant to which the Company is not

entitled to make any dividend payments or repurchase of shares or other equity distributions to its shareholders

exceeding 50% of the Company’s consolidated net profit after taxes based on the audited annual accounts for the

previous financial year, however, always provided that the equity ratio is and remains above 25% for the group (i.e. the

Company and its subsidiaries) on a consolidated basis. However, the Company shall be entitled to repurchase its own

shares to cover any potential obligations under any bonus share programs for board members or employees.

USD 1 billion Revolving Credit Facility

In September 2013, the Company entered into a USD 1 billion revolving credit facility with a group of Nordic and

international banks. The revolving credit facility can be increased with USD 1 billion on certain conditions. The Company

can draw on the facility until September 2018 with a final date for repayment as of September 2018. The interest rate on

the revolving credit facility is from 1 - 6 months NIBOR/LIBOR plus a margin of 3% p.a., with a utilisation fee of 0.5% or

0.75% based on the amount drawn under the facility. In addition a commitment fee of 1.20% is also paid on unused credit.

If Aker ASA ceases to own and be able to vote for (directly and/or indirectly) more than 1/3 of the voting shares in the

Company, or if any person or group of persons acting in concert (other than Aker ASA directly or indirectly) are able to

vote for more than 1/3 or more of the voting shares of the Company, none of the lenders shall be obligated to participate

in any further utilisation of the loan and cancel its commitments and request that is participation in the utilisations is

repaid with thirty days’ notice.

The loan agreement contains restrictions as to the distribution of dividends, pursuant to which the Company is obligated

to not declare, make or pay any dividend or other distribution in respect of its share capital, repay or distribute dividend

or share capital reserve or redeem, repurchase or repay any share capital or resolve to do so. However, the restrictions

do not apply to the Company’s acquisition of its own shares for the sole purpose of any employee share based incentive

program within certain limitations, or payment of dividend corresponding to 50% of the net proceeds received from a

disposal of certain assets in the year following the disposal, subject to certain conditions.

The revolving credit facility is secured by a security package consisting of inter alia a second priority security interest in

the Company’s tax receivable, a first priority security interest in certain of the Company’s interests in exploration

licenses and a second priority security interest in certain of the development and production licenses.

USD 2,200 million Certain Funds Acquisition Bridge Facility

The Company is party to a USD 2,200 million Certain Funds Acquisition Bridge Facility agreement entered into on 1 June

2014. The purpose of this facility is to finance the payment of the purchase price for the shares in Marathon Oil Norway

AS. The facility is currently undrawn. The original termination date of the facility is 31 December 2014, with an option for

the Company to extend the termination date to 23 May 2015. The payable interest on amounts drawn under the facility is

3 months LIBOR plus a margin of 4.00% in the first three months after 1 June 2014, 4.50% thereafter and until the date

falling six months from 1 June 2014, 5.00% thereafter and until the date falling nine months after 1 June 2014 and 5.50%

thereafter and until the termination of the facility. If the Company exercises its option to extend the termination date to

23 May 2015, the Company will pay a fee of 0.25% of the loan outstanding at that time. If the facility has not been

terminated by the date falling nine months after 1 June 2014, the Company will pay a fee of 0.25% of the loan

outstanding at that time. In addition, a commitment fee of 1.60% of on any unused available credit is payable, as well as

certain other customary fees.

The facility contains restrictions on the Company’s payment of dividend. Upon drawing, the facility will be secured by a

security package consisting of inter alia a pledge over the entire share capital of Marathon Oil Norway until completion of

acquisition of Marathon Oil Norway as further set out in the facility agreement, a pledge over the Company’s interest in

production licenses in Norway and certain assets to be acquired as part of the Transaction and a pledge over the

insurance policies of the Company.

USD 3.0 billion Senior Secured Reserves-based Lending Facility

The Company has signed a USD 3.0 billion RBL Facility which subject to certain conditions may be expanded to

USD 4.0 billion. The available amount under the RBL Facility will be determined from the value of the Company’s

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borrowing base assets based on certain assumptions. The purpose of the facility is to provide for general corporate

funding, including the financing of the Ivar Aasen and Johan Sverdrup developments and the acquisition of Marathon Oil

Norway. The RBL Facility will be utilised to repay outstanding amounts under the USD 1 billion Revolving Credit Facility

and will replace the Certain Funds Acquisition Bridge Facility as described above. The payable interest is LIBOR plus a

margin of 2.75% p.a., increasing to 3% p.a on the sixth anniversary of the signing date. The utilisation will be 0.25% or

0.5% based on the amount drawn under the facility. The RBL Facility contains certain restrictions on payment of

dividends.

The facility is secured by a security package consisting of inter alia a pledge over the shares in Marathon Oil Norway from

completion of the acquisition of Marathon Oil Norway until its assets are incorporated with the Company, a pledge over

the Company’s interest in development and production licenses in Norway (subject to approval by the MPE) and certain

assets to be acquired as part of the Transaction, pledge over the insurance policies of the Company, a pledge over the

trade receivables and inventory of the Company and pledges over certain bank accounts.

Covenants

There are several covenant requirements related to the Company’s borrowing facilities, including with respect to:

Total committed sources to exceed total uses;

Equity ratio;

Leverage;

Liquidity;

Debt service reserve ratio;

Interest Cover Ratio and

Asset coverage ratio.

The Company was in compliance with relevant covenants both in 2012 and 2013.

Guarantees and Security

The Company has furnished security in connection with the establishment of the debt facilities. The lenders have security

in the Company's tax receivable and in certain licenses. The book value as per 31 December 2013 of licenses furnished as

security is NOK 4,400.3 million (2012: 4,143.6 million and 2011: 1,132.8 million). In addition, lenders have security in

accounts receivables up to a cap of 2.5 billion USD, interest reserve on the credit facility, derivatives (if positive) and

payments to the Company from insurance settlements.

Maturity Overview

The table below shows the payment structure for the Company’s financial liabilities based on undiscounted contractual

payments specified per category as of 31 December 2013 in NOK thousands.

Contract Related Cash Flows (unaudited)

Non-derivative financial

liabilities Book value

Less than 1

year 1-2 years 2-5 years

Over 5

years Sum

Bond issue ..................................... 2,473,582 177,500 177,500 984,975 2,141,101 3,481,076

Exploring facility ............................. 478,050 538,123 — — — 538,123

Revolving facility ............................. 2,036,907 137,590 137,590 2,516,785 — 137,590

Trade creditors and other

liabilities .................................... 1,271,694 1,271,694 — — — 1,271,694

Derivative financial liabilities

Derivatives .................................... 49,453 23,743 18,896 6,745 — 49,384

Total as of 31 December

2013 ........................................... 6,309,686 2,148,650 333,986 3,508,505 2,141,101 5,477,867

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Cash Flows

Cash Flows for the three Months Ended 31 March 2014 (restated) Compared with the three Months Ended 31 March 2013

(in parentheses)

Net cash flow from operating activities was NOK -489 (-267) million for the first quarter of 2014. Net cash flow from

investment activities amounted to NOK -707 (-699) million, mainly caused by investments in fields under development.

Net cash flow from financing activities totalled NOK 308 (548) million for the first quarter of 2014 as the Company had

net withdrawal of debt. The company’s cash and cash equivalents amounted to NOK 821 (736) million as of 31 March.

Tax receivables for disbursement in December 2014 amounted to NOK 1,417 (1,278) million and tax receivable for

disbursement in December 2015 amounted to NOK 148 (261) million as of 31 March 2014.

Cash Flows for the Year Ended 31 December 2013 Compared with the Year Ended 31 December 2012 (in parentheses)

Net cash flow from operating activities amounted to NOK 916 (1,419) million for 2013. This included tax refunds excluding

interest of NOK 1,318 (1,443) million.

Net cash flow from investment activities amounted to NOK -2,805 (-3,575) million for 2013. This mainly relates to

investments in fixed assets of NOK 1,496 (2,875) million and investments in intangible assets of NOK 1,359 (1,114) million.

The net cash flow from financing activities amounted to NOK 2,444 (2,469) million for 2013, mainly caused by

establishment of the new NOK 1.9 billion bond and several withdrawals and repayments on existing and new credit

facilities.

In total, the Company had a cash position and tax refund claim of NOK 3,120 (2,428) million at 31 December 2013.

Cash Flows for the Year Ended 31 December 2012 Compared with the Year Ended 31 December 2011 (in parentheses)

Net cash flow from operating activities amounted to NOK 1,419.0 (1,452.7) million for 2012. This included tax refunds

excluding interest of NOK 1,443.1 (2,323.9) million.

Net cash flow from investment activities amounted to NOK -3,575.2 (-1,718.4) million for 2012. This mainly relates to

investments in fixed assets of NOK 2,874.6 (388.2) million and investments in intangible assets of NOK 1,114.3 (1,440.8)

million. The net cash flow from financing activities amounted to NOK 2,468.8 (318.1) million for 2012. The increase was

largely caused by withdrawals on established loan facilities.

In total, the Company had a cash position and tax refund claim of NOK 2,427.9 (2,239) million at 31 December 2012.

Liquidity Related Ratios

The following ratios are per 31 December 2013:

Liquidity ratio 1: 3,819,011 + 4,806,128 / 1,897,119 = 4.55

((current assets + unused available withdrawal)/current debt)

Liquidity ratio 2: 3,819,011 + 4,806,128 – 40,880 / 1,897,119 = 4.52

((current assets + unused available withdrawal – inventories)/current debt)

Funding and Treasury Policies

The Company has financed its activities with an exploration facility, a revolving credit facility and two bonds, all with

floating interest rates. In addition, the Company has financial instruments such as trade debtors, trade creditors etc.,

directly related to its day-to-day operations. For hedging purposes, the Company has invested in four interest swaps to

swap floating rate to fixed rate.

The Company does not trade in financial instruments, including derivatives. The most important financial risks which the

Company is exposed to relate to oil prices, foreign exchange rates, interest rates and capital requirements.

The Company's risk management, including financial risk management, is designed to ensure identification, analysis and

systematic and cost-efficient handling of risk. Established management procedures provide a good basis for reporting and

monitoring of the Company's risk exposure.

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Working Capital Statement

As of the date of this Prospectus, the Company is of the opinion that the Company's working capital is sufficient for its

present requirements and for at least the next twelve months from the date of this Prospectus.

13.8 Property, Plant and Equipment

The table below shows the Company’s tangible and intangible fixed assets as of 31 March 2014 (restated) in NOK

thousands (unaudited).

NOK thousands Intangible assets Tangible fixed assets

Licenses etc. Software

Exploration

expenses Goodwill

Fields under

development

Production

facilities,

including

wells

Fixtures

and fittings,

office

machinery Total

638,884 4,168 1,555,348 321,120 2,756,883 709,012 70,390 6,055,805

13.9 Investing Activities

This section includes a description of the Company's principal investments made during the periods under review.

2013

In 2013, the Company participated in 14 exploration and appraisal wells. In addition to the discoveries in the Johan

Sverdrup appraisal wells, the Company encountered hydrocarbons at Gohta (oil) in the Barents Sea and the Askja (oil and

gas) prospect adjacent to the Krafla discovery in the North Sea. In 2013, total investments in exploration activities

amounted to NOK 1.7 billion. Total investments in intangible and tangible fixed assets in 2013 were NOK 2,854.7 million.

Except for the 1.7 billion in exploration cost, the main driver for the investments was the development of Ivar Aasen,

which amounted to approximately NOK 1.0 billion in 2013. The Jette fields started producing in May 2013 and the

development cost this year amounted to NOK 122 million. The Company's principal investments are mainly financed by

the two bond loans and the revolving credit facility described in section 13.7. The exploration activities are mainly

financed by the exploration tax refund from the Authorities. The PDO for Jette was submitted in September 2011, and

the development solution was approved by the authorities in February 2012. The main development cost were incurred in

2012 and production commenced in May 2013.

The three first months of 2014

In the first quarter of 2014, the Company participated in two exploration wells, the Trell prospect (PL 102F) and

Langlitinden (PL 659). Both wells discovered hydrocarbons, but the Langlitinden is considered to be non-commercial at

the current stage. Trell is further decribed in Section 6.5. Of the NOK 74 million expense of exploration wells in 1Q 2014,

the main part of the expenses relates to Langlitinden.

Based on current plans, the Company will participate in around 10 exploration wells through 2014. Total investments in

intangible and tangible fixed assets in the first quarter of 2014 were NOK 704.5 million. Except for the mentioned

exploration wells, the main part of the investments was related to the three development projects Ivar Aasen (NOK 355

million), Johan Sverdrup (NOK 95 million) and Gina Krog (NOK 36 million).

The second three months of 2014

The main on-going development project is the Company operated construction of the Ivar Aasen field, as described

above. In 2Q 2014 the Company increased its exposure on Ivar Aasen by receiving interests in PL457 in two different swap

agreements (subject to Authority approval). Pursuant to the unitisation agreement entered into 30 June 2014, the

Company’s interest in the Ivar Aasen unit is 34.7862%. Costs also continue to incur on the pre unitisation work on Johan

Sverdrup, in addition to the development of Gina Krog as mentioned above.

In addition, the Company continues to spend significant amounts on exploration wells. In 2Q 2014 the Company

participated in the drilling of four exploration wells, of which two were dry (PL550 Gotama and PL558 Terne). For PL492

(Gotha) and PL554 (Garantiana), the result of the drillings are not yet concluded upon.

Current Development Projects

Gina Krog, Ivar Aasen and Johan Sverdrup are the Company’s current development projects. All projects are progressing

according to plan. Unitisation negotiations for the Ivar Aasen field and the Johan Sverdrup field are on-going. In addition

to the mentioned development project, there are some minor capitalised investments on the Company's producing fields,

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as well as pipeline investment on the Utsira High. The Company has strong growth ambitions, which will require large

investments.

Gina Krog

The Gina Krog oil and gas field is operated by Statoil Petroleum ASA and is located in blocks 15/5 and 15/6 of PL303,

PL048, PL029B and PL029C in the North Sea. The Company holds a 20% interest in PL029B. Based on its interest in PL029B,

the Company reached an unitisation agreement with the other partners, leaving the Company with a 3.3% interest in the

total field. Gross investments are estimated at NOK 31 billion (nominal) and the field holds gross proven and probable

reserves (P50/2P) of about 225 million boe.

Ivar Aasen

Full field development costs are estimated at NOK 27.4 billion (nominal), of which approximately NOK 19 billion will be

invested prior to production start-up. The Company’s 34.7862% ownership interest represents an investment of about NOK

9.5 billion.

Johan Sverdrup

Statoil Petroleum AS, as the pre-unit operator on the Johan Sverdrup field, announced the key parts of the field concept

selection in February 2014, as Decision Gate 2 (DG2) for the first development phase was passed in the Johan Sverdrup

pre-unit partnership. The concept for future phases will be decided in a separate process after the phase 1 PDO. Gross

investments for the first phase are estimated to be between NOK 100 and 120 billion, including contingencies and

provisions for market adjustments. The Company’s ownership interest in this field will be determined through an

unitisation process and a conclusion is expected in early 2015.

13.10 Off-Balance Sheet Arrangements

As of the date of this Prospectus, the Company is not subject to any off-balance sheet arrangements that have, or are

reasonably likely to have, a current or future material effect on the Company's financial condition.

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14. MAJOR SHAREHOLDERS

The table below shows the Company’s 20 largest shareholders as recorded in the shareholders’ register of the Company

with the VPS as of 8 July 2014, the latest practical date prior to the date of this Prospectus.

No. of

Shares

Owning

interest (%)

Aker Capital AS .............................................................................................. 70,339,610 49.99 %

Folketrygdfondet ............................................................................................ 8,195,409 5.82 %

Odin Norge .................................................................................................... 2,645,420 1.88 %

Verdipapirfondet DNB ....................................................................................... 1,913,953 1,36%

KLP Aksje Norge VPF ........................................................................................ 1,600,000 1,14%

JP Morgan Chase Bank Handelsbanken ................................................................... 1,451,346 1,03%

JP Morgan Clearing C A/C Customer ...................................................................... 1,407,422 1,00%

Varma Mutual Pension Company ........................................................................... 1,375,000 0,98%

Verdipapirfondet DNB ....................................................................................... 1,347,699 0,96%

Fondsfinans SPAR ............................................................................................ 1,300,000 0,92%

VPF Nordea Kapital C/O JP Morgan ....................................................................... 1,288,584 0,92%

VPF Nordea Norge VER C/O JP Morgan ................................................................... 1,118,307 0,79%

Torstein Ingvald Tvenge .................................................................................... 1,100,000 0,78%

Kommunal Landspensjon ................................................................................... 1,100,000 0,78%

Danske Invest Norske C/O Danske ......................................................................... 1,052,949 0,75%

Clearstream Banking ........................................................................................ 992,341 0,71%

The Northern Trust C Non-Treaty ......................................................................... 875,020 0,62%

Statoil Pensjon C/O JP Morgan Chase .................................................................... 757,011 0,54%

Danske Bank 3993 Nordic Settlement ..................................................................... 739,102 0,53%

KLP Aksje Norge Inde ....................................................................................... 690,706 0,49%

Other .......................................................................................................... 39,417,121 28.01%

Total .......................................................................................................... 140,707,000 100.00 %

The following shareholders currently own more than 5% of the issued share capital in the Company as recorded in the

shareholders’ register of the Company with the VPS as of 8 July 2014, the latest practical date prior to the date of this

Prospectus:

No. of

Shares

Owning

interest (%)

Aker Capital AS .............................................................................................. 70,340,000 49.99 %

Folketrygdfondet ............................................................................................ 8,339,000 5.82 %

All the shares in the Company carry the same voting rights.

The Company is not aware of any arrangements, the operation of which may at a date subsequent to the date of this

Prospectus result in a change of control in the Company.

For information regarding the controlling shareholder of the Company, see Section 2.6 “Risks Relating to the Shares”.

119

15. THE BOARD OF DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

This Section provides summary information about the Board of Directors and the executive management of the Company

and disclosures about their employment arrangements with the Company and other relations with the Company,

summary information about the certain other corporate bodies and the governance of the Company, as well as employee

data.

15.1 Overview

The Board of Directors is responsible for the overall management of the Company and may exercise all the powers of the

Company. In accordance with Norwegian law, the Board of Directors is responsible for, among other things, supervising

the general and day-to-day management of the Company's business; ensuring proper organisation, preparing plans and

budgets for its activities; ensuring that the Company's activities, accounts and asset management are subject to adequate

controls and to undertake investigations necessary to ensure compliance with its duties. The Board of Directors may

delegate such matters as it seems fit to the executive management of the Company (the “Senior Management”).

The Company has also established a Corporate Assembly, a corporate body established for some public limited liability

companies. The Corporate Assembly has the power to elect the members of the board of directors and the chair of the

board of directors. Furthermore, the Corporate Assembly has the power to adopt resolutions on matters concerning (1)

investments of substantial magnitude in relation to the resources of the company and (2) rationalisation or restructuring

of operations that will result in a major change in or redeployment of workforce. The articles of association may also

stipulate that the Corporate Assembly’s consent shall be required for certain transactions that do not fall under the

company’s day-to-day management, but this is not the case for the Company.

The Company's Senior Management is responsible for the day-to-day management of the Company's operations in

accordance with instructions set out by the board of directors. Among other responsibilities, the Company's CEO is

responsible for keeping the Company’s accounts in accordance with existing Norwegian legislation and regulations and for

managing the Company's assets in a responsible manner. In addition, at least once a month the Company's CEO must brief

the board of directors about the Company's activities, financial position and operating results.

15.2 Board of Directors and Senior Management

Board of Directors

The Company's Articles of Association provide that the Board of Directors shall have between five and ten members. In

accordance with Norwegian law, the Corporate Assembly is entitled to elect up to one third, and at least two, of the

members of the Board of Directors. In accordance with Norwegian law, the CEO and at least half of the members of the

Board of Directors must either be resident in Norway, or be citizens of and resident in an EU/EEA country.

The Company's Board of Directors currently consists of the following members:

Name Position Served Since Expiry of Term

Sverre Skogen Chairman 17 April 2013 AGM 2015

Anne Marie Cannon Deputy Chair 17 April 2013 AGM 2015

Tom Røtjer Director 19 April 2012 AGM 2016

Kjell Inge Røkke Director 17 April 2013 AGM 2015

Kitty Hall (Katherine J. Martin) Director 17 April 2013 AGM 2015

Jørgen C. Arentz Rostrup Director 17 April 2013 AGM 2015

Gro G. Kielland Director 25 March 2014 AGM 2016

Gudmund Evju Director 25 March 2014 AGM 2016

Kristin Gjertsen Director 25 March 2014 AGM 2016

Inge Sundet Director 13 August 2012 AGM 2015

Terje Solheim Deputy director 25 March 2014 AGM 2015

Tormod Førland Deputy director 25 March 2014 AGM 2016

Camilla Oftebro Deputy director 25 March 2014 AGM 2016

The Company’s registered business address, Munkegata 26, 7011 Trondheim, Norway, serves as c/o address for the

members of the Board of Directors in relation to their directorship of the Company.

The composition of the Company's Board of Directors is in compliance with the independence requirements of the

Norwegian Code of Practice of 23 October 2012 (the “Norwegian Corporate Governance Code”). The Norwegian

Corporate Governance Code provides that a board member is generally considered to be independent when he or she

120

does not have any personal, material business or other contacts that may influence the decisions he or she makes as a

board member.

Set out below are brief biographies of the directors of the Company, along with disclosures about the companies and

partnerships of which each director has been member of the administrative, management and supervisory bodies in the

previous five years, not including directorships and senior management positions in the Company or its subsidiary.

Sverre Skogen, Chairman

Mr Sverre Skogen (born 1956) holds an M.Sc and an MBA from the University of Colorado. Mr Skogen has previously held

several executive positions in the oil and gas industry, including as CEO of Aker Maritime ASA (from 1997 to 2001), of the

amalgamated Aker Kværner O&G (2001 - 2002), of PGS Production (2003 - 2005), and of AGR ASA (2005 - 2013). Mr Skogen

has also held the position as the Company’s CEO (2013-2014).

Mr Skogen has served on several boards in non-executive positions, including Chair of the Board of Intsok from 1999 to

2001 and of Rosenberg Verft from 2003 to 2005.

Current other directorships and management positions ................ Directorships: Petrica Holding (Chairman); Petrica AS

(Chairman); Hemaca AS (Chairman); AGR Energy AS

(Chairman); Hardangervidda Senteret AS (Director); AGR

Cannseal AS (Director); EX-Tech Industrial Group AS

(Chairman); Upstream AS (Director); Tco AS (Director).

Management position(s): -

Previous directorships and management positions held

during the last five years ....................................................

Directorships: AGR Marine Engineering AS (Chairman); AGR

EDS and T&T Holdings AS (Chairman); AGR Subsea AS

(Chairman); BRI Cleanup AS (Chairman); BRI Well Services

(Chairman); AGR Business Partner (Chairman); AGR Central

Asia AS (Chairman); AGR Petroleum Services AS (Chairman);

AGR Consultancy Services AS (Chairman); Teredo AS

(Chairman); AGR Petroleum Services Holdings AS

(Chairman); AGR Drilling Services Holdings AS (Chairman);

SPT Group AS (Director); Oceaneering FO Holdings AS

(Chairman); Oceaneering Asset Integrity AS (Chairman);

Oceaneering Pipetech AS (Chairman); Hemla II AS

(Chairman); AGR DPAL AS (Chairman); Skøyen Invest AS

(Chairman).

Management position(s): AGR ASA (CEO 2005 – 2013).

Anne Marie Cannon, Deputy Chair

Ms Anne Marie Cannon (born 1957) has more than 30 years’ experience in the oil and gas sector in both industry and

investment banking. Since 2000, she has been a Senior Advisor to the Natural Resources Group at Morgan Stanley focusing

on upstream M&A. In her early business career Ms. Cannon held financial and commercial positions at Shell UK E&P and at

Thomson North Sea. In 1995 Ms Cannon joined the Board of Hardy Oil & Gas plc. She graduated with a BSc Honours Degree

from Glasgow University. Ms Cannon is a British citizen.

Current other directorships and management positions ................ Directorships: Premier Oil (Non-executive Director).




Directorships: Aker ASA (Director).

Management position(s): Morgan Stanley (Senior Advisor to

the Natural Resources Group).

Tom Røtjer, Director

Mr Tom Røtjer (born 1953) is Executive Vice President Projects in Norsk Hydro. Mr. Røtjer has held a large variety of

management positions in Hydro since 1980. From 1995 to 1998 he was Project Director for the Njord Field development

on the Norwegian Continental Shelf and was appointed Head of Hydro Technology & Projects. In 2004, Mr. Røtjer was

appointed Project Director for the Ormen Lange and Langeled subsea gas development projects in the Norwegian Sea. He

holds a Master's degree in mechanical engineering from NTNU (1977).

121

Current other directorships and management positions ................ Directorships: Green Energy Group (Chairman); Qatalum

Ltd. (Qatar Aluminium Company), (Director).

Management position(s): SVP Norsk Hydro ASA (Head of

Projects).



Directorships: Qatalum Ltd. (Director); Green Energy Group

(Director); Master Marine AS (Director).

Management position(s): SVP Norsk Hydro ASA, Head of

Projects; EVP Norsk Hydro ASA (Head of Projects).

Kjell Inge Røkke, Director

Mr Kjell Inge Røkke (born 1958) is Aker ASA’s main owner, and has been a driving force in the development of Aker since

the 1990s. Mr Røkke launched his business career with the purchase of a 69-foot trawler in the US in 1982, and gradually

built a leading worldwide fisheries business, harvesting fish and processing it at sea. In 1996, the Røkke-controlled

company RGI purchased enough Aker shares to become Aker’s largest shareholder, and later merged RGI with Aker.

Current other directorships and management positions ................ Directorships: Aker ASA (Chairman); Kværner ASA

(Director); Aker Solutions ASA (Director); Aker Kværner

Holdings AS (Director); Ocean Yield ASA (Director);

Stiftelsen Aker Stadion II (Chairman); Stiftelsen Aker

Stadion I (Chairman); TRG Holding (Chairman); The

Resource Group TRG AS (Chairman); Stiftelsen Molde

Fotball (Chairman); Kværner Concrete Solutions (Deputy

chair); Våningshuset AS (Director); Converto Capital Fund

AS (Director); Oppdal Hotellinvest (Director);

Oppdalstoppen Invest AS (Director); Trygg Pharma Group AS

(Director); Oppdalstoppen 880 AS (Director).




Directorships: Molde Fotball AS (Director); TRG Eco

Harvesting AS (Chairman); Kværner ASA (Chairman); Aker

BioMarine ASA (Chairman).

Management position(s): Aker Stadion Drift DA (Participant)

Kitty Hall (Katherine J. Martin), Director

Ms Kitty Hall (born 1956) has extensive experience from the oil and gas sector. She has headed various technology

companies within the geophysics sector for 25 years and has held several positions on the boards of both listed and

unlisted companies. Ms Hall holds a Bachelor’s degree in geology from the University of Leeds and a Master’s degree in

stratigraphy from Bircbeck College, University of London. She is a British citizen.

Current other directorships and management positions ................ Directorships: Seabird Exploration plc. (Director).




Directorships: ARKeX Ltd (Director); Polarcus Ltd

(Director); Sevan Drilling ASA (Director); Petroleum

Exploration Society of Great Britain (Director); Eastern

Echo (Director); ARK Geophysical Ltd (Director); The

International Association of Geophysical Contractors

(Director).


122

Jørgen C. Arentz Rostrup, Director

Mr Jørgen C. Arentz Rostrup (born 1966) has held the position as CFO in Hydro, where he served as member of the

corporate management until March 2013. He started his career in Hydro, where he headed the energy business area and

the Norwegian production and sale of oil, gas and power. Mr Rostrup has held a number of management positions in

Norway, Singapore and New York. He played a key role in the merger between Saga Petroleum and Hydro and was a

member of the corporate management board until Hydros' merger with Statoil.

Current other directorships and management positions ................ Directorships: Citus AS (Director); ABG Sundal Collier

Holding ASA (Director); Roccasio AS (Director).

Management position(s): Yara Ghana Ltd (Managing

Director); Roccasio AS (Managing Director).



Directorships: Hydro Energi ASA (Chairman); Christian

Michelsen Research AS (Chairman); Hycore ANS (Chairman);

Panoro Energy ASA (Director); Argentum

Fondsinvesteringer AS (Director).

Management position(s): Hydro (CFO).

Gro Kielland, Director

Ms Gro Kielland (born 1959) has a Master of Science degree as engineer from the Norwegian University of Science and

Technology (NTNU). Kielland has had a number of leading positions in the oil and gas industry both in Norway and abroad,

among others as CEO of BP Norway. Kielland is a Norwegian citizen.

Current other directorships and management positions ................ Directorships: Mindup AS (Chairman); Minox Technology AS

(Chairman); S3 ID AS (Chairman); Hagrola Consulting AS

(Chairman); BP Fuels and Lubricants AS (Chairman); Flux

Group AS (Chairman); Asco Norge (Chairman); Agility Group

AS (Chairman); Ulstein Group AS (Director); Ulstein

Shipping AS (Director); Falck Nutec (Director); Montagu

Executive Search (Director); Stavanger Symfoniorkester

Stiftelse (Director).

Management position(s): Hagrola Consulting (Managing

Director).



Directorships: Exprosoft (Director); Asco Arctic Base

(Chairman); Asco Freight Management Norge AS

(Chairman); Flux Holding AS (Chairman); MRC Global

Norway AS (Chairman); International School of Stavanger

(Director); Screencancer AS (Director); Plasmacute AS

(Director); Novel Diagnostics (Chairman); I-Sea AS

(Director); Tristein AS (Chairman); Align Invest AS

(Director); Agility Group AS (Director); Stream Invest AS

(Director); Industri Energi Holding AS (Chairman); Torp LNG

AS (Director); Bilfinger Industrier Norge AS (Chairman);

MRC Global Norway AS (Director); Risavika Havne-service

AS (Chairman); Asco Sørbase AS (Chairman); Sandnessjøen

Havneservice AS (Chairman); BP Norge AS (Chairman); Asco

Norge AS (Director); Screencancer AS (Chairman); Dovre

Group AS (Director); Advanced Control – ID AS (Chairman);

BP Fuels and Lubricants AS (Director); BP Norge AS

(Director).

Management position(s): BP Norge AS (Managing Director).

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Gudmund Evju, Director

Mr Gudmund Evju (born 1972) is Head of Development Technology in the Company. He has been with the Company since

2004, with several positions in the department. From 2011-2013 he was Project Manager for the Jette Development. Evju

holds a Master of Science in Mechanical Eng. from NTNU (1996). Before he joined the Company he was in PGS Production

(1998-2004), primarily followed up the process plant on the FPSO vessel Petrojarl Varg. In the period from 1996-1998 he

was employed at NTNU and in addition he worked on different projects at SINTEF.

Current other directorships and management positions ................ Directorships: -




Directorships: -


Kristin Gjertsen, Director

Ms Kristin Gjertsen (born 1969) is Head of Partner Operated Licenses in the Company where she has been since 2010. She

has more than 15 years’ experience from various management positions in the oil and gas industry. Gjertsen has held

various positions in StatoilHydro ASA (incl. Hydro ASA and Saga Petroleum ASA) from 1998 to 2008, and from 2008 to 2010

she held the position as Director Business Development & Online Business Group in Microsoft Norge.

Ms Gjertsen holds a M. Sc. from NTNU (1992) and a MBA from NHH (2004). She is also member of the Board of Western

Bulk ASA.

Current other directorships and management positions ................ Directorships: Western Bulk ASA (Director).




Directorships: Viking Drilling ASA (Director); Microsoft

Norge ASA (Director Business Development & Online

Business Group).


Inge Sundet, Director

Mr Inge Sundet (born 1963) is Chief Drilling Engineer in the Company. He has been with the Company since 2008, with

several positions in the drilling department, and is now drilling manager for Ivar Aasen.

Sundet holds a Master of Science in Mechanical Eng. from NTNU (1988). Before he joined the Company he was in Statoil

(2001-2008), primarily working with well completions (Heidrun and Kristin). He has worked offshore as Drilling Supervisor.

From 1989-2001 he was employed at SINTEF as Senior Researcher within Safety and Reliability.

Current other directorships and management positions ................ Directorships: —

Management position(s): —



Directorships: —

Management position(s): —

Corporate Assembly

Pursuant to the Norwegian Public Limited Liability Companies Act, two-thirds of the members of the Corporate Assembly

and deputy members shall be elected by the general meeting by simple majority. One-third of the members of the

Corporate Assembly and deputy members are elected by and from among the employees. A majority of the employees or

trade unions representing two-thirds of the employees may, in addition, decide that observers and deputy members are

to be elected. The number of observers may be up to half the number of employee members of the Corporate Assembly.

Pursuant to the Company's Articles of Association, the Corporate Assembly shall have twelve members and up to eight

deputy members. Eight members and up two four deputy members shall be elected by the General Meeting. Four

members and the four corresponding deputy members shall be elected by and among the employees. The chairman and

the vice-chairman of the Corporate Assembly are elected by the Corporate Assembly.

124

The Company's Corporate Assembly currently consists of the following members:

Name Position Served Since Expiry of Term

Øyvind Eriksen Chairman 17 April 2013 AGM 2015

Anne Grete Eidsvig Member 17 April 2013 AGM 2015

Odd Reitan Member 17 April 2013 AGM 2015

Finn Berg Jacobsen Member 17 April 2013 AGM 2015

Leif O. Høegh Member 17 April 2013 AGM 2015

Olav Revhaug Member 17 April 2013 AGM 2015

Jens Johan Hjort Member 17 April 2013 AGM 2015

Nils Bastiansen Member 17 April 2013 AGM 2015

Ifor Roberts(1) Member 17 April 2013 AGM 2015

Hugo Breivik(1) Member 17 April 2013 AGM 2015

Kjell Martin Edin(1) Member 17 April 2013 AGM 2015

Hanne Gilje(1) Member 17 April 2013 AGM 2015

__________________

(1) Elected by and among the employees

Set out below are brief biographies of the members of the Corporate Assembly, along with disclosures about the

companies and partnerships of which each member of the Corporate Assembly has been member of the administrative,

management and supervisory bodies in the previous five years, not including directorships and senior management

positions in the Company or its subsidiary. As of the date of this Prospectus, none of the members of the Corporate

Assembly hold any securities in the Company.

Øyvind Eriksen, Chairman

Mr Øyvind Eriksen (born 1964) is the CEO of Aker ASA, a position he has held since January 2009. Mr. Eriksen holds a law

degree from the University of Oslo. He joined the Norwegian law firm BA-HR in 1990, where he became a partner in 1996

and a director/chairman from 2003. At BA-HR, Mr Eriksen worked closely with Aker and Aker’s main shareholder, Kjell

Inge Røkke.

Mr Eriksen is executive Chairman of Aker Solutions ASA and Aker Kværner Holding AS, and a director of several

companies, including The Resource Group TRG AS, TRG Holding AS and Reitangruppen AS.

Current other directorships and management positions ................ Directorships: Converto Capital Fund AS (Chairman); Aker

Kværner Holding AS (Chairman); Aker Achievements AS

(Chairman); Erøy AS (Chairman); Aker Solutions ASA

(Chairman); The Resource Group TRG AS (Director); Oz

Holdco AS (Director); Flette AS (Director); Oz Midco AS

(Director); Qinterra AS (Director); Oz Topco (Director);

Reitangruppen AS (Director); Gluteus Medius (Director).

Management position(s): Aker ASA (CEO).



Directorships: Havfisk ASA (Director); Converto AS

(Director); Aker Clean Carbon (Director); Aker Capital

(Chairman); Transocean Norway Drilling AS (Director);

Ocean Harvest AS (Chairman); Flette AS (Chairman); Stokke

AS (Director); Volvo Car Norway AS (Director); Rema Finans

AS (Director); Volvo Norge AS (Chairman); GKN Aerospace

Norway AS (Director); Reitan Kapital AS (Director); Thor

Dahl Management AS (Deputy Director); Thor Dahl Shipping

AS (Director); Advokatfirmaet BA-HR DA (Chairman).

Management position(s): Advokatfirmaet BA-HR DA

(Partner).

125

Anne Grete Eidsvig, Member

Ms Anne Grete Eidsvig (born 1966) graduated from the Norwegian Police Academy in 1988. From 1988-2003 she held

various positions in the police force in Oslo and elsewhere, among them one year in OSCE (Organization for Security and

Co-operation in Europe) in Croatia/Vukovar. Ms Eidsvig is a shareholder and a director in The Resource Group TRG AS,

which own approximately 67 per cent of Aker ASA. She is a Norwegian citizen.

Current other directorships and management positions ................ Directorships: The Resource Group TRG AS (Director); The

Resource Group TRG AS (Director); TRG Holding AS

(Director); Aker Achievements AS (Director).

Management position(s):-



Directorships: -


Odd Reitan, Member

Mr Odd Reitan (born 1951) is CEO and chairman of the board of Reitangruppen AS. He has been a merchant all his life and

he got his formal education at Norges Kjøpmannsinstitutt, now Norges Varehandelshøyskole (Commodity Trade

Management). After graduating he opened his first store in 1972. Mr Reitan is a Norwegian citizen.

Current other directorships and management positions ................ Directorships: Reitan Handel AS (Chairman); Reitangruppen

AS (Chairman); Reitan Eiendom AS (Chairman); Reitan

Convenience AS (Chairman); Reitan Kapital AS (Chairman);

Rema 1000 AS (Chairman); Odd Reitan Private Holding AS

(Chairman); Rely AS (Chairman); UNO-X Gruppen AS

(Chairman); Nordenfjeldske Invest AS (Chairman); Major 2

AS (Chairman); Reitangruppen AS (Chairman); Vågsplassen

Eiendom AS (Director); Vågentorget AS (Director); Vågsalm.

6 AS (Director); Norvo AS (Director); Vetridsallmenning 5 AS

(Director); Næringsforeningen i Trondheimsregionen Mid

Norway Chamber of Commerce and Industry (Director);

E. C. Dahls Eiendom AS (Director); Norges Franchise

Forening (Director); Axfood AB (Sweden) (Director).

Management position(s): Odd Reitan (Owner).



Directorships: Rema Industrier AS (Director); Reitangruppen

Holding AS (Chairman); Vestenfjeldske Eiendom AS

(Director); Reitangruppen AS (Chairman); Travelnet Norway

AS (Director); Effect Norge AS (Director); UNO-X Gruppen

Holding AS (Chairman); Nordenfjeldske Invest AS (Director);

Nordenfjeldske Luftfart AS (Director); Nordenfjeldske

Offshore AS (Director); Nordenfjeldske Shipping AS

(Director); Major 2 AS (Director); Reitan Venture 1 AS

(Chairman).

Management position(s): Reitangruppen AS (CEO)

Finn Berg Jacobsen, Member

Mr Finn Berg Jacobsen (born 1940) holds an MBA degree from Harvard Business School and is a state authorised auditor.

He has held various positions with Arthur Andersen & Co, and worked as Regional Managing Partner from 1983–1999. From

2001–2005, Mr. Berg Jacobsen worked as CFO and Chief of Staff at Aker Kvaerner. He is currently working as a consultant

within corporate governance and corporate finance. He is director and chairman of the audit committee in several

companies. Mr. Berg Jacobsen has served on the board, supervisory committees and task forces of several associations

and organisations. He has been awarded the Royal Order of St. Olav for his contributions to the advancement of auditing

and accounting.

126

Current other directorships and management positions ................ Directorships: FBJ-Consulting AS (Chairman); Arctic

Securities AS (Chairman); Aker ASA (vice-chairman);

Hvamveien 4 ANS (Director); Strømsveien 80 ANS

(Director); Oslo Asset Management ASA (Director);

Industriveien 6 ANS (Director); Sameiet Gabels gate 11

(Director).

Management position(s): Finn Berg Jacobsen (Owner).



Directorships: Entra Eiendom AS (Director); Aker ASA

(Director); Eneas Holding AS (Director); Resid Invest AS

(Director); Eneas Energy AS (Director).


Leif O. Høegh, Member

Mr Leif O. Høegh (born 1963) holds a master’s degree in economics from the University of Cambridge and an MBA from

Harvard Business School. Mr Høegh has previously worked for McKinsey & Company and the Royal Bank of Canada Group.

Current other directorships and management positions ................ Directorships: Leif Höegh & Co AS (Chairman); Leif Höegh &

Co Holdings AS (Chairman); Höegh Autoliners Holdings AS

(Chairman); Höegh Autoliners Management AS (Chairman);

Höegh LNG Holdings Ltd (Deputy Chairman); Höegh LNG AS

(Director); Höegh Capital Partners Ltd (Director); Höegh

Capital Partners Services AS (Director); Höegh Eiendom AS

(Director); Höegh Eiendomsselskap AS (Director); Höegh

Eiendom Holding AS (Director); Industriens og Eksportens

Hus AS (Director); Indekshuset Holding AS (Director); Rift

Valley Holdings (Director); Gadus SE (Chairman); Dita Spar

AS (Chairman); Gadus LNG AS (Chairman); Gadus Eiendom

ANS (Chairman); Luta Spar AS (Chairman); Gadus Industri SE

(Chairman); Kata Spar AS (Chairman); Gadus Eiendom AS

(Chairman); Nita Spar AS (Chairman); Gadus Shipping AS

(Chairman); Höegh Pensjonskasse (Chairman); Fritas AS

(Chairman); NRTO AS (Chairman); Alpaca Holding AS

(Director); Tangen Reserve AS (Chairman); AS Fansea

(Director); Flette AS (Chairman); Aker ASA (Director).




DNB (Supervisory Board); Hector Rail AB (Director);

Industriens og Eksportens Hus AS (Director); Norwegian Hull

Club - Gjensidig Assuranseforening (Director); Höegh

Capital Partners Services AS (Chairman); Nita Spar AS

(Director); Dita Spar AS (Director); Kata Spar AS (Director);

Luta Spar AS (Director); Aequitas AS (Director); Gadus AS

(Chairman); Lohba Holding AS (Chairman); Flette AS

(Director).


Olav Revhaug, Member

Mr Olav Revhaug (born 1950), has been managing director in the The Resource Group (TRG) AS since 1997. Mr Revhaug is a

business graduate from Norwegian School of Management. From 1967 – Mr Revhaug held various positions in Bergerkrysset

Auto, and he was with Gresvig AS from 1982 – 1993, at the end of the period as CFO. From 1993 – 1994 Mr Revhaug was

CFO in Brooks Sports, USA, and from 1994 – 1997 he was CFO in Resource Group International, Inc. in USA. He has also

held various temporary EVP positions in Aker RGI AS, Kværner ASA and Aker ASA during the period 2004—2009. Mr Revhaug

is a Norwegian citizen.

127

Current other directorships and management positions ................ Directorships: Orkelhø AS (Chairman); Våningshuset AS

(Chairman); Storhø AS (Chairman); Sissihø AS (Chairman);

Laffen Holding AS (Chairman); The Resource Group TRG AS

(Director); TRG Holding AS (Director).

Management position(s): The Resource Group TRG

(Managing Director); Laffen Holding AS (Managing Director);

Nopel Yachting, INC. (Managing Director).



Directorships: TRG Eco Harvesting AS (Director); Aker

Encore AS (Director); Aker Clean Carbon AS (Director);

Startfase 375 AS (Chairman); Startfase 374 AS (Chairman);

Vora AS (Chairman); Aker Encore AS (Chairman); Blåøret AS

(Chairman); Kvennhuset AS (Chairman); Masstu AS

(Chairman); Fjellvollen AS (Chairman); Aker Pensjonskasse

(Chairman); Aker Invest II KS (Chairman); Oslo Asset

Management Holding AS (Chairman); CS Krabbe AS

(Chairman); Aker BioMarine AS (Chairman); Aker Ship Lease

1 (Chairman); Aker Geo Seismic AS (Chairman); Transocean

Norway Drilling AS (Director); Hanøytangen Invest AS

(Chairman); Ocean Yield ASA (Chairman); Aker Maritime

Finance AS (Chairman); Recondo AS (Chairman); Aker

Mekaniske Verksted AS (Chairman); Aker Capital AS

(Director); Aker AS (Chairman); Navigator Marine AS

(Chairman); Aker Holding Start 2 AS (Chairman); Norway

Seafoods Holding AS (Chairman); Resource Group

International AS (Chairman); K3 Komplementar Tomt AS

(Chairman); Sea Launch Holding AS (Chairman); Aker Invest

AS (Chairman); Old Kværner Invest AS (Chairman); A-S

Norway AS (Chairman); Aker Energy International AS

(Director); Aker Ship Lease 2 AS (Chairman); Aker Ship

Lease AS (Chairman); Converto AS (Chairman); Converto

Capital Fund AS (Director); Oslo Asset Management ASA

(Chairman); Startfase Holding AS (Chairman); Atlas-Stord

AS (Chairman); Lysaker Polaris I AS (Chairman); Næraberg

Holding AS (Director); CS Krabbe AS (Director).

Management position(s): TRG ECO Harvesting AS (CEO);

Aker Kværner Holding AS (CEO); Resource Group

International AS (CEO).

Jens Johan Hjort, Member

Mr Jens Johan Hjort (born 1964) has been the Major of Tromsø from 2011. After graduating from the University of Oslo

with a Law degree, he has gained experience from a variety of fields. He has worked in the Ministry of Finance and the

Ministry of the Environment and later as a Lawyer in Advokatene Rekve, Pleym & Co from 1996-2011. He was also the

Swedish consul in Tromsø from 1998-2011. Mr Hjort is a Norwegian citizen.

Current other directorships and management positions ................ Directorships: Ordfører Kolsum og Hustrus Fond (Chairman);

Hjort Holding AS (Director).

Management position(s): Hjort Holding AS (CEO); Advokat

Jens Johan Hjort (Owner).



Directorships: Holmbo AS (Director); Kjell Arnesen AS

(Director); Tromsø IL (Chairman).

Management position(s): Advokatene Rekve, Pleym & Co

(Lawyer); Swedish consul in Tromsø.

128

Nils H. Bastiansen, Member

Mr Nils H. Bastiansen (born 1960) has worked for Folketrygdfondet since 1995. He has previously worked as a stock broker

in Inibank Securities in Copenhagen and in DNB Fonds in Oslo. Mr Bastiansen is educated in commerce management from

Handelsakademiet in Oslo and holds an M.Sc. in Business Administration and a Master of International Management from

the American Graduate School and International Management, Arizona. He is also a chartered financial analyst. Mr

Bastiansen is a Norwegian citizen.

Current other directorships and management positions ................ Directorships: Folketrygdfondet (Executive Director

Equities); Norsk Hydro (Corporate Assembly Member).




Directorships: DNB ASA (Corporate Assembly Member);

DNB Bank (Corporate Assembly Member); DNB Livsforsikring

(Corporate Assembly Member); DNB Skadeforsikring

(Corporate Assembly Member); DNB Boligkredtt (Corporate

Assembly Member); DNB Næringskreditt (Corporate

Assembly Member).


Senior Management

The Company's senior management comprise of the CEO and six executives.

Name Position Employed From

Karl Johnny Hersvik CEO 4 October 2013

Øyvind Bratsberg Chief Operating Officer 11 February 2008

Alexander Krane CFO 20 June 2012

Odd Ragnar Heum Senior VP Asset Johan Sverdrup 7 December 2007

Anita Utseth Chief of Staff 19 November 2007

Bård Atle Hovd Senior VP Projects 7 May 2011

Gro G. Haatvedt Senior VP Exploration 1 June 2014

Set out below are brief biographies of the members of the Senior Management, along with disclosures about the

companies and partnerships of which each member of the Senior Management has been member of the administrative,

management and supervisory bodies in the previous five years, not including directorships and executive management

positions in the Company or its subsidiaries.

Karl Johnny Hersvik, CEO

Mr Karl Johnny Hersvik holds a Cand Scient degree in Industrial Mathematics from UiB. Prior to joining Statoil in 1998 he

was a co-founder of several IT start-ups. Since 1998 he has held many professional and management positions in Norsk

Hydro and StatoilHydro, most recent as Senior Vice President Research, Development and Innovation.

Mr Hersvik holds several board positions including chairman of the OG21. He is also a member of several industry

academia collaboration boards.

Current other directorships and management positions ................ Directorships: Epsis AS (Director) (Leaving the board in

June); Energy Ventures (Advisory Director) (Leaving the

board in June); Den Norske Kirke i Utlandet

(Sjømannskirken) (Director).




Directorships: Statoil Technology Middles East (Chairman);

Statoil Technology China (Chairman).


129

Øyvind Bratsberg, Chief Operating Officer

Mr Bratsberg has 24 years of experience from the industry within marketing, business development, and operation. His

core competence commercial negotiations and management, and has comprehensive experience from offshore operations

and project development. Before joining the Company, Bratsberg was employed in Statoil where he was responsible for

the Company’s early-phase field development.

Mr Bratsberg currently holds no other directorships and management positions.





Directorships: -


Alexander Krane, CFO

Mr Alexander Krane has a Master of Science in Business and Economics from Bodø Graduate School of Business and an MBA

from the Norwegian School of Economics. Krane is also a State Authorised Public Accountant.

Krane most recently served as the Corporate Controller of Aker ASA. He has previously worked with Norse Energy Corp.

ASA and KPMG, both in Norway and in the US.





Directorships: When employed in Aker ASA (2010-2012), Mr.

Krane held several directorships in wholly owned

subsidiaries of the Aker ASA group (most of them smaller

companies) including Aker Capital AS, Aker Seafoods

Holding AS and Resource Group International Inc.


Odd Ragnar Heum, Senior VP Asset Johan Sverdrup

Mr Heum holds a M.Sc. Degree in Petroleum Geosciences from the Norwegian University of Science and Technology in

Trondheim.

Heum has more than 30 years of experience from the Norwegian (and international) oil business, primarily within

exploration and business development. Before joining the Company, Mr. Heum was employed in Statoilhydro.





Directorships: -


Anita Utseth, Chief of Staff

Ms Utseth holds a M.Sc. degree in Mechanical Engineering from the Norwegian University of Science and Technology

(NTNU), and an MA in Energy Economics and Environmental Management (1998) from Scuola Superiore di Enrico Mattei.

Previous work experience includes State Secretary in the Ministry of Petroleum and Energy, several positions with Pertra,

The Directorate for Nature Management, and the Norwegian Petroleum Directorate (NPD).

Ms Utseth currently holds several board positions (Hjortefot AS, Filminvest Midt-Norge AS, St Olavs Hospital Hf, Trondheim

Renholdsverk AS, Retura Trondheim Renholdsverk AS, Sandvika Fjellstue AS and Ila Frivilligsentral AS). Ulseth held the

position as a director in the Company’s Board of Directors from 2008 to 2013.

130

Current other directorships and management positions ................ Directorships: Midtnorsk Filminvest AS (Chairman)

Midtnorsk Filmsenter AS (Chairman); Trondheim

Renholdsverk AS (Director); Retura AS (Director); Sandvika

Fjellstue AS (Director); Hjortefot AS (Chairman and owner),

Sør-Trøndelag Senterparti (Director); Næringsforeningen i

Trondheimsregionen (Director).




Directorships: St Olavs Hospital HF (Director).


Bård Atle Hovd, Senior VP Projects

Mr Bård Atle Hovd joined the Company in August 2011. Mr Hovd is a graduate engineer from NTNU (NTH) and holds an MBA

from NHH. He has 24 years of experience in operations, project development and project implementation from

ConocoPhillips, where he was employed from 1987 to 2011.

Before Mr. Hovd came to the Company, he was in charge of the project development and the PDO for the Eldfisk II

re-development in ConocoPhillips.





Directorships: -

Management position(s): Manager Eldfisk II Development

ConocoPhillips Norway 2008-2011.

Gro G. Haatvedt, Senior VP Exploration

Ms Gro G. Haatvedt was appointed senior vice president for exploration in June 2014. She graduated as geophysicist from

the University of Oslo in 1984 and started her career in Hydro in 1984 and continued in Statoil after the two companies

merged. She has held many professional and management positions in Statoil, among them on Oseberg and as Sr.

VP Exploration for the North Sea. She has also been responsible for business development in Iran and country manager in

Libya.

Ms Haatvedt has most recently served as senior vice president for exploration on the NCS in Statoil. During this period,

she has made several significant discoveries, including Johan Sverdrup which is one of the biggest oil discoveries in

Norwegian history.

Ms Haatvedt currently holds a position as member of the board of directors in the Department of Geosciences at the

Faculty of Mathematics and Natural Sciences, University of Oslo.

Current other directorships and management positions ................ Directorships: Mindup AS (Chairman); Minox Technology AS

(Chairman); S3 ID AS (Chairman); Hagrola Consulting AS

(Chairman); BP Fuels and Lubricants AS (Chairman); Flux

Group AS (Chairman); Asco Norge (Chairman); Agility Group

AS (Chairman); Ulstein Group AS (Director); Ulstein

Shipping AS (Director); Falck Nutec (Director); Montagu

Executive Search (Director); Stavanger Symfoniorkester

Stiftelse (Director).

Management position(s): Hagrola Consulting (Managing

Director).



Directorships: Exprosoft (Director); Asco Arctic Base

(Chairman); Asco Freight Management Norge AS

(Chairman); Flux Holding AS (Chairman); MRC Global

Norway AS (Chairman); International School of Stavanger

(Director); Screencancer AS (Director); Plasmacute AS

(Director); Novel Diagnostics (Chairman); I-Sea AS

(Director); Tristein AS (Chairman); Align Invest AS

131

(Director); Agility Group AS (Director); Stream Invest AS

(Director); Industri Energi Holding AS (Chairman); Torp LNG

AS (Director); Bilfinger Industrier Norge AS (Chairman);

MRC Global Norway AS (Director); Risavika Havne-service

AS (Chairman); Asco Sørbase AS (Chairman); Sandenessjøen

Havneservice AS (Chairman); BP Norge AS (Chairman); Asco

Norge AS (Director); Screencancer AS (Chairman); Dovre

Group AS (Director); Advanced Control – ID AS (Chairman);

BP Fuels and Lubricants AS (Director); BP Norge AS

(Director).

Management position(s): BP Norge AS (Managing Director).

15.3 Remuneration and Benefits

The compensation for the members of the Board of Directors for their service as directors is determined on an annual

basis by the Shareholders of the Company at the annual general meetings of shareholders.

Remuneration and Benefits

The table below sets out a summary of the remuneration paid to the members of the Board of Directors for the year

ended 31 December 2013.

NOK Year Ended

31 December 2013

Sverre Skogen .................................................................................................... 387,000

Anne Marie Cannon .............................................................................................. 333,000

Tom Røtjer ....................................................................................................... 351,000

Kjell Inge Røkke ................................................................................................. 279,000

Kitty Hall ......................................................................................................... 205,000

Jørgen C. Arentz Rostrup ....................................................................................... 293,000

Gro G. Kielland .................................................................................................. —

Gudmund Evju ................................................................................................... —

Kristin Gjertsen .................................................................................................. 48,000

Inge Sundet ....................................................................................................... 160,000

Terje Solheim .................................................................................................... —

Tormod Førland .................................................................................................. —

Camilla Oftebro .................................................................................................. —

The Board of Directors has established a guideline for salaries and other remuneration to the CEO and other senior

executives valid until the annual general meeting in 2015. The guideline was endorsed by the annual general meeting in

April 2014.

The members of the Senior Management receive a basic salary, adjusted annually. The Company's Senior Management

participates in the general arrangements applicable to all the Company's employees, including the bonus program, the

share saving program, defined benefit pension plans and other payments in kind such as free newspaper, free internet

connection at home and subsidised fitness centre fees.

In special cases, the Company may offer other benefits in order to recruit personnel, including compensation for bonus

rights earned in previous employment. The Company does not offer share option schemes to employees.

Adjustment of the CEO's base salary is decided by the Board of Directors. Adjustment of the base salaries for other senior

executives is decided by the CEO within the wage settlement framework adopted by the board.

132

The table below sets out a summary of the remuneration paid to the members of the Senior Management of the Company

for the year ended 31 December 2013.

Thousand Year Ended 31 December 2013

Salary

Share-

investment

Bonus4 Other benefit

Accrued

pension costs Other

Total

remuneration

Number of

Shares

Ownership

Interest (%)

Erik Haugane(1) ................................................................................................... 3,242 1,345 79 942 347 5,955 360 0.26%

Karl Johnny Hersvik(2) ........................................................................................... — — — — — — — —

Øyvind Bratsberg ................................................................................................ 3,369 1,311 21 234 — 4,934 44 0.03%

Alexander Krane ................................................................................................. 2,083 235 30 229 — 2,576 2 0.00%

Bjørn Martinsen(3) ................................................................................................ 1,741 565 25 239 232 2,801 15 0.01%

Odd Ragnar Heum ............................................................................................... 2,070 577 27 219 — 2,893 59 0.04%

Anita Ulseth ...................................................................................................... 1,840 477 18 297 — 2,631 46 0.03%

Bård Atle Hovd ................................................................................................... 2,754 782 28 257 — 3,821 7 0.01%

Gro G. Haatvedt ................................................................................................. — — — — — — — —

Total .............................................................................................................. 17,099 5,293 227 1,716 578 25,612 534 0.38%

__________

1) Former CEO. Resigned 31 July 2013. As compensation the Company pays 70% of wages from the age of 60 to 67.

The liability is calculated using the same actuarial assumptions as the Company’s other pension obligations. At

the time he resigned he owned 565 032 shares in the Company.

2) Current CEO. No salary was paid for 2013 as he was employed in 2014.

3) Resigned 15 October 2013.

4) Origins from share savings investment scheme earned in 2013, disbursed in 2013.

The annual remuneration to the chairman and the members of the Corporate Assembly is NOK 82,000 and NOK 62,000

respectively.

The chairman of the Nomination Committee receives an annual remuneration of NOK 33,000 while the annual

remuneration to the other members amounts to NOK 16,500. In addition, the members of the Nomination Committee

receive a fee of NOK 3 000 per attended meeting.

Bonus Program

The Company has established bonus programs for both senior executives and other employees with bonus up to 20% of the

paid base salary for each employee. The Board of Directors makes the decision on the bonus payments, based on the

previous year’s performance. For 2013, the bonus was set to 15% of the relevant employee’s base salary. The bonuses

were disbursed in February 2014.

Share Saving Program

The Company has established a share saving program that applies to both senior executives and other employees,

pursuant to which each employee is granted 20% of the respective employee’s basic salary from the previous year. The

employees receive an annual payment of 10% of the previous year’s gross salary. The employee is obligated to buy shares

in the Company for the net amount received (50% of the amount is deducted for tax purposes). A one year lock-up period

applies to the shares. If the employee wishes to save in other securities, it will receive a cash payment equivalent to 50%

of the amount set out above.

Pension

The Company has a defined benefit plan which covers 224 persons. The net liability as of 31 December 2013 amounted to

NOK 66.5 million.

133

Shares and Options held by Members of the Board of Directors, Corporate Assembly and Senior Management

The table below sets forth the number of Shares beneficially owned by each of the Company’s members of the Board of

Directors, Corporate Assembly and Senior Management as of the day of this Prospectus. None of the members of these

corporate bodies hold any options.

Loans and Guarantees

In order to recruit new employees to the Company and match corresponding schemes offered by competing companies, a

borrowing facility has been established for the Company's employees, whereby all permanent employees can borrow up to

30% of their gross annual salary (including the share saving program, but excluding any cash bonus) at an interest rate

corresponding to the taxable norm interest rate. The lender is a selected bank, and the Company guarantees for the

employees' loans. The Company covers the difference between the market interest rate and the prescribed interest rate

for tax purposes at any time. The lender is a savings bank. Guarantees furnished by the company for employees totalled

NOK 32.9 million at 31 December 2013. The corresponding amount for 2012 was NOK 19 million. As security for such

loans, the Company signs additional contracts with the employees, entitling it to make deductions for defaulting payment

from holiday pay and pay during notice periods. The bank manages the facility, collects interest payments/instalments

and follows up any default. The Company pays a small annual fee for this work.

The Company has not provided any other guarantees, or granted any loans or made any other similar commitments to any

member of the Board of Directors, Corporate Assembly or the Senior Management.

Position Shares

Board of Directors

Sverre Skogen ................................................................................................ Chairman —

Anne Marie Cannon .......................................................................................... Deputy Chair 3,000

Tom Røtjer ................................................................................................... Director —

Kjell Inge Røkke(1) ........................................................................................... Director —

Kitty Hall ..................................................................................................... Director —

Jørgen C. Arentz Rostrup(2) ................................................................................ Director 3,000

Gro G. Kielland .............................................................................................. Director —

Gudmund Evju ............................................................................................... Director 68,395

Kristin Gjertsen .............................................................................................. Director 6,177

Inge Sundet ................................................................................................... Director 10,365

Terje Solheim ................................................................................................ Deputy Director 832

Tormod Førland .............................................................................................. Deputy Director 24,965

Camilla Oftebro .............................................................................................. Deputy Director 4,232

Corporate Assembly

Øyvind Eriksen ............................................................................................... Chairman —

Anne Grete Eidsvig .......................................................................................... Member —

Odd Reitan ................................................................................................... Member —

Finn Berg Jacobsen .......................................................................................... Member —

Leif O. Høegh ................................................................................................ Member —

Olav Revhaug ................................................................................................. Member —

Jens Johan Hjort............................................................................................. Member —

Nils Bastiansen ............................................................................................... Member —

Ifor Roberts ................................................................................................... Member 7,887

Hugo Breivik .................................................................................................. Member 41,324

Kjell Martin Edin ............................................................................................. Member 1,870

Hanne Gilje ................................................................................................... Member 21,273

Senior Management

Karl Johnny Hersvik ......................................................................................... CEO —

Øyvind Bratsberg ............................................................................................ COO 49,105

Alexander Krane ............................................................................................. CFO 4,812

Odd Ragnar Heum ........................................................................................... Senior VP Asset Johan Sverdrup 61,541

Anita Utseth .................................................................................................. Chief of Staff 47,545

Bård Atle Hovd ............................................................................................... Senior VP Projects 11,318

Gro G. Haatvedt ............................................................................................. Senior VP Exploration —

__________

(1) The Company’s largest shareholder, Aker Capital AS, is controlled by Aker ASA which in turn is controlled by Kjell Inge

Røkke and his family through TRG Holding AS and The Resource Group AS. (2) Through Roccasio AS (wholly owned)

134

15.4 Disclosure of Conflicts of Interests

To the Company's knowledge, there are currently no actual or potential conflicts of interest between the Company and

members of the Board of Directors or Senior Management, including any family relationships between such persons as of

the date of this Prospectus. The largest shareholder of the Company, Aker Capital AS, is controlled by Aker ASA (100%)

which in turn is controlled by Kjell Inge Røkke and his family through TRG Holding AS and The Resource Group AS.

15.5 Disclosure About Convictions in Relation to Fraudulent Offences

Kristin Gjertsen, Director, was a member of the Board of Directors in Viking Drilling ASA when it applied for Chapter 11

Plan of Liquidation under the U.S. Bankruptcy Code with the U.S Bankruptcy Court in Houston, Texas in November 2009,

after being more than 20 months under Chapter 11 Bankruptcy Protection. The case is now closed.

Apart from this, during the last five years preceding the date of this Prospectus, no member of the Board of Directors,

Corporate Assembly or the Senior Management has:

any convictions in relation to indictable offences or convictions in relation to fraudulent offences;

received any official public incrimination and/or sanctions by any statutory or regulatory authorities (including

designated professional bodies) or ever been disqualified by a court from acting as a member of the

administrative, management or supervisory bodies of a company or from acting in the management or conduct of

the affairs of any company; or

been declared bankrupt or been associated with any bankruptcy, receivership or liquidation in his capacity as a

founder, director or senior manager of a company.

15.6 Nomination Committee

The Company's Articles of Association provide for a nomination committee composed of minimum three members who are

elected by the General Meeting. The nomination committee is responsible for nominating the members of the Board of

Directors, the Corporate Assembly and the nomination committee. The nomination committee of the Company comprises

of the following members: Kjetil Kristiansen (Chairman), Finn Haugan and Hilde Myrberg. The term for Kjetil Kristiansen

expire at the annual general meeting of the Company in 2015, while the term for Finn Haugan and Hilde Myrberg expire

at the annual general meeting of the Company in 2016.

15.7 Audit Committee

The Company has an audit committee, the members of which as of the date of this Prospectus are Anne Marie Cannon,

Jørgen C. Arentz Rostrup and Gro Kielland, all members of the Board of Directors. The primary purposes of the audit

committee are to:

assist the Board of Directors in discharging its duties relating to the safeguarding of assets; the operation of

adequate system and internal controls; control processes and the preparation of accurate financial reporting and

statements in compliance with all applicable legal requirements, corporate governance and accounting

standards; and

provide support to the board of directors on the risk profile and risk management of the Company.

The audit committee reports and makes recommendations to the Board of Directors, but the Board of Directors retains

responsibility for implementing such recommendations. Both Anne Marie Cannon and Jørgen C. Arentz Rostrup have

relevant qualifications within accounting/auditing.

15.8 Corporate Governance

The Norwegian Code of Practice for Corporate Governance

In accordance with the Norwegian Accounting Act section 3-3b, the Company includes a description of principles for

corporate governance as part of the Board of Directors’ report in the annual financial statement (or alternatively, makes

reference to where this information can be found).

The Norwegian Corporate Governance Board (“NCGB”) has issued the Norwegian Code of Practice for Corporate

Governance (the “Code”). The code can be found on www.ncgb.no. Adherence to the Code is based on a “comply or

explain” principle, which means that a company must comply with all the recommendations of the Code or explain why it

has chosen an alternative approach to specific recommendations.

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Oslo Stock Exchange requires listed companies to publish an annual statement of their policy on corporate governance in

accordance with the Code in force at the time. Continuing obligations for companies listed at Oslo Stock Exchange is

available at www.oslobors.no.

The Company complies with the rules and regulations described in this Section 15.8 “Corporate Governance”. The

Company complies with the current edition of the Code issued on 21 December 2012.

Code of Ethics

The Company has adopted a Code of Ethics to ensure that employees, hired personnel, consultants and others acting on

behalf of the Company, do so in a consistent manner with respect to ethics and good business practice. The Code of

Ethics clarifies the Company’s fundamental ethical values and is a guideline for those making decisions on behalf of the

Company.

The Company will comply with laws, regulations and conventions in the areas in which it operates, however, the

established Code of Ethics extends beyond compliance.

15.9 Employees

The table below set out the number of employees of the Company, and certain other employee data, as of or for the

periods indicated.

Four Months

Ended 31 April

2014

Year Ended 31 December

2013 2012 2011

Employees, at period end .................................... 253 230 214 173

Number of employees in Norway ............................ 236 216 212 171

Number of employees in other regions ..................... 17 14 2 2

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16. RELATED PARTY TRANSACTIONS

This Section provides information certain transactions which the Company is, or has been, subject to with its related

parties during the three years ended 31 December 2013, 2012 and 2011 and up to the date of this Prospectus. For the

purposes of the following disclosures of related party transactions, "related parties" are those that are considered as

related parties of the Company pursuant to IAS 24 "Related Party Disclosures".

16.1 Related Party Transactions

Owners with Controlling Interests

By the end of 2013, Aker ASA (through Aker Capital AS) was the largest Shareholder in the Company with a total owning

interest of approximately 49.99%. An overview of the 20 largest Shareholders is provided in section 14 “Major

Shareholders”. The whole Aker group is deemed to be a related party due to the indirect ownership of Aker ASA.

Transactions with Related Parties

2013

In connection with the Company’s development projects on Jette and Ivar Aasen, agreements have been entered into

with Aker Solutions and its subsidiaries, which are associate companies to Aker ASA. The Company’s related party

transactions for 2013 are included in the table below.

2012

Transocean Drilling (formerly Aker Drilling) is a party to the contract for Transocean Barents (formerly Aker Barents). In

connection with the Company’s development projects on Jette and Ivar Aasen, agreements have been entered into with

Aker Solutions and its subsidiaries, which are associate companies to Aker ASA. The Company's share of transactions in

2012 is included in the table below.

2011

Transocean Drilling is counterpart in the lease agreement for Transocean Barents. In 2011, Transocean Drilling was a

subsidiary of Aker ASA during the period from 1 January to 24 February, and an associated company from 24 February

until 30 September 2011. The company was sold to Transocean with effect from 30 September 2011. The table below

shows transactions during the ownership period from 1 January 2011 to 30 September 2011. In connection with the

development projects on Jette and Draupne, agreements have been entered into with Aker Solutions and its subsidiaries,

which are associate companies to Aker ASA. The Company's share of transactions in 2011 is included in the table below.

All transactions with related parties are carried out on the basis of the "arm’s length" principle.

Year Ended

Related Party Receivables(+) /liabilities (-) 2013 2012 2011

Aker Solutions Trade creditors — (7,525) —

Related Party Receivables(+) /expenses (-)

Aker ASA Software and board

remuneration (1,444) (6,749) —

Aker Solutions Delivery to Ivar Aasen, Jette

and Draupne development (55,041) (97,806) (18,200)

Other Aker companies Hire of Transocean Barents (1,758) — (328,762)

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17. DIVIDEND AND DIVIDEND POLICY

This Section provides information about the dividend policy and dividend history of the Company, as well as certain legal

constraints on the distribution of dividends under the Norwegian Public Limited Liability Companies Act (Nw.

allmennaksjeloven). For a discussion of certain financial covenants under the Company’s borrowing arrangements which

may restrict distribution of dividends, see Section 13.7 "Operating and Financial Review—Liquidity and Capital

Resources—Borrowings". Any future dividends declared by the Company will be paid in NOK as this is the currency that

currently is supported by the VPS. The following discussion contains Forward-looking Statements that reflect the

Company's plans and estimates; see Section 4.1 "General Information—Cautionary Note Regarding Forward-Looking

Statements".

17.1 Dividend Policy

The Company seeks to optimise the capital structure by balancing risk, return on equity against lenders’ security and

liquidity requirements. The Company aims to have a good reputation in all debt and equity markets. The Company’s

capital structure is continuously evaluated and an optimal capital structure has been a key priority for the Company.

Future developments will require substantial investments. In addition, the Company plans to carry out an active

exploration programme during the next few years. Therefore, dividends to shareholders will not be given priority in the

short term. In the current period, the Company’s priority is rather to create value for shareholders by identifying the

license portfolio’s underlying values, and by maturing existing discoveries and development projects towards production.

There can be no assurances that in any given period will be proposed or declared, or if proposed or declared, that the

dividend will be as contemplated by the above. In deciding whether to propose a dividend and in determining the

dividend amount, the Company's Board of Directors will take into account legal restrictions, as set out in Section 17.3 “—

Legal Constraints on the Distribution of Dividends", the Company's capital requirements, including capital expenditure

requirements, its financial condition, general business conditions and any restrictions that its borrowing arrangements or

other contractual arrangements in place at the time of the dividend may place on its ability to pay dividends and the

maintaining of appropriate financial flexibility.

Holders of Shares will be entitled to dividends resolved by the shareholders at General Meetings held after consummation

of the Rights Issue.

17.2 Dividend History

The Company has not distributed any dividend since its incorporation in 2006.

17.3 Legal Constraints on the Distribution of Dividends

Dividends may be paid in cash or, in some instances, in kind. The Norwegian Public Limited Liability Companies Act

provides several constraints on the distribution of dividends:

Unless the Company follows the procedures stipulated in Sections 12-4 and 12-6 of the Norwegian Public Limited

Liability Companies Act in respect of reduction of share capital, dividends are payable only out of distributable

equity of the Company. Section 8-1 of the Norwegian Public Limited Liability Companies Act provides that a

company may only distribute dividends to the extent that the company following the distribution still has net

assets which provide coverage for the company's share capital and other non-distributable reserves.

Certain items shall be deducted from the distributable equity, being the total nominal value of treasury shares

which the Company has acquired for ownership or pledge prior to the balance sheet date, and credit and

security that, pursuant to Sections 8-7 to 8-9 of the Norwegian Public Limited Liability Companies Act, prior to

the balance sheet date fall within the limits of distributable equity, provided that such credit and security have

not been repaid or cancelled prior to the resolution date, or a credit to a shareholder to the extent such credit is

cancelled by offset in the dividends. In the event the Company after the balance sheet date has carried out any

disposals that pursuant to the Norwegian Public Limited Liability Companies Act shall fall within the distributable

equity, such disposals shall be deducted from the distributable equity.

The Company cannot distribute dividends which would result in the Company not having an equity which is

adequate in terms of the risk and scope of the Company's business.

The calculation of dividends shall be on the basis of the balance sheet in the Company's last approved annual

financial statements, but the Company's registered share capital at the time of the resolution shall still apply. It

is also possible to distribute extraordinary dividends on the basis of an interim balance sheet which is prepared

and audited in accordance with the rules for annual financial statements and approved by the General Meeting

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of the Company. The interim balance sheet date cannot be dated more than six months prior to the resolution by

the General Meeting of payment of such extraordinary dividend.

The amount of distributable dividends is calculated on the basis of the Company's separate financial statements

and not on the basis of the consolidated financial statements of the Company and its consolidated subsidiaries.

Distribution of dividends is resolved by a majority vote at the general meeting of the shareholders of the

Company and on the basis of a proposal from the Board of Directors. The general meeting cannot distribute a

larger amount than what is proposed or accepted by the Board of Directors.

The Norwegian Public Limited Liability Companies Act does not provide for any time limit after which entitlement to

dividends lapses. Subject to various exceptions, Norwegian law provides a limitation period of three years from the date

on which an obligation is due. There are no dividend restrictions or specific procedures for non-Norwegian resident

shareholders to claim dividends. For a description of withholding tax on dividends applicable to non-Norwegian residents,

see Section 22.2 “Norwegian Taxation—Foreign Shareholders”.

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18. CORPORATE INFORMATION; SHARES AND SHARE CAPITAL

The following is a summary of certain corporate information and other information relating to the Company, the Shares

and share capital of Company, summaries of certain provisions of the Company's Articles of Association and applicable

Norwegian law in effect as of the date of this Prospectus, including the Norwegian Public Limited Liability Companies

Act (Nw. allmennaksjeloven). This summary does not purport to be complete and is qualified in its entirety by

Company’s Articles of Association and applicable Norwegian law.

18.1 Incorporation; Registration Number; Registered Office and Other Company Information

The Company is a Norwegian public limited liability company (Nw. allmennaksjeselskap or ASA), incorporated under the

laws of Norway and in accordance with the Norwegian Public Limited Liability Companies Act. The Company's business

registration number is 989 795 848. The Company was incorporated on 2 May 2006.

The head office and registered address of the Company is Munkegata 26, 7011 Trondheim, Norway, its telephone number

is +47 90 70 60 00, and its website is www.detnor.no.

18.2 Legal Structure

The chart below shows the current legal structure of the Company:

Following the Transaction and completion of the subsequent steps to transfer the assets of Marathon Norway into the

Company’s business, the legal structure will be the same as set out above. For more information, see Section 7.2 “The

Transaction—Transaction Structure”.

18.3 Information on Holdings

The following table sets out information about the entities in which the Company, as of the date of this Prospectus, holds

(directly or indirectly) more than 10% of the outstanding capital and votes (dormant companies are not included).

Name Country of Incorporation Registered Office Holding

Sandvika Fjellstue AS(1) Norway Verdal, Norway 100%

__________

(1) Sandvika Fjellstue AS is a private limited liability company. The company is further described in Section 6.8

“Business Overview—Sandvika Fjellstue AS”.

As of the date of this Prospectus, the Company is of the opinion that its holding in Sandvika Fjellstue AS is unlikely to

have any significant effect on the assessment of its own assets and liabilities, financial condition or profits and losses.

18.4 Share Capital and Share Capital History

As of the date of this Prospectus, the Company's share capital is NOK 140,707,363 divided into 140,707,363 Shares, fully

paid and each Share having a par value of NOK 1. The table below shows the development in the share capital of the

Company from its inception and up to the date of this Prospectus.

Sandvika Fjellstue AS

http://www.det/

140

The table below shows the development in the Company’s share capital for the period from inception to the date hereof:

Date

Capital

Increase (NOK)

Share Capital

After Change

(NOK)

Par Value

of Shares

(NOK)

Subscription

Price New Shares

Total Number of

Outstanding

Shares

Inception...................................................................................................... 20.05.2006 1,000,000 1,000,000 100 — 10,000 10,000

Share Capital

Increase

(contribution-in-

kind) ........................................................................................................ 18.12.2006 4,000,000 5,500,000 1 76.00 4,000,000 5,000,000

Share capital

increase .................................................................................................... 18.12.2006 15,000,000 20,000,000 1 61.00 15,000,000 20,000,000

Share capital

increase .................................................................................................... 22.12.2009 91,111,111 111,111,111 1 39.35416 91,111,111 111,111,111

Share capital

increase .................................................................................................... 07.09.2011 11,111,111 122,222,222 1 44.00 11,111,111 122,222,222

Share capital

increase .................................................................................................... 16.12.2011 5,693,564 127,915,786 1 79.3 5,693,564 127,915,786

Share capital

increase .................................................................................................... 11.12.2012 12,791,577 140,707,363 1 80.50 12,791,577 140,707,363

Assuming that all of the Offer Shares are sold and issued, the Company's share capital upon consummation of the Rights

Issue will amount to NOK 202,618,602 divided into 202,618,602 Shares, each Share having a par value of NOK 1.00.

18.5 Authorisation to Increase the Share Capital and to Issue Shares and Other Instruments

At the Annual General Meeting of the Company held 7 April 2014, the Board of Directors was granted authorisation to

increase the share capital of the Company in accordance with the Norwegian Public Limited Companies Act section 10-14

by a total of up to NOK 14,070,730. The authorisation can be utilised for share capital increases in order to strengthen

the Company’s equity, convert debt into equity and fund business opportunities. The authorisation is valid until the

Annual General Meeting in 2015 (but no later than 30 June 2015). The shareholders’ pre-emptive rights pursuant to the

Norwegian Public Limited Companies Act section 10-14 may be set aside. The authorisation encompasses increase of share

capital with contribution in kind or the right to incur the Company special obligations in accordance with the Norwegian

Public Limited Companies Act section 10-2 and decision on merger pursuant to section 13-5. The authorisation may also

be used in take-over situations, ref. the Norwegian Securities Trading Act section 6-1.

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18.6 Other Financial Instruments

The Company does not have any warrants, options or other instruments convertible into Shares in issue as of the date

hereof.

18.7 Share Classes; Rights Conferred by the Shares

Norwegian law permits a Norwegian public limited liability company to issue different types of shares (e.g. several classes

of shares). In such case the resolution by the shareholders at a general meeting must specify the different rights,

preferences and privileges of each class of shares and the total par value of each class of shares and the total value of all

classes of shares combined. The Company has one class of Shares in issue, and in accordance with the Norwegian Public

Limited Liability Companies Act all Shares in that class provide equal rights in the Company. The holders of the Shares

have no pre-emptive rights in connection with transfer of Shares. The Offer Shares to be issued in the Rights Issue will

give rights in the Company as of registration of the capital increase pertaining to the Rights Issue with the Norwegian

Register of Business Enterprises (Nw. Foretaksregisteret). The rights attaching to the Shares are described in Section 18.9

"Corporate Information; Shares and Share Capital—Certain Aspects of Norwegian Corporate Law ".

18.8 The Articles of Association

The Company's Articles of Association as of the date of this Prospectus are set out in Appendix B—Articles of Association

of this Prospectus. Below is a summary of certain provisions of the Articles of Association of the Company.

Objective

The Company´s objective is to carry out exploration for, and production of, petroleum and activities related thereto,

and, by subscribing for shares or by other means, to participate in corresponding businesses or other business, alone or in

cooperation with other enterprises and interests.

Board of Directors

The Company’s Board of Directors shall consist of a minimum of five and a maximum of ten members elected for a period

of up two years.

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No Restrictions on Transfer of Shares

The Articles of Association do not provide for any restrictions, or a right of first refusal, on transfer of Shares. Share

transfers are not subject to approval by the Board of Directors.

General Meetings

Documents which deal with matters that are to be considered by the shareholders at General Meetings are not required

to be sent to the shareholders, provided that such documents have been made available on the Company’s website. A

shareholder may in any case request such documents to be sent to him.

Nomination Committee

The Company shall, pursuant to article 8 of the Articles of Association, have a nomination committee consisting of three

members to be elected by the General Meeting of the Company. The nomination committee shall prepare the election of

members of the Board of Directors.

18.9 Certain Aspects of Norwegian Corporate Law

General Meetings

In accordance with Norwegian law, the Annual General Meeting of the Company's shareholders is required to be held each

year on or prior to June 30. Norwegian law requires that written notice of General Meetings setting forth the time, date

and agenda of the meeting be sent to all shareholders whose addresses are known at least three weeks prior to the date

of the meeting. A shareholder may vote at the General Meeting either in person or by proxy. Although Norwegian law

does not require the Company to send proxy forms to its shareholders for General Meetings, the Company plans to include

a proxy form with notices of General Meetings. All of the Company's shareholders who are registered in the register of

shareholders maintained with the VPS as of the date of the General Meeting, or who have otherwise reported and

documented ownership to Shares, are entitled to participate at General Meetings, without any requirement of pre-

registration.

Apart from the Annual General Meeting, Extraordinary General Meetings of shareholders may be held if the Board of

Directors considers it necessary. An Extraordinary General Meeting of shareholders must also be convened for the

consideration of specific matters at the written request of the Company's auditor or of shareholders representing a total

of at least 5% of the Company's share capital. The requirements for notice and admission to the Annual General Meeting

of the Company's shareholders also apply for Extraordinary General Meetings of shareholders.

Voting Rights; Amendments to the Articles of Association

Each of the Company's Shares carry one vote. In general, decisions that shareholders are entitled to make under

Norwegian law or the Company's Articles of Association may be made by a simple majority of the votes cast. In the case

of elections, the persons who obtain the greatest number of votes cast are elected. However, as required under

Norwegian law, certain decisions, including resolutions to derogate from the shareholders preferential rights to subscribe

in connection with any share issue in the Company, to approve a merger or demerger of the Company, to amend the

Articles of Association, to authorise an increase or reduction in the share capital, to authorise an issuance of convertible

loans or warrants by the Company or to authorise the board of directors to purchase the Shares and hold them as treasury

shares or to dissolve the Company, must receive the approval of at least two-thirds of the aggregate number of votes cast

as well as at least two-thirds of the share capital represented at a general meeting. Norwegian law further requires that

certain decisions, which have the effect of substantially altering the rights and preferences of any shares or class of

shares, receive the approval by the holders of such shares or class of shares as well as the majority required for amending

the Articles of Association.

Decisions that (i) would reduce the rights of some or all of the Company’s shareholders in respect of dividend payments or

other rights to assets or (ii) restrict the transferability of the Shares, require that at least 90% of the share capital

represented at the general meeting of the Company’s shareholders in question vote in favour of the resolution, as well as

the majority required for amending the Articles of Association. Certain types of changes in the rights of shareholders

require the consent of all shareholders affected thereby as well as the majority required for amending the Articles of

Association.

In general, only shareholders registered in the VPS are entitled to vote on Shares. Neither beneficial owners of Shares

that are registered in the name of a nominee are generally not entitled to vote on Shares under Norwegian law, nor are

persons who are designated in the VPS register as the holder of such Shares as nominees.

There are no quorum requirements that apply to the general meetings of the shareholders of the Company.

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Additional Issuances and Preferential Rights

If the Company issues any new Shares, including bonus share issues, the Company's Articles of Association must be

amended, which requires the same vote as other amendments to its Articles of Association. In addition, under Norwegian

law, the Company's shareholders have a preferential right to subscribe for new Shares issued by the Company.

Preferential rights may be derogated from by resolution in a General Meeting of the Company's shareholders passed by

the same vote required to approve amending the Articles of Association. A derogation of the shareholders' preferential

rights in respect of bonus issues requires the approval of all outstanding Shares.

At a General Meeting the Company's shareholders may, by the same vote as is required for amending the Articles of

Association, authorize the Board of Directors to issue new Shares, and to derogate from the preferential rights of

shareholders in connection with such issuances. Such authorisation may be effective for a maximum of two years, and the

par value of the Shares to be issued may not exceed 50% of the registered nominal share capital when the authorisation is

registered with the Norwegian Register of Business Enterprises.

Under Norwegian law, the Company may increase its share capital by a bonus share issue, subject to approval by the

Company's shareholders, by transfer from the Company's distributable equity or from the Company's share premium

reserve, and thus the share capital increase does not require any payment of a subscription price by the shareholders.

Any bonus issues may be affected either by issuing new shares to the Company's existing shareholders or by increasing the

par value of the Company's outstanding Shares.

Issuance of new Shares to shareholders who are citizens or residents of the United States upon the exercise of

preferential rights may require the Company to file a registration statement in the United States under United States

securities laws. Should the Company in such a situation decide not to file a registration statement, the Company's US

shareholders may not be able to exercise their preferential rights. If a US shareholder is ineligible to participate in a

rights offering, such shareholder would not receive the rights at all and the rights would be sold on the shareholder's

behalf by the Company if deemed appropriate by the Company.

Minority Rights

Norwegian law sets forth a number of protections for minority shareholders of the Company, including but not limited to

those described in this paragraph and the description of General Meetings as set out above. Any of the Company's

shareholders may petition Norwegian courts to have a decision of the Board of Directors or the Company's shareholders

made at the General Meeting declared invalid on the grounds that it unreasonably favours certain shareholders or third

parties to the detriment of other shareholders or the Company itself. The Company's shareholders may require the courts

to dissolve the Company as a result of such decisions. Minority shareholders holding 5% or more of the Company's share

capital have a right to demand in writing that the Company's Board of Directors convene an Extraordinary General

Meeting of the Company's shareholders to discuss or resolve specific matters. In addition, any of the Company's

shareholders may in writing demand that the Company place an item on the agenda for any General Meeting as long as

the Company is notified in time for such item to be included in the notice of the meeting. If the notice has been issued

when such a written demand is presented, a renewed notice must be issued if at least two weeks remain before the

General Meeting is to be held.

Rights of Redemption and Repurchase of Shares

The share capital of the Company may be reduced by reducing the par value of the Shares or by cancelling Shares. Such a

decision requires the approval of at least two-thirds of the aggregate number of votes cast and at least two-thirds of the

share capital represented at a General Meeting of the Company's shareholders. Redemption of individual Shares requires

the consent of the holders of the Shares to be redeemed.

The Company may purchase its own Shares provided that the Board of Directors has been granted an authorisation to do

so by a General Meeting of the Company's shareholders with the approval of at least two-thirds of the aggregate number

of votes cast and at least two-thirds of the share capital represented at the meeting. The aggregate par value of treasury

shares so acquired, and held by the Company must not exceed 10% of the Company's share capital, and treasury shares

may only be acquired if the Company's distributable equity, according to the latest adopted balance sheet, exceeds the

consideration to be paid for the shares. The authorisation by the General Meeting of the Company's shareholders cannot

be granted for a period exceeding 24 months.

Shareholder Vote on Certain Reorganisations

A decision of the Company's shareholders to merge with another company or to demerge requires a resolution by the

General Meeting of the shareholders passed by at least two-thirds of the aggregate votes cast and at least two-thirds of

the share capital represented at the General Meeting. A merger plan, or demerger plan signed by the Board of Directors

144

along with certain other required documentation, would have to be sent to all the Company's shareholders at least one

month prior to the General Meeting of the Company's shareholders to pass upon the matter.

Liability of Directors

Members of the Board of Directors owe a fiduciary duty to the Company and its shareholders. Such fiduciary duty requires

that the directors act in the best interests of the Company when exercising their functions and exercise a general duty of

loyalty and care towards the Company. Their principal task is to safeguard the interests of the Company.

Members of the Board of Directors may each be held liable for any damage they negligently or wilfully cause the

Company. Norwegian law permits the General Meeting of the Company's shareholders to discharge any such person from

liability, but such discharge is not binding on the Company if substantially correct and complete information was not

provided at the General Meeting of the Company's shareholders passing upon the matter. If a resolution to discharge the

Company's directors from liability or not to pursue claims against such a person has been passed by a General Meeting of

the Company's shareholders with a smaller majority than that required to amend the Company's Articles of Association,

shareholders representing more than 10% of the share capital or, if there are more than 100 shareholders, more than 10%

of the shareholders may pursue the claim on the Company's behalf and in its name. The cost of any such action is not the

Company's responsibility but can be recovered from any proceeds the Company receives as a result of the action. If the

decision to discharge any of the Company's directors from liability or not to pursue claims against the Company's directors

is made by such a majority as is necessary to amend the Articles of Association, the minority shareholders of the Company

cannot pursue such claim in the Company's name.

Indemnification of Directors

Neither Norwegian law nor the Articles of Association contain any provision concerning indemnification by the Company of

the members of the Board of Directors. The Company is permitted to purchase, and has purchased, insurance to cover the

Company's directors against certain liabilities they may incur in their capacity as such.

Distribution of Assets on Liquidation

Under Norwegian law, the Company may be wound-up by a resolution of the Company's shareholders at the General

Meeting passed by at least two-thirds of the aggregate votes cast and at least two-thirds of the share capital represented

at the meeting. In the event of liquidation, the Shares rank equally in the event of a return on capital by the Company, if

any.

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19. SECURITIES TRADING IN NORWAY

The following is a summary of certain information in respect of trading and settlement of shares on the Oslo Stock

Exchange, securities registration in Norway and certain provisions of applicable Norwegian securities law, including the

Norwegian Securities Trading Act, in effect as of the date of this Prospectus. This summary does not purport to be

complete and is qualified in its entirety by Norwegian law.

19.1 Trading and Settlement

The Oslo Stock Exchange comprise two separate trading markets for trading in equities, Oslo Børs, a stock exchange

operated by Oslo Børs ASA, and Oslo Axess, a regulated market operated by Oslo Børs ASA.

Trading of equities on the Oslo Stock Exchange is carried out in the electronic trading system Millennium Exchange. This

trading system is in use by all markets operated by the London Stock Exchange as well as by the Borsa Italiana and the

Johannesburg Stock Exchange.

Official trading on the Oslo Stock Exchange takes place between 9:00 a.m. CET and 4:30 p.m. CET each trading day, with

pre-trade period between 08:15 a.m. CET and 9:00 a.m. CET, a closing auction from 4:20 p.m. CET to 4:25 p.m. CET, and

a post-trade period from 4:25 p.m. CET to 5:30 p.m. CET.

The settlement period for trading on the Oslo Stock Exchange is three trading days (T+3). Pursuant to the new settlement

requirements in the EU, including Regulation on improving securities settlement in the EU and on central securities

depositories (CSDs) and amending Directive 98/26/EC (CSDR), the VPS has decided to introduce a settlement period of

two trading days (T+2) from 6 October 2014. This means that securities will be settled on the investor’s account in the

VPS two trading days after the transaction, and that the seller will receive payment after two trading days.

Investment services in Norway may only be provided by Norwegian investment firms holding a license under the

Norwegian Securities Trading Act, branches of investment firms from a member state of the EEA or investment firms from

outside the EEA that have been licensed to operate in Norway. Investment firms in an EEA member state may also provide

cross-border investment services into Norway.

19.2 Information, Control and Surveillance

Under Norwegian law, the Oslo Stock Exchange is required to perform a number of surveillance and control functions. The

Surveillance and Corporate Control unit of Oslo Stock Exchange monitors all market activity on a continuous basis. Market

surveillance systems are largely automated, promptly warning department personnel of abnormal market developments.

The Norwegian FSA controls the issuance of securities in both the equity and bond markets in Norway and evaluates

whether the issuance documentation contains the required information and whether it would otherwise be unlawful to

carry out the issuance.

Under Norwegian law, a company that is listed on a Norwegian regulated market, or is subject to the application for

listing on such market, must promptly release any inside information (that is, precise information about financial

instruments, the issuer thereof or other matters that are likely to have a significant effect on the price of the relevant

financial instruments or related financial instruments, and that are not publicly available or commonly known in the

market). A company may, however, delay the release of such information in order not to prejudice its legitimate

interests, provided that it is able to ensure the confidentiality of the information and that the delayed release would not

be likely to mislead the public. Oslo Stock Exchange may levy fines on companies violating these requirements.

19.3 The VPS and Transfer of Shares

The Company's shareholder register is operated through the VPS. The VPS is the Norwegian paperless centralised

securities register. It is a computerised bookkeeping system in which the ownership of, and all transactions relating to,

Norwegian listed shares must be recorded. The VPS and the Oslo Stock Exchange are both wholly owned by Oslo Stock

Exchange VPS Holding ASA.

All transactions relating to securities registered with the VPS are made through computerised book entries. No physical

share certificates are, or may be, issued. The VPS confirms each entry by sending a transcript to the registered

shareholder irrespective of any beneficial ownership. To give effect to such entries, the individual shareholder must

establish a share account with a Norwegian account agent. Norwegian banks, Norges Bank (Norway's central bank),

authorised securities brokers in Norway and Norwegian branches of credit institutions established within the EEA are

allowed to act as account agents.

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The entry of a transaction in the VPS is prima facie evidence in determining the legal rights of parties as against the

issuing company or any third party claiming an interest in the given security.

The VPS is liable for any loss suffered as a result of faulty registration or an amendment to, or deletion of, rights in

respect of registered securities unless the error is caused by matters outside the VPS's control which the VPS could not

reasonably be expected to avoid or overcome the consequences of. Damages payable by the VPS may, however, be

reduced in the event of contributory negligence by the aggrieved party.

The VPS must provide information to the Norwegian FSA on an on-going basis, as well as any information that the

Norwegian FSA requests. Further, Norwegian tax authorities may require certain information from the VPS regarding any

individual's holdings of securities, including information about dividends and interest payments.

19.4 Shareholder Register

Under Norwegian law, shares are registered in the name of the beneficial owner of the shares. As a general rule, there

are no arrangements for nominee registration, and Norwegian shareholders are not allowed to register their shares in VPS

through a nominee. However, foreign shareholders may register their shares in the VPS in the name of a nominee (bank or

other nominee) approved by the Norwegian FSA. An approved and registered nominee has a duty to provide information

on demand about beneficial shareholders to the company and to the Norwegian authorities. In case of registration by

nominees, the registration in the VPS must show that the registered owner is a nominee. A registered nominee has the

right to receive dividends and other distributions but cannot vote in General Meetings on behalf of the beneficial owners.

19.5 Foreign Investment in Norwegian Shares

Foreign investors may trade shares listed on the Oslo Stock Exchange through any broker that is a member of the Oslo

Stock Exchange, whether Norwegian or foreign.

19.6 Disclosure Obligations

If a person's, entity's or consolidated Company's proportion of the total issued shares and/or rights to shares in a company

listed on a regulated market in Norway (with Norway as its home state, which will be the case for the Company) reaches,

exceeds or falls below the respective thresholds of 5%, 10%, 15%, 20%, 25%, 1/3, 50%, 2/3 or 90% of the share capital or

the voting rights of that company, the person, entity or Company in question has an obligation under the Norwegian

Securities Trading Act to notify the Oslo Stock Exchange and the issuer immediately. The same applies if the disclosure

thresholds are passed due to other circumstances, such as a change in the company's share capital.

19.7 Insider Trading

According to Norwegian law, subscription for, purchase, sale or exchange of financial instruments that are listed, or

subject to the application for listing, on a Norwegian regulated market, or incitement to such dispositions, must not be

undertaken by anyone who has inside information, as defined in Section 3-2 of the Norwegian Securities Trading Act. The

same applies to the entry into, purchase, sale or exchange of options or futures/forward contracts or equivalent rights

whose value is connected to such financial instruments or incitement to such dispositions.

19.8 Mandatory Offer Requirement

The Norwegian Securities Trading Act requires any person, entity or consolidated group that becomes the owner of shares

representing more than one-third of the voting rights of a Norwegian company listed on a Norwegian regulated market to,

within four weeks, make an unconditional general offer for the purchase of the remaining shares in that company. A

mandatory offer obligation may also be triggered where a party acquires the right to become the owner of shares that,

together with the party's own shareholding, represent more than one-third of the voting rights in the company and the

Oslo Stock Exchange decides that this is regarded as an effective acquisition of the shares in question.

The mandatory offer obligation ceases to apply if the person, entity or consolidated group sells the portion of the shares

that exceeds the relevant threshold within four weeks of the date on which the mandatory offer obligation was triggered.

When a mandatory offer obligation is triggered, the person subject to the obligation is required to immediately notify the

Oslo Stock Exchange and the company in question accordingly. The notification is required to state whether an offer will

be made to acquire the remaining shares in the company or whether a sale will take place. As a rule, a notification to the

effect that an offer will be made cannot be retracted. The offer and the offer document required are subject to approval

by the Oslo Stock Exchange, in its capacity as Take-over Authority of Norway, before the offer is submitted to the

shareholders or made public.

The offer price per share must be at least as high as the highest price paid or agreed to be paid by the offeror for the

shares in the six-month period prior to the date the threshold was exceeded. However, if it is clear that that the market

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price was higher when the mandatory offer obligation was triggered, the offer price shall be at least as high as the

market price. If the acquirer acquires or agrees to acquire additional shares at a higher price prior to the expiration of

the mandatory offer period, the acquirer is obliged to restate its offer at such higher price. A mandatory offer must be in

cash or contain a cash alternative at least equivalent to any other consideration offered.

In case of failure to make a mandatory offer or to sell the portion of the shares that exceeds the relevant mandatory

offer threshold within four weeks, the Oslo Stock Exchange may force the acquirer to sell the shares exceeding the

threshold by public auction. Moreover, a shareholder who fails to make an offer may not, as long as the mandatory offer

obligation remains in force, exercise rights in the company, such as voting in a General Meeting of the Company's

shareholders, without the consent of a majority of the remaining shareholders. The shareholder may, however, exercise

his/her/its rights to dividends and pre-emption rights in the event of a share capital increase. If the shareholder neglects

his/her/its duty to make a mandatory offer, the Oslo Stock Exchange may impose a cumulative daily fine that accrues

until the circumstance has been rectified.

Any person, entity or consolidated group that owns shares representing more than one-third of the votes in a Norwegian

company listed on a Norwegian regulated market is obliged to make an offer to purchase the remaining shares of the

company (repeated offer obligation) if the person, entity or consolidated Company through acquisition becomes the

owner of shares representing 40%, or more of the votes in the company. The same applies correspondingly if the person,

entity or consolidated Company through acquisition becomes the owner of shares representing 50% or more of the votes in

the company. The mandatory offer obligation ceases to apply if the person, entity or consolidated Company sells the

portion of the shares which exceeds the relevant threshold within four weeks of the date on which the mandatory offer

obligation was triggered.

Any person, entity or consolidated Company that has passed any of the above mentioned thresholds in such a way as not

to trigger the mandatory bid obligation, and has therefore not previously made an offer for the remaining shares in the

company in accordance with the mandatory offer rules is, as a main rule, obliged to make a mandatory offer in the event

of a subsequent acquisition of shares in the company.

19.9 Compulsory Acquisition

Pursuant to the Norwegian Public Limited Liability Companies Act and the Norwegian Securities Trading Act, a

shareholder who, directly or through subsidiaries, acquires shares representing 90% or more of the total number of issued

shares in a Norwegian public limited liability company, as well as 90% or more of the total voting rights, has a right, and

each remaining minority shareholder of the company has a right to require such majority shareholder, to effect a

compulsory acquisition for cash of the shares not already owned by such majority shareholder. Through such compulsory

acquisition the majority shareholder becomes the owner of the remaining shares with immediate effect.

If a shareholder acquires shares representing more than 90% of the total number of issued shares, as well as 90% or more

of the total voting rights, through a voluntary offer in accordance with the Norwegian Securities Trading Act, a

compulsory acquisition can, subject to the following conditions, be carried out without such shareholder being obliged to

make a mandatory offer: (i) the compulsory acquisition is commenced no later than four weeks after the acquisition of

shares through the voluntary offer, (ii) the price offered per share is equal to or higher than the offer price would have

been in a mandatory offer, and (iii) the settlement is guaranteed by a financial institution authorised to provide such

guarantees in Norway.

A majority shareholder who effects a compulsory acquisition is required to offer the minority shareholders a specific price

per share, the determination of which is at the discretion of the majority shareholder. However, where the offeror, after

making a mandatory or voluntary offer, has acquired more than 90% of the voting shares of a company and a

corresponding proportion of the votes that can be cast at the General Meeting, and the offeror pursuant to Section 4-25

of the Public Limited Liability Companies Act completes a compulsory acquisition of the remaining shares within three

months after the expiry of the offer period, it follows from the Norwegian Securities Trading Act that the redemption

price shall be determined on the basis of the offer price for the mandatory/voluntary offer unless specific reasons

indicate another price.

Should any minority shareholder not accept the offered price, such minority shareholder may, within a specified deadline

of not less than two months, request that the price be set by a Norwegian court. The cost of such court procedure will, as

a general rule, be the responsibility of the majority shareholder, and the relevant court will have full discretion in

determining the consideration to be paid to the minority shareholder as a result of the compulsory acquisition.

Absent a request for a Norwegian court to set the price, or any other objection to the price being offered in a compulsory

acquisition, the minority shareholders would be deemed to have accepted the offered price after the expiry of the

specified deadline for raising objections to the price offered in the compulsory acquisition.

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19.10 Foreign Exchange Controls

There are currently no foreign exchange control restrictions in Norway that would potentially restrict the payment of

dividends to a shareholder outside Norway, and there are currently no restrictions that would affect the right of

shareholders of a Norwegian company who are not residents in Norway to dispose of their shares and receive the proceeds

from a disposal outside Norway. There is no maximum transferable amount either to or from Norway, although

transferring banks are required to submit reports on foreign currency exchange transactions into and out of Norway into a

central data register maintained by the Norwegian customs and excise authorities. The Norwegian police, tax authorities,

customs and excise authorities, the National Insurance Administration and the Norwegian FSA have electronic access to

the data in this register.

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20. TERMS OF THE RIGHTS ISSUE

This Section provides important information about the terms and conditions for the Rights Issue. Investing in the Offer

Shares involves inherent risks. In making an investment decision, each investor must rely on his or her own examination

and analysis of, and enquiry into, the Company and the terms of the Rights Issue, including the merits and risks

involved. None of the Company or the Joint Bookrunners, nor any of their respective representatives or advisers, are

making any representation to any offeree, subscriber or purchaser of the Offer Shares regarding the legality of an

investment in the Offer Shares by such offeree, subscriber or purchaser under the laws applicable to such offeree or

subscriber or purchaser. Each investor should consult with his or her own advisors as to the legal, tax, business, financial

and related aspects of a purchase or subscription of the Offer Shares. You should read this section in conjunction with

the other parts of the Prospectus, in particular Section 2 "Risk Factors".

20.1 The Rights Issue

The Rights Issue comprises 61,911,239 Offer Shares, each with a nominal value of NOK 1.00, offered by the Company at a

Subscription Price of NOK 48.50 per Offer Share, thereby raising gross proceeds of NOK 3,002.7 million. Existing

Shareholders will be granted tradable Subscription Rights providing a preferential right to subscribe for and be allocated

Offer Shares in the Rights Issue. Oversubscription and subscription without Subscription Rights will be permitted;

however, there can be no assurance that Offer Shares will be allocated for such subscriptions.

The table below sets out certain indicative key dates for the Rights Issue, subject to change:

Date

Last day of trading in the Shares inclusive of Subscription Rights (Cut-off Date) .................. 9 July 2014

First day of trading in the Shares excluding Subscription Rights ..................................... 10 July 2014

Record Date for determining the Existing Shareholders ............................................... 14 July 2014

Subscription Period commences........................................................................... 15 July 2014 at 09:00 hours (CET)

Trading of Subscription Rights on the Oslo Stock Exchange commences ............................ 15 July 2014 at 09:00 hours (CET)

Trading of Subscription Rights on the Oslo Stock Exchange ends 24 July 2014 at 16:30 hours (CET)

Subscription Period ends ................................................................................... 29 July 2014 at 16:30 hours (CET)

Allocation of Offer Shares .................................................................................. On or about 30 July 2014

Distribution of allocation letters .......................................................................... On or about 30 July 2014

Payment Date ................................................................................................ 4 August 2014

Registration of the capital increase and issuance of the Offer Shares .............................. On or about 5 August 2014

Delivery of the Offer Shares ............................................................................... On or about 6 August 2014

Listing and commencement of trading of the Offer Shares on the Oslo Stock

Exchange .................................................................................................

On or about 6 August 2014

20.2 Resolutions to Undertake and Implement the Rights Issue

On 3 July 2014, an Extraordinary General Meeting of the Company passed the following resolution to increase its share

capital through the Rights Issue:

(a) The company’s share capital is increased by an amount of minimum NOK 20,000,000 and maximum NOK

300,000,000. The new shares shall each have a par value of NOK 1. The gross proceeds shall be

approximately NOK 3,000,000,000, being the NOK equivalent of approximately USD 500,000,000, and the

exact amount of the increase is therefore to be determined when the Board of Directors determines the

subscription price in accordance with item (b) below.

(b) The Board of Directors shall determine the subscription price within a lower limit of NOK 10 and an upper

limit of NOK 150 per share.

(c) The Board of Director’s determination of the subscription price and the exact amount of increase shall be

communicated through a stock exchange announcement to be sent by 14:00 hrs. on a trading day on the Oslo

Stock Exchange.

(d) The company’s shareholders as of the expiry of the trading day when the company makes the announcement

as provided for in item (c) (“Cut-off Date”), as evidenced by the Company’s share register in the Norwegian

Central Securities Depository (VPS) following ordinary settlement (T+3) of trades carried out on the Cut-off

Date, shall have a preferential right to subscribe for the shares in proportion to their shareholding in the

company, cfr. the Public Limited Liability Companies Act Section 10-4 (1).

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(e) The subscription period shall start the 4th trading day after the Cut-off Date, provided, however, that the

subscription period shall not start until the Financial Supervisory Authority of Norway (Finanstilsynet) has

approved the prospectus prepared in connection with the rights issue. The subscription period is two weeks.

Subscription of shares shall take place on a designated subscription form within the expiry of the

subscription period.

Tradable subscription rights shall be issued and the subscription rights shall be registered in the Norwegian

Central Securities Depository (VPS). The subscription rights are tradable from commencement of the

subscription period and until 16:30 (Oslo time) three trading days prior to the end of the subscription

period. Over-subscription and subscription without subscription rights are permitted. In respect any

shareholder who is not entitled to subscribe for new shares as a result of the limitations imposed by the

laws in the country where such shareholder is resident or citizen, the company (or an agent appointed by

the Company) shall have the right (but no obligation) to sell such shareholder’s subscription rights against

the payment of net sales proceeds to such shareholders.

(g) The shares shall be allocated by the Board of Directors.

(h) Payment for the shares shall take place by way of cash payment within four trading days after expiry of the

subscription period. When subscriptions for shares are made, each subscriber domiciled in Norway must by

separate notice on the subscription form grant DNB Bank ASA a non-recurrent authority to debit a specific

bank account in Norway for the subscription amount corresponding to the amount of shares allocated. The

allocated amount will be debited from the subscriber’s account on the payment date. For other subscribers,

payment shall be made to a separate account in the company’s name.

(i) The new shares give shareholder's rights in the Company, including the right to dividends, from the time of

registration of the share capital increase in the Norwegian Register of Business Enterprises. At the same

time, section 4, first sentence, of the Articles of Association shall be amended to reflect the new share

capital.

(j) Shares which have not been subscribed by and allocated to other subscribers in the rights issue at the end of

the subscription period shall be allocated pro rate to DNB Markets, BNP PARIBAS, Nordea Markets and JP

Morgan, who have committed themselves, subject to certain conditions, to subscribe for shares for an

aggregate amount of up to NOK 1,500,300,000. Such shares shall be subscribed by said underwriters within

four trading days after expiry of the subscription period. The underwriters have a pro rata liability, and

each underwriter’s liability is limited to the maximum amount each underwriter has committed to

subscribe.

(k) The costs payable in connection with the rights issue will amongst other depend on the final size of the

rights issue, but currently estimated costs is in the region of NOK 25 to 40 million, including payment of a

commission for the underwriting of an amount of 1% of the aggregate underwritten amount.

20.3 Conditions for Completion of the Rights Issue

The completion of the Rights Issue is subject to the condition that Aker Capital AS validly subscribes for its pro rata share

of the Rights Issue, see section 20.17 “—Participation of Aker Capital AS and Members of the Senior Management and the

Board of Directors in the Rights Issue”, and that unless the Rights Issue is fully subscribed, the Underwriting Agreement

remains in full force and effect. See Section 20.18 “—The Underwriting” for a description of the underwriting and the

Underwriting Agreement, including the conditions and termination rights to which the underwriting is subject.

If it becomes clear that the above condition will not be fulfilled, the Rights Issue will be withdrawn. If the Rights Issue is

withdrawn, all Subscription Rights will lapse without value, any subscriptions for, and allocations of, Offer Shares that

have been made will be disregarded and any payments for Offer Shares made will be returned to the subscribers without

interest or any other compensation. The lapsing of Subscription Rights shall be without prejudice to the validity of any

trades in Subscription Rights, and investors will not receive any refund or compensation in respect of Subscription Rights

purchased in the market.

20.4 Subscription Price

The Subscription Price in the Rights Issue is NOK 48.50 per Offer Share. The Subscription Price in the Rights Issue is NOK

48.50 per Offer Share. The Subscription Price represents a discount of approximately 32.6% to the closing price of NOK

72.00 per Share as quoted on the Oslo Stock Exchange on 8 July 2014, and a discount of approximately 25.2% to the

theoretical share price exclusive of the Subscription Rights (TERP) based on the Company’s closing share price of NOK

72.00 on 8 July 2014.

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20.5 Subscription Period

The Subscription Period will commence on 15 July 2014 at 09:00 hours (CET) and end on 29 July 2014 at 16:30 hours

(CET). The Subscription Period may not be extended or shortened.

20.6 Record Date for Existing Shareholders

Shareholders who are registered in the Company’s shareholder register in the VPS as of the expiry of 14 July 2014 (the

Record Date) will receive Subscription Rights.

For the purposes of determining eligibility to Subscription Rights, the Company will, however, look solely to its register of

shareholders as of expiry of the Record Date.

Provided that the delivery of traded Shares was made with ordinary T+3 settlement in the VPS, Shares that were acquired

on or before the Cut-off Date 9 July 2014 will give the right to receive Subscription Rights, whereas Shares that were

acquired from and including 10 July 2014 will not give the right to receive Subscription Rights.

20.7 Subscription Rights

Existing Shareholders will be granted Subscription Rights giving a preferential right to subscribe for and be allocated Offer

Shares in the Rights Issue. Each Existing Shareholder will be granted 11 Subscription Rights for every 25 Shares registered

as held by such Existing Shareholder at the expiry of the Record Date. The number of Subscription Rights granted to each

Existing Shareholder will be rounded down to the nearest whole Subscription Right. Subscription Rights will not be

granted for the Shares held in treasury by the Company. Each Subscription Right will, subject to applicable securities

laws, give the right to subscribe for and be allocated one Offer Share in the Rights Issue.

The Subscription Rights will be credited to and registered on each Existing Shareholder’s VPS account on or about 15 July

2014 under the International Securities Identification Number (ISIN) 0010714892. The Subscription Rights will be

distributed free of charge to Existing Shareholders.

The Subscription Rights may be used to subscribe for Offer Shares in the Rights Issue before the expiry of the Subscription

Period on 29 July 2014 at 16:30 hours (CET) or be sold before 24 July 2014 at 16:30 hours (CET). Acquired Subscription

Rights will give the same right to subscribe for and be allocated Offer Shares as Subscription Rights held by Existing

Shareholders on the basis of their registered shareholdings on the Record Date.

The Subscription Rights, including acquired Subscription Rights, must be used to subscribe for Offer Shares before

the end of the Subscription Period (i.e., 29 July 2014 at 16:30 hours (CET)) or sold before 24 July 2014 at 16:30

hours (CET). Subscription Rights that are not sold before 24 July 2014 at 16:30 hours (CET) or exercised before 29

July 2014 at 16:30 hours (CET) will have no value and will lapse without compensation to the holder. Holders of

Subscription Rights (whether granted or acquired) should note that subscriptions for Offer Shares must be made in

accordance with the procedures set out in this Prospectus and that the acquisition of Subscription Rights does not in

itself constitute a subscription for Offer Shares.

Subscription Rights of Existing Shareholders resident in jurisdictions where the Prospectus may not be distributed and/or

with legislation that, according to the Company’s assessment, prohibits or otherwise restricts subscription for

Offer Shares (the “Ineligible Shareholders”) will initially be credited to such Ineligible Shareholders’ VPS accounts. Such

credit specifically does not constitute an offer to Ineligible Shareholders. The Company will instruct the Joint

Bookrunners to, as far as possible, withdraw the Subscription Rights from such Ineligible Shareholders’ VPS accounts, and

sell them from and including 22 July 2014 to 24 July 2014 at 16:30 hours (CET) for the account and risk of such Ineligible

Shareholders, unless the relevant Subscription Rights are held through a financial intermediary (in which case no action

will be taken to sell such Subscription Rights). Please refer to Section 20.11 “—Financial Intermediaries” for a description

of the procedures applicable to Subscription Rights held by Ineligible Shareholders through financial intermediaries.

The Joint Bookrunners will use commercially reasonable efforts to procure that the Subscription Rights withdrawn from

the VPS accounts of Ineligible Shareholders (and that are not held through financial intermediaries) are sold on behalf of,

and for the benefit of, such Ineligible Shareholders during said period, provided that (i) the Joint Bookrunners are able to

sell the Subscription Rights at a price at least equal to the anticipated costs related to the sale of such Subscription

Rights, and (ii) the relevant Ineligible Shareholder has not by 16:30 hours (CET) on 21 July 2014 documented to the

Company through the Joint Bookrunners a right to receive the Subscription Rights withdrawn from its VPS account, in

which case the Joint Bookrunners shall re-credit the withdrawn Subscription Rights to the VPS account of the relevant

Ineligible Shareholder. The proceeds from the sale of the Subscription Rights (if any), after deduction of customary sales

expenses, will be credited to the Ineligible Shareholder’s bank account registered in the VPS for payment of dividends. If

an Ineligible Shareholder does not have a bank account registered in the VPS, the Ineligible Shareholder must contact the

Joint Bookrunners to claim the proceeds. There can be no assurance that the Joint Bookrunners will be able to withdraw

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and/or sell the Subscription Rights at a profit or at all. Other than as explicitly stated above, neither the Company nor

the Joint Bookrunners will conduct any sale of Subscription Rights not utilised before the end of the Subscription Period.

20.8 Trading in Subscription Rights

The Subscription Rights will be fully tradable and listed on the Oslo Stock Exchange with ticker code “DETNOR T” from

09:00 hours (CET) on 15 July 2014 until 16:30 hours (CET) on 24 July 2014.

The Subscription Rights will hence only be tradable during part of the Subscription Period.

Persons intending to trade in Subscription Rights should be aware that the trading in, and exercise of, Subscription Rights

by holders who are located in jurisdictions outside Norway may be restricted or prohibited by applicable securities laws.

Please refer to Section 21 “Selling and Transfer Restrictions” for a description of such restrictions and prohibitions.

20.9 Subscription Offices; Subscription Procedures

Subscriptions for Offer Shares must be made by submitting a correctly completed subscription form as set out in

Appendix D to one of the subscription offices during the Subscription Period or, for subscribers who are residents of

Norway with a Norwegian personal identification number (Nw. personnummer), made online as further described below.

Correctly completed subscription forms must be received by one of the subscription offices set out below, or, in the case

of online subscriptions, be registered by no later than 16:30 p.m. CET on 29 July 2014:

DNB Markets

Dronning Eufemias gate 30

P.O. Box 1600 Sentrum

N-0021 Oslo

Norway

Tel.: +47 23 26 81 01

Email: [email protected]

www.dnb.no/emisjoner

Skandinaviska Enskilda Banken

Filipstad Brygge 1

P.O. Box 1843 Vika

N-0123 Oslo

Norway

Tel: +47 22 82 70 00

www.seb.no

Nordea Markets

Middelthuns gate 17


N-0107 Oslo

Norway

Tel: +47 22 48 50 00

Fax: +47 22 48 63 49

www.nordea.no/detnor

Subscribers who are residents of Norway with a Norwegian personal identification number (Nw. personnummer) are

encouraged to subscribe for Offer Shares through the VPS online subscription system by following the link on the

following internet pages: www.dnb.no/emisjoner; http://seb.no; and www.nordea.no/detnor (which will redirect the

subscriber to the VPS online subscription system).

Neither the Company nor any of the Joint Bookrunners may be held responsible for postal delays, unavailable fax lines,

internet lines or servers or other logistical or technical problems that may result in subscriptions not being received in

time or at all by the relevant subscription office. Subscription forms received after the end of the Subscription Period

and/or incomplete or incorrect subscription forms and any subscription that may be unlawful may be disregarded at the

sole discretion of the Company and/or the Joint Bookrunners without notice to the subscriber.

Subscriptions are binding and irrevocable, and cannot be withdrawn, cancelled or modified by the subscriber after having

been received by the relevant subscription office, or in the case of applications through the VPS online subscription

system, upon registration of the subscription. The subscriber is responsible for the correctness of the information entered

on the subscription form, or in the case of applications through the VPS online subscription system, the online

subscription registration. By signing and submitting a subscription form, or by registration of a subscription with the VPS

online subscription system, the subscribers confirm and warrant that they have read this Prospectus and are eligible to

subscribe for Offer Shares under the terms set forth herein.

There is no minimum or maximum subscription amount for subscriptions in the Rights Issue. Oversubscription (i.e.

subscription for more Offer Shares than the number of Subscription Rights held by the subscriber entitles the subscriber

to be allocated) and subscription without Subscription Rights is permitted. However, in each case, there can be no

assurance that Offer Shares will be allocated for such subscriptions.

Multiple subscriptions (i.e., subscriptions on more than one subscription form) are allowed. Please note, however, that

two separate subscription forms submitted by the same subscriber with the same number of Offer Shares subscribed for

on both subscription forms will only be counted once unless otherwise explicitly stated in one of the subscription forms.

In the case of multiple subscriptions through the VPS online subscription system or subscriptions made both on a

subscription form and through the VPS online subscription system, all subscriptions will be counted.

http://www.dnb.no/emisjoner

http://seb.no/

http://www.nordea.no/detnor

153

All subscriptions in the Rights Issue will be treated in the same manner regardless of which subscription office the

subscribed chooses to use, and regardless of whether the subscription is made by delivery of a subscription form to a

subscription office or through the VPS online subscription system.

20.10 Mandatory Anti-Money Laundering Procedures

The Rights Issue is subject to the Norwegian Money Laundering Act No. 11 of 6 March 2009 and the Norwegian Money

Laundering Regulations No. 302 of 13 March 2009 (collectively the “Anti-Money Laundering Legislation”). Subscribers

who are not registered as existing customers of the relevant Joint Bookrunner must verify their identity to that Joint

Bookrunner in accordance with requirements of the Anti-Money Laundering Legislation, unless an exemption is applicable.

Subscribers who have designated an existing Norwegian bank account and an existing VPS account on the subscription

form are exempted, unless verification of identity is requested by the relevant Joint Bookrunner. Subscribers who have

not completed the required verification of identity prior to the expiry of the Subscription Period will not be allocated

Offer Shares. Further, participation in the Rights Issue is conditional upon the subscriber holding a VPS account. The VPS

account number must be stated in the subscription form. VPS accounts can be established with authorised VPS registrars,

who can be Norwegian banks, authorised securities brokers in Norway and Norwegian branches of credit institutions

established within the EEA. However, non-Norwegian investors may use nominee VPS accounts registered in the name of a

nominee. The nominee must be authorised by the Norwegian Financial Supervisory Authority (Nw. Finanstilsynet).

Establishment of a VPS account requires verification of identification to the VPS registrar in accordance with the Anti-

Money Laundering Legislation.

20.11 Financial Intermediaries

General

Persons or entities holding Shares in the Company through financial intermediaries (i.e., brokers, custodians and

nominees) should read this Section. All questions concerning the timeliness, validity and form of instructions to a

financial intermediary in relation to the exercise, sale or purchase of Subscription Rights should be determined by the

financial intermediary in accordance with its usual customer relations procedure or as it otherwise notifies each

beneficial shareholder. The Company is not liable for any action or failure to act by a financial intermediary through

which Shares are held.

Subscription Rights

If an Existing Shareholder holds Shares registered through a financial intermediary as of expiry of the Record Date, the

financial intermediary will customarily give the Existing Shareholder details the aggregate number of the Subscription

Rights to which it will be entitled. The relevant financial intermediary will customarily supply each Existing Shareholder

with this information in accordance with its usual customer relations procedures. Existing Shareholders holding their

Shares through a financial intermediary should contact the financial intermediary if they have received no information

with respect to the Rights Issue.

Existing Shareholders who hold their Shares through a financial intermediary and who are ineligible for participation in

the Rights Issue due to the selling restrictions set forth in Section 20.16 “Terms of the Rights Issue—Selling and Transfer

Restrictions”, will not be entitled to be allocated Offer Shares in the Rights Issue.

Subscription Period and Period for Trading in Subscription Rights

The time by which notification of instructions for subscription of Offer Shares must validly be given to a financial

intermediary may be earlier than the expiry of the Subscription Period. The same applies for instructions pertaining to

trading in Subscription Rights and the last day of trading of such rights (which accordingly will be a deadline earlier than

24 July 2014 at 16:30 (CET)). Such deadline will depend on the financial intermediary. Existing Shareholders who hold

their shares through a financial intermediary should contact their financial intermediary if they are in any doubt with

respect to such deadlines.

Subscription

Existing Shareholders who are not ineligible for participation in the Rights Issue and who hold their Subscription Rights

through a financial intermediary and wishes to exercise their Subscription Rights, should instruct their financial

intermediary in accordance with the instructions received from such financial intermediary. The financial intermediary

will be responsible for collecting exercise instructions from the shareholders and for informing the Joint Bookrunners of

their subscription instructions.

A person or entity who has acquired Subscription Rights that are held through a financial intermediary should contact the

relevant financial intermediary for instructions on how to exercise the Subscription Rights.

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Method of Payment

Existing Shareholders who hold their Subscription Rights through a financial intermediary should pay the Subscription

Price for the Offer Shares that are allocated to them in accordance with the instructions received from the financial

intermediary. The financial intermediary must pay the Subscription Price in accordance with the instructions in this

Prospectus. Payment by the financial intermediary for the Offer Shares must be made to the relevant Joint Bookrunner no

later than the Payment Date. Accordingly financial intermediaries may require payment to be provided to them prior to

the Payment Date.

20.12 Allocation of Offer Shares

Allocation of the Offer Shares will take place on or about 30 July 2014 in accordance with the following criteria:

(i) Allocation will be made in accordance with granted or acquired Subscription Rights which have been validly

exercised during the Subscription Period.

(ii) If not all Subscription Rights are fully utilised, subscribers having exercised their Subscription Rights and who

have over-subscribed will be allocated additional Offer Shares on a pro rata basis based on the number of

Subscription Rights exercised by each subscriber. To the extent that pro rata allocation is not possible, the

Company will determine the allocation by drawing of lots.

(iii) Offer Shares not allocated pursuant to the allocation criteria in items (i) and (ii) above, will be allocated to

subscribers not holding Subscription Rights. Allocation will be sought made on a pro rata basis based on the

relevant subscription amounts, provided, however, that such allocations may be rounded down to the nearest

10 Offer Shares.

(iv) Any Offer Shares remaining after allocation pursuant to the allocation criteria in items (i), (ii) and (iii) above,

will be subscribed by, and allocated to, the Underwriters based on, and in accordance with, the underwriting

obligation of the respective Underwriters.

No fractional Offer Shares will be allocated. The Company reserves the right to round off, reject or reduce any

subscription for Offer Shares not covered by Subscription Rights.

Allocation of fewer Offer Shares than subscribed for by a subscriber will not impact on the subscriber’s obligation to pay

for the number of Offer Shares allocated.

The result of the Rights Issue is expected to be published on or about 30 July 2014 in the form of a stock exchange

notification from the Company through the Oslo Stock Exchange information system and at the Company’s website

(www.detnor.com). Notifications of allocated Offer Shares and the corresponding subscription amount to be paid by each

subscriber are expected to be distributed in a letter from the VPS on or about 30 July 2014. Subscribers having access to

investor services through their VPS account manager will be able to check the number of Offer Shares allocated to them

from 12:00 hours (CET) on 31 July 2014. Subscribers who do not have access to investor services through their VPS

account manager may contact one of the Joint Bookrunners from 12:00 hours (CET) on 30 July 2014 to get information

about the number of Offer Shares allocated to them.

20.13 Payment

Payment Date

The payment for the Offer Shares allocated to a subscriber falls due on 4 August 2014.

Subscribers who have a Norwegian Bank Account

Subscribers who have a Norwegian bank account must, and will by signing the subscription form, or registering a

subscription through the VPS online subscription system, provide the DNB Markets, or someone appointed by them, with a

one-time irrevocable authorisation to debit a specified bank account with a Norwegian bank for the amount payable for

the Offer Shares which are allocated to the subscriber. The specified bank account is expected to be debited on or after

the Payment Date. DNB Markets, or someone appointed by them, are only authorised to debit such account once, but

reserves the right to make up to three debit attempts and the authorisation will be valid for up to seven working days

after the Payment Date. The subscriber furthermore authorises DNB Markets, or someone appointed by them, to obtain

confirmation from the subscriber's bank that the subscriber has the right to dispose over the specified account and that

there are sufficient funds in the account to cover the payment. If there are insufficient funds in a subscriber's bank

account or if it for other reasons is impossible to debit such bank account when a debit attempt is made pursuant to the

authorisation from the subscriber, the subscriber's obligation to pay for the Offer Shares will be deemed overdue.

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Payment by direct debiting is a service that banks in Norway provide in cooperation. In the relationship between the

subscriber and the subscriber's bank, the standard terms and conditions for "Payment by Direct Debiting – Securities

Trading", which are set out on page 2 of the subscription form, will apply, provided, however, that subscribers who

subscribe for an amount exceeding NOK 5 million by signing the subscription form, or registering a subscription through

the VPS online subscription system, provide the Joint Bookrunners, or someone appointed by them, with a one-time

irrevocable authorisation to directly debit the specified bank account for the entire subscription amount.

Subscribers who do not have a Norwegian Bank Account

Subscribers who do not have a Norwegian bank account must ensure that payment with cleared funds for the Offer Shares

allocated to them is made on or before the Payment Date. Prior to any such payment being made, the subscriber must

contact DNB Markets for further details and instructions.

Overdue Payments

Overdue payments will be charged with interest at the applicable rate from time to time under the Norwegian Act on

Interest on Overdue Payment of 17 December 1976 No. 100, currently 9.5% p.a. If a subscriber fails to comply with the

terms of payment, the Offer Shares will, subject to the restrictions in the Norwegian Public Limited Liability Companies

Act, not be delivered to the subscriber.

Pursuant to a payment guarantee agreement between the Company on the one hand and the Underwriters on the other

hand, the Underwriters will, subject to the terms and conditions of the payment guarantee and up to the respective

amounts underwritten by them, on 5 August 2014 pay any subscription amounts not paid by subscribers when due, in

order to enable timely registration of the share capital increase pertaining to the Offer Shares in the Norwegian Register

of Business Enterprises. The payment guarantee by the Underwriters does, however, not cover the payment obligations of

Aker Capital AS pursuant to its subscription undertaking and the other Underwriters (for any unsubscribed Offer Shares

allocated to them). The non-paying subscribers will remain fully liable for the subscription amount payable for the Offer

Shares allocated to them, irrespective of such payment by the Underwriters. The Offer Shares allocated to such

subscribers will be transferred to a VPS account operated by DNB Markets on behalf of the Underwriters and will be

transferred to the non-paying subscriber when payment of the subscription amount for the relevant Offer Shares is

received. However, the Underwriters reserve the right to sell or assume ownership of the Offer Shares from and including

the fourth day after the Payment Date without further notice to the subscriber in question in accordance with section 10-

12 (4) of the Norwegian Public Limited Liability Companies Act if payment has not been received within the third day

after the Payment Date. If the Offer Shares are sold on behalf of the subscriber, the subscriber will be liable for any loss,

costs, charges and expenses suffered or incurred by the Company and/or the Underwriters as a result of or in connection

with such sales. The Company and/or the Underwriters may enforce payment for any amount outstanding in accordance

with Norwegian law. The obligation of the Underwriters pursuant to the payment guarantee is subject to the satisfaction

or waiver of certain conditions set out in the payment guarantee agreement, including without limitation the satisfaction

or waiver of the conditions for the Underwriters’ obligations pursuant to the Underwriting Agreement on or prior to the

Payment Date and the payment by Aker Capital AS of its subscription amount, see Section 20.18 “—The Underwriting”.

The obligations to make any payments under the payment guarantee shall cease to exist if (i) all Offer Shares have been

paid or (ii) the engagement letter between the Company and the Joint Global Coordinators and Joint Bookrunners has

been terminated or (iii) Underwriting Agreement or the subscription commitment in the Rights Issue of Aker Capital AS

has been validly terminated or (iv) for each Underwriter when such Underwriter has made the payments required to be

paid by it pursuant to the payment guarantee or (v) the Rights Issue has not been completed within 15 October 2014.

Each of the Underwriters may syndicate all or parts of its guarantee obligation to one or several sub-guarantors, provided

that such syndication does not affect the obligations of the Underwriters towards the Company pursuant to the payment

guarantee.

20.14 Delivery; VPS Registration; Admission to Trading

Subject to full payment of the total proceeds from the Rights Issue being received, the Company expects that the share

capital increase pertaining to the Rights Issue will be registered with the Norwegian Register of Business Enterprises on or

about 5 August 2014 and that the Offer Shares will be delivered to the VPS accounts of the subscribers to whom they are

allocated on or about 6 August 2014. The final deadline for registration of the share capital increase pertaining to the

Rights Issue in the Norwegian Register of Business Enterprises, and hence for the subsequent delivery of the Offer Shares,

is, pursuant to the Norwegian Public Limited Liability Companies Act, three months from the expiry of the Subscription

Period (i.e. 29 October 2014).

The Offer Shares will be registered in the VPS under ISIN NO 0010345853. Trading in the Offer Shares on the Oslo Stock

Exchange is expected to commence under the trading symbol "DETNOR" from on or about 6 August 2014. The Offer Shares

may not be transferred or traded before they are fully paid and said registrations in the Norwegian Register of Business

Enterprises and the VPS have taken place.

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The Subscription Rights will be registered in the VPS under ISIN NO 0010714892 and be listed and tradable on the Oslo

Stock Exchange under the ticker code “DETNOR T” from 09:00 hours (CET) on 15 July 2014 to 16:30 hours (CET) on 24 July

2014.

The Company’s registrar with the VPS is DNB Bank ASA, Registrars Department, Dronning Eufemias gate 30, 0191 Oslo,

Norway.

20.15 Rights Conferred by the Shares

The Offer Shares issued through the Rights Issue will be ordinary Shares in the Company having a par value of NOK 1.00

each and will be registered with the VPS in book-entry form. The Offer Shares will rank pari passu in all respects with the

existing Shares of the Company and will carry full shareholder rights in the Company from the time of registration of the

share capital increase pertaining to the Rights Issue with the Norwegian Register of Business Enterprises; and be issued

pursuant to the Norwegian Public Limited Liability Companies Act. The Offer Shares will be eligible for any dividends

which the Company may declare after said registration. All Shares, including the Offer Shares, will have voting rights and

other rights and obligations which are standard under the Norwegian Public Limited Companies Act, and be governed by

Norwegian law. For a further discussion of the rights attaching to the Shares of the Company, see Section 18 "Corporate

Information; Shares and Share Capital".

20.16 Selling and Transfer Restrictions

This Rights Issue is, and the Offer Shares are, subject to the selling and transfer restrictions set forth in Section 21

"Selling and Transfer Restrictions".

20.17 Participation of Aker Capital AS and Members of the Senior Management and the Board of

Directors in the Rights Issue

Aker Capital AS a wholly-owned subsidiary of Aker ASA and the Company’s largest Shareholder has pre-committed to

subscribe such number of Offer Shares as is necessary to maintain its share ownership prior to the Rights Issue (49.99%).

Except for this, the Company is not aware of whether any major Shareholders of the Company or members of the

Company’s Management, supervisory or administrative bodies intend to subscribe for Offer Shares in the Rights Issue, or

whether any person intends to subscribe for more than 5% of the Rights Issue.

Aker Capital has undertaken not to sell or otherwise transfer any of its Shares (including the Offer Shares and other

Shares that it may acquire) prior to completion of the Rights Issue and for a period of three months thereafter, without

the prior written consent from at least two of the Underwriters.

20.18 The Underwriting

The Company and the Underwriters have entered into the Underwriting Agreement dated 1 June 2014, as amended by a

pricing supplement dated 9 July 2014, pursuant to which the Underwriters have undertaken, severally and not jointly, to

underwrite an aggregate amount of NOK 1,501,639,491.50 in the Rights Issue. Subject to the terms and conditions of the

Underwriting Agreement, the Underwriters have, on a pro rata basis and limited to their respective underwritten amounts

as set out in the table below, undertaken to subscribe and pay for the Offer Shares (less the Offer Shares to be subscribed

for by Aker Capital) not subscribed for during the Subscription Period on or prior to the Payment Date. The table below

shows the subscription amount each Underwriter has undertaken to underwrite:

Name Address

Underwritten

Amount

%

(approx.)

BNP PARIBAS 16, boulevard des Italiens

75009 Paris, France NOK 375,409,885 25%

DNB Markets Dronning Eufemias gate 30,


0191 Oslo, Norway NOK 375,409,836.50 25%

J.P. Morgan Securities plc. 25 Bank Street

London, E14 5JP, United Kingdom NOK 375,409,885 25%

Nordea Markets Middelthuns gate 17


0107 Oslo, Norway

NOK 375,409,885 25%

The 30,949,600 Offer Shares (approximately 49.99%) in the Rights Issue for which Aker Capital AS has committed to

subscribe for are not underwritten.

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The Underwriters’ obligations to subscribe and pay for the Offer Shares allocated to them in accordance with the

Underwriting Agreement is conditional upon (i) Aker Capital having subscribed for at least 49.99% of the Rights Issue

before the expiry of the Subscription Period, and (ii) certain other customary conditions. These conditions include, but

are not limited to: (i) no change, event, effect, or condition having occurred that has or would have, individually or in

the aggregate, an effect on the current or future business, assets, liabilities, liquidity, solvency or funding position or

condition (financial or otherwise) or results of the Company and its subsidiary taken as a whole, or of Marathon Norway

and its subsidiary, which in the good faith opinion of the Underwriters is so material and adverse as to make it inadvisable

to proceed with the Rights Issue or the delivery of the Offer Shares on the terms and in the manner contemplated in this

Prospectus; and (ii) certain closing deliverables to be provided by the Company and certain third parties as further set

out in the Underwriting Agreement.

The Underwriters representing a majority of the total underwriting commitment pursuant to the Underwriting Agreement

may terminate the Underwriting Agreement, on behalf of themselves and the other Underwriters, at any time prior to the

date and time on which the registration of the share capital increase in connection with the issuance of the Offer Shares

takes place in the Norwegian Register of Business Enterprises in the event of (a) the Company being in material breach of

the Underwriting Agreement; or (b) there being information contained in the Prospectus and/or in any other publication

or announcement issued or to be issued by the Company on or after the date of the Underwriting Agreement, which in the

good faith opinion of the relevant Underwriters is sufficiently material in the context of the Rights Issue or the

underwriting of the Offer Shares to make it inadvisable to proceed with the Rights Issue or the underwriting of the Offer

Shares; or (c) a “force majeure” event having occurred, which term shall include but not be limited to (i) any withdrawal

of admission to listing of the Offer Shares or any suspension of, or limitation on prices for, trading in the Shares on the

Oslo Stock Exchange (if such withdrawal, suspension or limitation occurs on, is continuing after or occurs after the date of

the Underwriting Agreement), or in equity securities generally on the Oslo Stock Exchange or on, the London Stock

Exchange or the New York Stock Exchange; (ii) any declaration of a banking moratorium or suspension of payments in

respect of banks generally in Norway, the United Kingdom, or the state of New York or with respect to the European

Central Bank; (iii) any change or developments involving a prospective change in the international financial markets, or in

the financial markets of, or in financial, political, monetary or economic conditions in, Norway, the United Kingdom or

the United States, or any outbreak or escalation of hostilities or any other calamity or crisis; (iv) any material change in

currency exchange rates or foreign exchange controls, or a disruption of settlement systems or commercial banking in

Norway, the United Kingdom or the United States; or (v) there having occurred a change or development involving a

change in taxation affecting the Company, the Offer Shares or the transfer thereof, provided that the effect of any of the

events described in (i) to (v), in the good faith opinion of the Underwriters is so material that it is inadvisable to proceed

with the Rights Issue or the underwriting of the Offer Shares or materially and adversely are considered to affect dealings

in the Offer Shares.

If any or all of the conditions for the underwriting obligations of the Underwriters are not met or waived by 24:00 hours

(CET) on 15 October 2014, the obligations of the respective Underwriters will expire. In such event, the Rights Issue will

be withdrawn unless it is fully subscribed. See Section 20.3 “—Conditions for Completion of the Rights Issue” above for a

description of the consequences of a withdrawal of the Rights Issue.

Pursuant to the Underwriting Agreement, the Company has undertaken not to issue any Shares other than the Offer

Shares issued in the Rights Issue for a period of four months from the Payment Date without the prior written consent of

the Underwriters (other than as consideration for options, subscription rights and similar rights already issued at the date

of the Underwriting Agreement, or as part of incentive schemes for key employees).

Pursuant to the Underwriting Agreement, each Underwriter will upon completion of the Rights Issue receive an

underwriting fee of 1% of the amount underwritten by it.

20.19 Interests of Natural and Legal Persons in the Rights Issue

The Joint Bookrunners or their affiliates have provided from time to time, and may provide in the future, investment and

commercial banking services to the Company and its affiliates in the ordinary course of business, for which they may have

received and may continue to receive customary fees and commissions. The Joint Bookrunners do not intend to disclose

the extent of any such investments or transactions otherwise than in accordance with any legal or regulatory obligation to

do so. Further, a portion of the commissions that are to be paid for the services of the Joint Bookrunners in respect of the

Rights Issue are calculated on the basis of the gross proceeds of the Rights Issue.

Other than as set out above, the Company is not aware of any interest of any natural and legal persons involved in the

Rights Issue that is material to the Rights Issue.

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20.20 Governing Law and Jurisdiction

The terms and conditions of the Rights Issue as set out in this Prospectus shall be governed by and construed in

accordance with Norwegian law. The courts of Norway, with Oslo as legal venue, shall have exclusive jurisdiction to settle

any dispute which may arise out of or in connection with the Rights Issue or this Prospectus.

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21. SELLING AND TRANSFER RESTRICTIONS

This Prospectus does not constitute an offer or grant of, or an invitation to purchase any of, the Subscription Rights or

the Offer Shares in any jurisdiction in which such offer or sale would be unlawful. No one has taken any action that

would permit a public offering of Subscription Rights or Offer Shares to occur outside of Norway. Accordingly, neither

this Prospectus nor any advertisement or any other offering material may be distributed or published in any jurisdiction

except under circumstances that will result in compliance with any applicable laws and regulations. The Company and

the Joint Bookrunners require persons in possession of this Prospectus to inform themselves about and to observe any

such restrictions. The Subscription Rights and Offer Shares are subject to restrictions on transferability and resale and

may not be transferred or resold except as permitted under applicable securities laws and regulations. Investors should

be aware that they may be required to bear the financial risks of this investment for an indefinite period of time. Any

failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

21.1 General

The grant of Subscription Rights and issue of Offer Shares upon exercise of Subscription Rights and the offer of

unsubscribed Offer Shares to persons resident in, or who are citizens of countries other than Norway, may be affected by

the laws of the relevant jurisdiction. Investors should consult their professional advisors as to whether they require any

governmental or other consents or need to observe any other formalities to enable them to exercise Subscription Rights

or purchase Offer Shares.

The Subscription Rights and Offer Shares being granted and offered, respectively, in the Rights Issue have not been and

will not be registered under the U.S. Securities Act or with any securities regulatory authority of any state or other

jurisdiction of the United States, and may not and will not be offered, sold, exercised, pledged, resold, granted,

delivered, allocated, taken up, transferred or delivered, directly or indirectly, within the United States except pursuant

to an exemption from, or in a transaction not subject to, the registration requirements under the U.S. Securities Act and

in compliance with the applicable securities laws of any state or jurisdiction of the United States. Receipt of this

Prospectus will not constitute an offer in those jurisdictions in which it would be illegal to make an offer and, in those

circumstances, this Prospectus is for information only and should not be copied or redistributed. Except as otherwise

disclosed in this Prospectus, if an investor receives a copy of this Prospectus in any territory other than Norway, such

investor may not treat this Prospectus as constituting an invitation or offer to it, or a grant of, nor should the investor in

any event deal in Subscription Rights or Offer Shares (as the case may be), unless, in the relevant jurisdiction, such an

invitation, offer or grant could lawfully be made to that investor, or the Subscription Rights or Offer Shares, as

applicable, could lawfully be dealt in without contravention of any unfulfilled registration or other legal requirements.

Accordingly, if an investor receives a copy of this Prospectus, the investor should not distribute or send the same, or

transfer the Subscription Rights or Offer Shares to any person or in or into any jurisdiction where to do so would or might

contravene local securities laws or regulations. If the investor forwards this Prospectus into any such territories (whether

under a contractual or legal obligation or otherwise), the investor should direct the recipient's attention to the contents

of this Section 21.

Except as otherwise noted in this Prospectus and subject to certain exceptions: (i) the Subscription Rights and Offer

Shares being granted and offered, respectively, in the Rights Issue may not be offered, sold, resold, transferred or

delivered, directly or indirectly, in or into, any jurisdiction in which it would not be permissible to grant the Subscription

Rights or offer the Offer Shares, as applicable; (ii) this Prospectus may not be sent to any person in any jurisdiction in

which it would not be permissible to offer the Offer Shares; and (iii) the crediting of Subscription Rights to an account of

an holder or other person who is a resident of any jurisdiction in which it would not be permissible to offer the Offer

Shares does not constitute an offer to such persons of the Offer Shares. Holders of Subscription Rights who are resident in

any jurisdiction in which it would not be permissible to offer the Offer Shares may not exercise Subscription Rights.

If an investor exercises Subscription Rights to subscribe for Offer Shares, or purchases Offer Shares, either from the

Company directly or from the Underwriters, unless the Company in its sole discretion determines otherwise on a case-by-

case basis, that investor will be deemed to have made or, in some cases, be required to make, the following

representations and warranties to the Company and any person acting on the Company's or its behalf:

(a) the investor is not located or residing in a jurisdiction in which it would not be permissible to offer the Offer

Shares;

(b) the investor is not a person to which the Rights Issue cannot be unlawfully made;

(c) the investor is not acting, and has not acted, for the account or benefit of an a person to which the Rights Issue

cannot be unlawfully made;

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(d) the investor is either a “qualified institutional buyer” as defined in Rule 144A under the U.S. Securities Act (a

“QIB”), or acquiring the Offer Shares in an “offshore transaction” outside the United States within the meaning

of, and pursuant to, Regulation S;

(e) the investor understands that the Subscription Rights and the Offer Shares have not been and will not be

registered under the U.S. Securities Act and may not be offered, sold, pledged, resold, granted, delivered,

allocated, taken up or otherwise transferred within the United States except pursuant to an exemption from,

or in a transaction not subject to, registration under the U.S. Securities Act;

(f) the investor acknowledges that the Company is not taking any action to permit a public offering of the Offer

Shares (pursuant to the exercise of the Subscription Rights or otherwise) in any jurisdiction other than Norway;

and

(g) the investor may lawfully be offered, take up, subscribe for and receive Subscription Rights and Offer Shares in

the jurisdiction in which it resides or is currently located.

The Company, the Joint Bookrunners and their affiliates and others will rely upon the truth and accuracy of the above

acknowledgements, agreements and representations, and agree that, if any of the acknowledgements, agreements or

representations deemed to have been made by its purchase of Offer Shares is no longer accurate, it will promptly notify

the Company and the Joint Bookrunners. Any provision of false information or subsequent breach of these representations

and warranties may subject the investor to liability.

If a person is acting on behalf of a holder of Subscription Rights (including, without limitation, as a nominee, custodian or

trustee), that person will be required to provide the foregoing representations and warranties to the Company with

respect to the exercise of Subscription Rights on behalf of the holder. If such person cannot or is unable to provide the

foregoing representations and warranties, the Company will not be bound to authorize the allocation of any of the

Subscription Rights and Offer Shares to that person or the person on whose behalf the other is acting. Subject to the

specific restrictions described below, if an investor (including, without limitation, its nominees and trustees) is located

outside Norway and wishes to exercise or otherwise deal in or subscribe for Offer Shares, the investor must satisfy itself

as to full observance of the applicable laws of any relevant territory including obtaining any requisite governmental or

other consents, observing any other requisite formalities and paying any issue, transfer or other taxes due in such

territories.

The information set out in this Section 21 is intended as a general guide only. If the investor is in any doubt as to whether

it is eligible to exercise its Subscription Rights and subscribe for the Offer Shares, such investor should consult its

professional advisor without delay.

The Company reserves the right to reject any exercise (or revocation of such exercise) in the name of any person who

provides an address in a jurisdiction in which the Rights Issue cannot be lawfully made, or who is unable to represent or

warrant that such person is not located or residing in such jurisdiction. Furthermore, the Company reserves the right,

with sole and absolute discretion, to treat as invalid any exercise or purported exercise of Subscription Rights which

appears to have been executed, effected or dispatched in a manner that may involve a breach or violation of the laws or

regulations of any jurisdiction.

Notwithstanding any other provision of this Prospectus, the Company reserves the right to permit a holder to exercise its

Subscription Rights if the Company, in its absolute discretion, is satisfied that the transaction in question is exempt from

or not subject to the laws or regulations giving rise to the restrictions in question. Applicable exemptions in certain

jurisdictions are described further below. In any such case, the Company does not accept any liability for any actions that

a holder takes or for any consequences that it may suffer as a result of the Company accepting the holder's exercise of

Subscription Rights.

Neither the Company nor the Joint Bookrunners, nor any of their respective representatives, is making any representation

to any offeree, subscriber or purchaser of Offer Shares regarding the legality of an investment in the Offer Shares by such

offeree, subscriber or purchaser under the laws applicable to such offeree, subscriber or purchaser. Each investor should

consult its own advisors before subscribing for Offer Shares.

A further description of certain restrictions in relation to the Subscription Rights and the Offer Shares in certain

jurisdictions is set out below.

21.2 United States

The Subscription Rights and/or Offer Shares, as applicable, have not been and will not be registered under the U.S.

Securities Act or with any securities regulatory authority of any state or other jurisdiction in the United States and may

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not be offered, sold, pledged or otherwise transferred in or into the United States except pursuant to an exemption from,

or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in compliance with any

applicable state securities laws. The Offer Shares are being offered (i) within the United States only to QIBs, as defined in

Rule 144A of the U.S. Securities Act, pursuant to an exemption from, or in a transaction not subject to, the registration

requirements of the U.S. Securities Act, and (ii) outside the United States in “offshore transactions” as defined in, and in

reliance on, Regulation S under the U.S. Securities Act, in each case, in accordance with any applicable securities laws of

any state or territory of the United States or any other jurisdiction. Prospective purchasers of the Offer Shares are hereby

notified that sellers of the Offer Shares may be relying on the exemption from registration provisions of Section 5 of the

U.S. Securities Act provided by Rule 144A.

Except as set out below under “Sales within the United States” (i) neither this Prospectus nor the crediting of

Subscription Rights to a stock account constitutes or will constitute an offer or an invitation to apply for or an offer or an

invitation to acquire any Offer Shares in the United States, and this Prospectus will not be sent to any Existing

Shareholder with a registered address in the United States and (ii) exercising Subscription Rights or renunciations thereof

sent from or post-marked in the United States will be deemed to be invalid and all persons acquiring Offer Shares and

wishing to hold such Offer Shares in registered form must provide an address for registration of the Offer Shares, issued

upon exercise thereof outside the United States.

Until the expiration of 40 days as from the later of (a) the commencement of the Rights Issue, and (b) the

commencement of any offering by underwriters of new shares underlying unexercised preferential subscription rights,

an offer, sale or transfer of the Offer Shares or preferential subscription rights within the United States by a dealer

(whether or not participating in the Rights Issue) may violate the registration requirements of the U.S. Securities Act if

such offer or sale is made otherwise than in accordance with Rule 144A under the U.S. Securities Act.

In making an investment decision with respect to the Offer Shares, investors must rely on their own examination of the

Company and the terms of the Rights Issue, including the merits and risks involved The Subscription Rights and the Offer

Shares have not been recommended, approved or disapproved by the U.S. Securities and Exchange Commission, any state

securities commission in the United States or any other United States regulatory authority, nor have any of the foregoing

authorities passed upon or endorsed the merits of the offering of the Subscription Rights and the Offer Shares or the

accuracy or adequacy of this document. Any representation to the contrary is a criminal offense in the United States.

Sales within the United States

Notwithstanding the foregoing, the Offer Shares may be offered to and the Subscription Rights may be exercised by or on

behalf of, persons in the United States reasonably believed to be QIBs, in offerings exempt from, or in a transaction not

subject to, the registration requirements of the U.S. Securities Act, provided such persons satisfy the Company that they

are eligible to participate on such basis. Persons in the United States exercising Subscription Rights to acquire Offer

Shares will be required to execute an investor letter in a form acceptable to the Company and the Joint Bookrunners.

Each person exercising Subscription Rights and each purchaser of Offer Shares, either from the Company directly or from

the Underwriters, within the United States pursuant to an exemption from the registration requirements of the U.S.

Securities Act, by accepting delivery of this Prospectus, will be deemed to have represented, warranted, agreed and

acknowledged that:

(a) It is (i) a QIB and (ii) exercising such Subscription Rights or acquiring such Offer Shares for its own account or

for the account of a QIB as to which it has full investment discretion, in each case for investment purposes, and

not with a view to any distribution (within the meaning of the U.S. federal securities laws) of the Shares.

(b) It understands that such Offer Shares are being offered for sale in a transaction not involving any public

offering in the United States and the Subscription Rights and Offer Shares have not been and will not be

registered under the U.S. Securities Act or any U.S. securities laws or with any securities regulatory authority

of any state or other jurisdiction in the United States and may not be offered, sold, pledged or otherwise

transferred except (i)(A) in accordance with Rule 144A to a person that it and any person acting on its behalf

reasonably believe is a QIB purchasing for its own account or for the account of a QIB, (B) in an “offshore

transaction” as defined in and in accordance with Rule 903 or Rule 904 of Regulation S under the U.S.

Securities Act, (C) pursuant to an exemption from registration under the U.S. Securities Act provided by Rule

144 thereunder (if available), (D) pursuant to any other available exemption from registration under the U.S.

Securities Act or (E) pursuant to an effective registration statement under the U.S. Securities Act, and (ii) in

accordance with all applicable federal and state securities laws of the United States.

(c) It understands that such Offer Shares (to the extent they are in certificated form), unless otherwise

determined by the Company in accordance with applicable law, will bear a legend substantially to the

following effect:

162

THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OR WITH ANY

SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY

NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) IN ACCORDANCE WITH RULE

144A UNDER THE U.S. SECURITIES ACT TO A PERSON THAT THE HOLDER AND ANY PERSON ACTING ON ITS

BEHALF REASONABLY BELIEVE IS A QIB WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN

ACCOUNT OR FOR THE ACCOUNT OF A QIB, (2) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903

OR RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM

REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4)

PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OR (5)

PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE U.S. SECURITIES ACT, AND (B) IN

ACCORDANCE WITH ALL APPLICABLE FEDERAL AND STATE SECURITIES LAWS OF THE UNITED STATES. NO

REPRESENTATION CAN BE MADE AS TO THE AVAILABILITY OF THE EXEMPTION PROVIDED BY RULE 144 UNDER THE

U.S. SECURITIES ACT FOR RESALES OF THIS SECURITY. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THE

FOREGOING, THIS SECURITY MAY NOT BE DEPOSITED INTO ANY UNRESTRICTED DEPOSITARY RECEIPT FACILITY IN

RESPECT OF SECURITIES ESTABLISHED OR MAINTAINED BY A DEPOSITARY BANK.

(d) The Company, the Joint Bookrunners, and any selling agents and others will rely upon the truth and accuracy of

the foregoing acknowledgements, representations and agreements. If it is exercising any Subscription Rights or

acquiring any Offer Shares for the account of one or more QIBs, it represents that it has sole investment

discretion with respect to each such account and that it has full power to make the foregoing

acknowledgements, representations and agreements on behalf of each such account.

(e) The Offer Shares have not been offered to it by means of any “general solicitation” or “general advertising” as

such terms are used in Regulation D under the U.S. Securities Act.

(f) The Company shall not recognize any offer, sale, pledge or other transfer of the Offer Shares made other than

in compliance with the above-stated restrictions.

No representation has been, or will be, made by the Company or the Joint Bookrunners as to the availability of Rule 144

under the U.S. Securities Act or any other exemption under the U.S. Securities Act or any state securities laws for the re-

offer, sale, pledge or transfer of the Offer Shares for so long as the Offer Shares are “restricted securities” within the

meaning of Rule 144(a)(3) under the U.S. Securities Act.

Any person in the United States into whose possession this Prospectus comes should inform itself about and observe any

applicable legal restrictions; any such person in the United States who is not a QIB is required to disregard this

Prospectus. A person in the United States who is not a QIB is an Ineligible Shareholder (as defined in Section 20.7).

Subscription Rights granted to an Ineligible Shareholder will be sold in accordance with the procedures set forth in

Section 20.7.

Prospective purchasers are hereby notified that sellers of the Offer Shares may be relying on the exemption from

the provisions of Section 5 of the U.S. Securities Act provided by Rule 144A.

Sales outside the United States

Each person that at the time of exercise of Subscription Rights or purchase of Offer Shares, either from the Company

directly or from the Underwriters, was outside the United States, by accepting delivery of this Prospectus, will be

deemed to have represented, warranted, agreed and acknowledged that:

(a) It (i) is not within the United States; (ii) is not in any jurisdiction in which it is unlawful to make or accept an

offer to acquire the Offer Shares; (iii) is not exercising for the account of any person who is located in the United

States, unless: (A) the instruction to exercise was received from a person outside the United States and (B) the

person giving such instruction has confirmed that (x) it has the authority to give such instruction, and (y) either

(a) has investment discretion over such account or (b) is an investment manager or investment company that is

acquiring the Offer Shares in an “offshore transaction” within the meaning of Regulation S under the U.S.

Securities Act; and (iv) is not acquiring the Offer Shares with a view to the offer, sale, resale, transfer, delivery

or distribution, directly or indirectly, of any such Offer Shares into the United States.

(b) It understands that such Subscription Rights and Offer Shares have not been and will not be registered under the

U.S. Securities Act or any U.S. securities laws or with any securities regulatory authority of any state or other

jurisdiction in the United States and that it will not offer, sell, pledge or otherwise transfer such Subscription

Rights or Offer Shares except (i) in accordance with Rule 144A under the U.S. Securities Act to a person that it

and any person acting on its behalf reasonably believe is a QIB purchasing for its own account or the account of a

QIB or (ii) in an offshore transaction as defined in and in accordance with Rule 903 or Rule 904 of Regulation S

163

under the U.S. Securities Act, in each case in accordance with any applicable securities laws of any State of the

United States.

(c) It understands that such Offer Shares (to the extent they are in certificated form), unless otherwise determined

by the Company in accordance with applicable law, will bear a legend to the following effect:

THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OR WITH ANY

SECURITIES REGULATORY AUTHORITY OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES AND MAY

NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES EXCEPT PURSUANT

TO AN EXEMPTION FROM REGISTRATION UNDER, OR IN A TRANSACTION NOT SUBJECT TO, THE U.S. SECURITIES

ACT.

(d) It is aware of the restrictions on the offer and sale of the Offer Shares pursuant to Regulation S described in this

Prospectus.

(e) The Offer Shares have not been offered to it by means of any “directed selling efforts” as defined in Regulation S.

(f) The Company, the Joint Bookrunners, any selling gents and others will rely upon the truth and accuracy of the

foregoing acknowledgements, representations and agreements.

(g) The Company shall not recognize any offer, sale, pledge or other transfer of the Offer Shares made other than in

compliance with the above restrictions.

The Company is not required to file periodic reports under Section 13 or 15 of the U.S. Securities Exchange Act of 1934,

as amended (the “Exchange Act”). For as long as any of the Offer Shares are “restricted securities” within the meaning of

Rule 144(a)(3) under the U.S. Securities Act, and the Company is neither subject to Section 13 or 15(d) of the Exchange

Act, nor exempt from reporting pursuant to Rule 12g3-2(b) under the Exchange Act, the Company will upon written

request furnish to any holder or beneficial owner of the Offer Shares, or to any prospective purchaser designated by such

holder, the information specified in, and meeting the requirements of, Rule 144A(d)(4) under the U.S. Securities Act.

Nordea Markets is not a broker/dealer registered with the U.S. Securities and Exchange Commission and will only

participate in the transaction outside the United States.

21.3 United Kingdom

Each Joint Bookrunner has represented, warranted and agreed that:

(a) it has only communicated or caused to be communicated and will only communicate or cause to be

communicated any invitation or inducement to engage in investment activity (within the meaning of section 21

of the Financial Services and Markets Act 2000 (the "FSMA")) received by it in connection with the issue or sale of

any Offer Shares in circumstances in which section 21(1) of the FSMA does not apply to the Company; and

(b) it has complied and will comply with all applicable provisions of the FSMA with respect to everything done by it

in relation to the Offer Shares in, from or otherwise involving the United Kingdom.

21.4 European Economic Area

In relation to each Member State of the EEA which has implemented the Prospectus Directive (each, a "Relevant Member

State"), an offer to the public of any Offer Shares may not be made in that Relevant Member State, other than the offers

contemplated by this Prospectus in Norway once this Prospectus has been approved by the Norwegian FSA and published

in accordance with the Prospectus Directive as implemented in Norway, except that an offer to the public of any Offer

Shares in a Relevant Member State may be made at any time under the following exemptions under the Prospectus

Directive, if they have been implemented in the Relevant Member State:

(a) to any legal entity which is a qualified investor as defined in the Prospectus Directive;

(b) to fewer than 100, or if the Relevant Member State has implemented the relevant provision of the 2010 PD

Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus

Directive); or

(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive,

164

Further, each person in a Relevant Member State other than, in the case of paragraph (a) below, persons receiving offers

contemplated in this Prospectus in Norway who receives any communication in respect of, or who acquires any Offer

Shares under, the offer contemplated in this Prospectus will be deemed to have represented, warranted and agreed to

and with the Joint Bookrunners and the Company that:

(a) it is a qualified investor within the meaning of the law in that Relevant Member State implementing Article

2(1)(e) of the Prospectus Directive;

and

(b) in the case of any Offer Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of

the Prospectus Directive, (i) such Shares acquired by it in the offer have not been acquired on behalf of, nor

have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than

qualified investors, as that term is defined in the Prospectus Directive, or in circumstances in which the prior

consent of the Joint Bookrunners has been given to the offer or resale; or (ii) where such Shares have been

acquired by it on behalf of persons in any Relevant Member State other than qualified investors, the offer of

those Shares to it is not treated under the Prospectus Directive as having been made to such persons.

For the purposes of this provision, the expression an "offer" in relation to any of the Offer Shares or Shares in any

Relevant Member States means the communication in any form and by any means of sufficient information on the terms

of the offer and any Offer Shares or Shares to be offered so as to enable an investor to decide to purchase or subscribe

for such Offer Shares or Shares, as the same may be varied in that Relevant Member State by any measure implementing

the Prospectus Directive in that Relevant Member State.

21.5 Switzerland

This Prospectus is not being publicly distributed in Switzerland. Each copy of this Prospectus is addressed to a specifically

named recipient and may not be passed on to third parties. The Subscription Rights or Offer Shares are not being offered

to the public in or from Switzerland, and neither this Prospectus, nor any other offering material in relation to the

Subscription Rights or Offer Shares may be distributed in connection with any such public offering.

21.6 Additional Jurisdictions

The Subscription Rights or Offer Shares may not be offered, sold, exercised, pledged, resold, granted, allocated, taken

up, transferred or delivered, directly or indirectly, in or into, Canada, Japan, Australia, Hong Kong or any other

jurisdiction in which it would not be permissible to offer the Subscription Rights or the Offer Shares.

165

22. NORWEGIAN TAXATION

This Section describes certain tax rules in Norway applicable to shareholders who are resident in Norway for tax

purposes (“Norwegian Shareholders”) and to shareholders who are not resident in Norway for tax purposes (“Foreign

Shareholders”). The statements herein regarding taxation are based on the laws in force in Norway as of the date of

this Prospectus and are subject to any changes in law occurring after such date. Such changes could be made on a

retrospective basis. The following summary does not purport to be a comprehensive description of all the tax

considerations that may be relevant to a decision to purchase, own or dispose of the Shares. Investors are advised to

consult their own tax advisors concerning the overall tax consequences of their ownership of Shares. The statements

only apply to shareholders who are beneficial owners of Shares. Please note that for the purpose of the summary below,

references to Norwegian Shareholders or Foreign Shareholders refers to the tax residency rather than the nationality of

the shareholder.

22.1 Norwegian Shareholders

Taxation of Dividends

Norwegian corporate shareholders (i.e. limited liability companies and similar entities) (“Norwegian Corporate

Shareholders”) are comprised by the Norwegian tax exemption method. Under the exemption, only 3% of the dividend

income on shares in Norwegian limited liability companies shall be taxed as ordinary income (27% flat rate), implying that

such dividends are effectively taxed at a rate of 0.81%.

Dividends distributed to Norwegian individual shareholders (i.e. other shareholders than Norwegian Corporate

Shareholders) (“Norwegian Individual Shareholders”) are taxable as ordinary income (27% flat rate) to the extent the

dividend exceeds a basic tax-free allowance. The tax-free allowance shall be computed for each individual shareholder

on the basis of the cost price of each of the shares multiplied by a risk-free interest rate. The risk-free interest rate will

be calculated every income year and is allocated to the shareholder owing the share on 31 December of the relevant

income year. Any part of the calculated tax-free allowance one year exceeding the dividend distributed on the share

("unused allowance") may be carried forward and set off against future dividends received on (or gains upon realisation

of, see below) the same share. Any unused allowance will also be added to the basis of computation of the tax-free

allowance on the same share the following year.

Taxation of Capital Gains

Sale, redemption or other disposal of shares is considered as a realisation for Norwegian tax purposes.

Capital gains generated by Norwegian Corporate Shareholders through a realisation of shares in Norwegian limited liability

companies are comprised by the Norwegian tax exemption method and therefore tax exempt. Net losses from realisation

of shares and costs incurred in connection with the purchase and realisation of such shares are not tax deductible for

Norwegian Corporate Shareholders.

Norwegian Individual Shareholders are taxable in Norway for capital gains derived from realisation of shares, and have a

corresponding right to deduct losses. This applies irrespective of how long the shares have been owned by the individual

shareholder and irrespective of how many shares that are realised. Gains are taxable as ordinary income in the year of

realisation, and losses can be deducted from ordinary income in the year of realisation. The current tax rate for ordinary

income is 27%. Under current tax rules, gain or loss is calculated per share, as the difference between the consideration

received and the tax value of the share. The tax value of each share is based on the individual shareholder's purchase

price for the share. Costs incurred in connection with the acquisition or realisation of the shares will be deductible in the

year of sale. Any unused tax-free allowance connected to a share may be deducted from a capital gain on the same

share, but may not lead to or increase a deductible loss. Further, unused tax-free allowance related to a share cannot be

set off against gains from realisation of other shares.

If a Norwegian shareholder realises shares acquired at different points in time, the shares that were first acquired will be

deemed as first sold (the "first in first out"-principle) upon calculating taxable gain or loss. Costs incurred in connection

with the purchase and sale of shares may be deducted in the year of sale.

A shareholder who ceases to be tax resident in Norway due to domestic law or tax treaty provisions may become subject

to Norwegian exit taxation of capital gains related to shares in certain circumstances.

Taxation of Subscription Rights

A Norwegian Shareholder’s subscription for shares pursuant to a subscription right is not subject to taxation in Norway.

Costs related to the subscription for the shares will be added to the cost price of the shares.

166

Sale and other transfer of subscription rights are considered a realisation for Norwegian tax purposes. Norwegian

Corporate Shareholders are exempt from tax on capital gains derived from the realisation of subscription rights qualifying

for the Norwegian tax exemption method. Losses upon the realisation and costs incurred in connection with the purchase

and realisation of such subscription rights are not deductible for tax purposes.

For Norwegian Individual Shareholders, a capital gain or loss generated by a realisation of subscription rights is taxable or

tax deductible in Norway. Such capital gain or loss is included in or deducted from the basis for the computation of

ordinary income in the year of disposal. The ordinary income is taxable at a flat rate of 27%.

Net Wealth Tax

The value of shares is taken into account for net wealth tax purposes in Norway. The marginal tax rate is currently 1.0%.

Norwegian limited liability companies and similar entities are exempted from net wealth tax.

Shares listed on the Oslo Stock Exchange are valued at the quoted value at 1 January in the assessment year.

22.2 Non-Resident Shareholders

Taxation of Dividends

Dividends paid from a Norwegian limited liability company to Foreign Shareholders are subject to Norwegian withholding

tax at a rate of 25% unless the recipient qualifies for a reduced rate according to an applicable tax treaty or other

specific regulations. Norway has entered into tax treaties with a number of countries and withholding tax is normally set

at 15% under these treaties. The shareholder's home country may give credit for the Norwegian withholding tax imposed

on the dividend.

Foreign corporate shareholders (i.e. limited liability companies and similar entities) (“Foreign Corporate Shareholders”)

which are genuinely established and carry out genuine economic activities within the EEA are not subject to Norwegian

withholding tax.

Dividends paid to foreign individual shareholders (i.e. other shareholders than Foreign Corporate Shareholders) (“Foreign

Individual Shareholders”) are as the main rule subject to Norwegian withholding tax at a rate of 25%, unless a lower rate

has been agreed in an applicable tax treaty. If the individual shareholder is resident within the EEA, the shareholder may

apply to the tax authorities for a refund of an amount corresponding to the calculated tax-free allowance on each

individual share, see Section 22.1 “—Taxation of Dividends” . However, the deduction for the tax-free allowance does not

apply in the event that the withholding tax rate, pursuant to an applicable tax treaty, leads to a lower taxation on the

dividends than the withholding tax rate of 25% less the tax-free allowance.

In accordance with the present administrative system in Norway, a distributing company will generally deduct withholding

tax at the applicable rate when dividends are paid directly to an eligible Foreign Shareholder, based on information

registered with the VPS. Dividends paid to Foreign Shareholders in respect of nominee registered shares are not eligible

for reduced treaty withholding tax rate at the time of payment unless the nominee, by agreeing to provide certain

information regarding beneficial owner, has obtained approval for reduced treaty withholding tax rate from the Central

Office for Foreign Tax Affairs. The withholding obligation lies with the company distributing the dividends and the

Company assumes this obligation.

Foreign Shareholders should consult their own advisers regarding the availability of treaty benefits in respect of dividend

payments.

Taxation of Capital Gains

Gains from realisation of shares by Foreign Shareholders will not be subject to tax in Norway unless the Foreign

Shareholders are holding the shares in connection with business activities carried out or managed from Norway. Such

taxation may be limited according to an applicable tax treaty or other specific regulations.

Taxation of Subscription Rights

A Foreign Shareholder’s subscription for shares pursuant to a subscription right is not subject to taxation in Norway.

Capital gains derived by the sale or other transfer of subscription rights by Foreign Shareholders are not subject to

taxation in Norway unless the Foreign Shareholder are holding the subscription rights in connection with business

activities carried out or managed from Norway. Such taxation may be limited according to an applicable tax treaty or

other specific regulations.

167

Net Wealth Tax

Foreign Shareholders are not subject to Norwegian net wealth tax with respect to the Shares, unless the shareholder is an

individual, and the shareholding is effectively connected with a business which the shareholder takes part in or carries

out in Norway. Such taxation may be limited according to an applicable tax treaty.

22.3 Transfer Taxes etc.; VAT

No transfer taxes, stamp duty or similar taxes are currently imposed in Norway on purchase, issuance, disposal or

redemption of shares. Further, there is no VAT on transfer of shares.

22.4 Inheritance Tax

There is no Norwegian inheritance or gift tax on transfer of shares from the income year of 2014.

168

23. INCORPORATION BY REFERENCE; DOCUMENTS ON DISPLAY

The Norwegian Securities Trading Act and the Norwegian Securities Trading Regulations, implementing Commission

Regulation (EC) no. 809/2004 implementing Directive 2003/71/EC of the European Parliament and of the Council of 4

November 2003 regarding information contained in prospectuses as well as the format, incorporation by reference and

publication of such prospectuses and dissemination of advertisements, allow the Company to incorporate by reference

information into this Prospectus that has been previously filed with Oslo Børs or the Norwegian Financial Supervisory

Authority in other documents. The Company's consolidated financial statements as of and for the years ended 31

December 2013, 2012 and 2011 and the audit reports in respect of these financial statements, are by this reference

incorporated as a part of this Prospectus. Accordingly, this Prospectus is to be read in conjunction with these

documents.

Cross Reference Table

The information incorporated by reference in this Prospectus should be read in connection with the following cross-

reference table. References in the table to "Annex" and "Items" are references to the disclosure requirements as set forth

in the Norwegian Securities Trading Act cf. the Norwegian Securities Trading Regulations by reference to such Annex (and

Item therein) of Commission Regulation (EC) no. 809/2004.

Minimum

Disclosure

Requirement for

Prospectuses

(Annex I) Reference Document

Page of

Reference

Document

Item

20.1

Audited

historical

financial

information

Annual Report 2013:

http://www.detnor.no/wp-content/uploads/2014/03/Annual-Report-2013.pdf

Annual Report 2012:

http://www.detnor.no/wp-content/uploads/2013/06/Annual_Report_2012_v8.pdf

Annual Report 2011:

http://www.detnor.no/wp-

content/uploads/2013/06/Board_of_directors_annual_report_and_financial_statements_2011.pdf

1 — 126

1 — 115

1 — 71

Item

20.3

Audit

opinions

Audit Report 2013:

http://www.detnor.no/wp-content/uploads/2014/03/Annual-Report-2013.pdf

Audit Report 2012:

http://www.detnor.no/wp-content/uploads/2013/06/Annual_Report_2012_v8.pdf

Audit Report 2011:

http://www.detnor.no/wp-

content/uploads/2013/06/Board_of_directors_annual_report_and_financial_statements_2011.pdf

127 — 128

116 — 117

72 — 73

Item

20.6

Interim

financial

information

First Quarter Report 2014:

http://www.detnor.no/wp-content/uploads/2014/04/Report-first-quarter-2014.pdf

First Quarter Report 2013:

http://www.detnor.no/wp-content/uploads/2013/06/ReportQ1.pdf

1 — 24

1 — 24

Documents on Display

For twelve months from the date of this Prospectus, copies of the following documents will be available for inspection at

the Company's registered office during normal business hours from Monday through Friday each week (except public

holidays):

The Articles of Association of the Company.

All reports, letters, and other documents, historical financial information, valuations and statements prepared

by any expert at the Company's request any part of which is included or referred to in the Prospectus.

The Company's financial statements as of and for the years ending 31 December 2013, 2012 and 2011, and the

related auditor reports thereto.

The Company's interim financial statements as of and for the three months ended 31 March 2014 (restated) and

2013.

http://www.detnor.no/wp-content/uploads/2013/06/Board_of_directors_annual_report_and_financial_statements_2011.pdf




http://www.detnor.no/wp-content/uploads/2014/04/Report-first-quarter-2014.pdf

http://www.detnor.no/wp-content/uploads/2013/06/ReportQ1.pdf

169

The financial statements for the Company’s subsidiaries for the two financial years preceding the publication of

this Prospectus.

The financial statements for Marathon Norway as and for the year ended 31 December 2013.

This Prospectus.

170

24. ADDITIONAL INFORMATION

24.1 Independent Auditors

The Company's independent auditors are KPMG AS which has their registered address at Sørkedalsveien 6, 0369 Oslo,

Norway, was elected as the Company’s independent auditors in May 2014. KPMG has not yet issued any audit reports on

the Company’s financial statements.

KPMG AS has performed a review of the Company’s condensed interim financial information as at and for the three month

period ended 31 March 2014 in accordance with the International Standard on Review Engagements 2410 “Review of

Interim Financial Information Performed by the Independent Auditor of the Entity” as stated in their report attached to

this Prospectus as Appendix E. However, as the report states, KPMG did not audit and do not express an audit opinion on

this interim financial information.

KPMG AS is a member of The Norwegian Institute of Public Accountants (Nw. Den Norske Revisorforening).

Ernst & Young AS was the Company’s statutory auditor from 2010 to 2013, and has audited the Company’s financial

statements for 2011, 2012 and 2013 incorporated by reference in this Prospectus. EY’s address is Dronning Eufemias gate

6, Oslo Atrium, P.O. Box 20, 0051 Oslo, Norway. The partners of Ernst & Young AS are members of The Norwegian

Institute of Public Accountants (Nw. Den Norske Revisorforening).

24.2 Joint Bookrunners

BNP PARIBAS, DNB Markets, J.P. Morgan Securities, Nordea Markets and Skandinaviska Enskilda Banken are the Joint

Bookrunners for this Rights Issue.

24.3 Legal Advisors

Advokatfirmaet BA-HR DA is acting as legal adviser (as to Norwegian law) to the Company in connection with the Rights

Issue. Akin Gump Strauss Hauer & Feld is acting as the Company’s U.S. legal counsel.

Advokatfirmaet Thommessen AS is acting as legal adviser (as to Norwegian law) to the Joint Bookrunners in connection

with the Rights Issue. Linklaters is acting as the Joint Bookrunners’ U.S. legal counsel.

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25. DEFINITIONS

Capitalised terms used throughout this Prospectus shall have the meaning ascribed to such terms as set out below,

unless the context require otherwise.

2P ..................................................... Proven plus probable reserves

Acquisition Facility ................................. fully committed and underwritten acquisition loan facility

financing the Transaction

Anti-Money Laundering Legislation ............... The Norwegian Money Laundering Act of 6 March 2009 no. 11

and the Norwegian Money Laundering Regulations of 13

March 2009 no. 302, taken together.

APA ................................................... Awards in predefined areas (relates to licensing rounds on

the NCS)

ARO ................................................... Asset retirement obligations

Bbls ................................................... Barrels

boe .................................................... Barrels of oil equivalent

boepd ................................................. Barrels of oil equivalent per day

CAGR .................................................. Compound annual growth rate

Certain Funds Acquisition Bridge Facility........ The USD 2,200 million short term loan facility agreement

entered into on 1 June 2014.

Companies Act ...................................... Public Limited Liabilities Companies Act of 13 June 1997

no. 44.

Company or Det norske ............................ Det norske oljeselskap ASA

Cut-off Date ......................................... 9 July 2014

E&P ................................................... Exploration and production

Existing Shareholders ............................... Registered holders of the Shares as appearing in the

Company’s register in the VPS as of expiry of 14 July 2014

Forward-looking Statements ...................... Has the meaning ascribed to it in Section 4.1

FPSO .................................................. Floating production storage and offloading vessel

FSAN: ................................................ Financial Supervisory Authority of Norway (Nw.

Finanstilsynet)

GDP ................................................... Gross domestic product

GTA ................................................... (Norwegian) General Tax Act

HSE .................................................... Health, Safety and Environment

IAS..................................................... International Accounting Standards

IEA .................................................... The International Energy Agency

IFRS ................................................... International Financial Reporting Standards as adopted by

the EU

JOA ................................................... Joint operating agreement

Joint Bookrunners ................................... BNP PARIBAS, DNB Markets, J.P. Morgan Securities, Nordea

Markets and Skandinaviska Enskilda Banken

Joint Global Coordinators.......................... BNP PARIBAS, DNB Markets, J.P. Morgan Securities plc.,

Nordea Markets and Skandinaviska Enskilda Banken

LIBOR ................................................. London Interbank Offered Rate

License ............................................... Each and all licenses in which the Company holds a

Participating Interest prior to or following the Rights Issue,

as the case may be

Marathon Norway ................................... Marathon Oil Norge AS

MoF ................................................... Ministry of Finance

MPE ................................................... Ministry of Petroleum and Energy

NCS.................................................... Norwegian continental shelf

NGAAP ................................................ Norwegian Generally Accepted Accounting Principles

NIBOR ................................................. Norwegian Interbank Offered Rate

NOK ................................................... Norwegian Krone

NPD ................................................... Norwegian Petroleum Directorate

OECD .................................................. Economic Co-operation and Development

Offer Shares ......................................... The 61,911,239 new shares of the Company issued in the

Rights Issue

Oslo Stock Exchange ................................ Oslo Børs ASA

p.a. ................................................... per annum

Participating Interest ............................... The participating interest and other rights and benefits

under a given License and/or JOA conferred by that License

172

and/or JOA on the Company, together with all rights and

obligations attaching to the same

PDO ................................................... Plan for Development and Operation

Petroleum Act ....................................... The Norwegian Act 29 November 1996 No. 72 relating to

petroleum activities

PIO .................................................... Plan for Installation and Operation

PL ..................................................... Production License on the NCS

Pollution Act ......................................... The Norwegian Act 13 March 1981 No. 6 relating to pollution

control.

PPA .................................................... Purchase price allocation

PSA .................................................... Petroleum Safety Authority

PTA ................................................... (Norwegian) Petroleum Tax Act

RBL Facility .......................................... The up to USD 3.0 billion long-term reserve-based lending

facility the Company is in the process of finalising

Record Date ......................................... 14 July 2014, the date for determining the list of Existing

Shareholders.

Relevant Member State ............................ Each member state of the EEA which has implemented the

Prospectus Directive

Rights Issue .......................................... The offering of the Offer Shares in the Company with

Subscription Rights for Existing Shareholders

SDFI ................................................... State’s Direct Financial Interest (relates to the Norwegian

state)

Securities Trading Act .............................. The Norwegian Securities Trading Act of 27 June 2007 no. 75.

Senior Management ................................. Any or all members of the Company’s executive management

Shareholder .......................................... Person or legal entity registered in the VPS as owner of an

interest in a Share

Shares ................................................ The shares of the Company

Sm3 .................................................... Standard cubic meter

SPA .................................................... The share purchase agreement entered into between the

Company and Marathon Norway Investment Coöperatief U.A.

dated 1 June 2014

Stortinget ............................................ The Norwegian Parliament

Subscription Price ................................... The subscription price in the Share Issue of NOK 48.50 per

share.

toe .................................................... Tonnes of oil equivalent

Transaction .......................................... The Company’s purchase of all issued and outstanding shares

in Marathon Norway

U.S. Securities Act .................................. The United States Securities Act of 1933, as amended

UKCS .................................................. UK continental shelf

Underwriters ........................................ BNP PARIBAS, DNB Markets, J.P. Morgan Securities plc. and

Nordea Markets

UOP ................................................... Unit of production method

USD ................................................... United States Dollar

VPS ................................................... The Norwegian Central Securities Depository (Nw.

Verdipapirsentralen)

[THIS PAGE IS INTENTIONALLY LEFT BLANK]

A 1

APPENDIX A—ARTICLES OF ASSOCIATION

APPENDIX A – ARTICLES OF ASSOCIATION

1. Name of the Company

The Company’s name is Det norske oljeselskap ASA. The Company is a public limited company.

2. Registered Address

The Company’s registered address, where principle parts of the Company’s administrative and operational activities take place, is in the municipality of Trondheim.

3. The Company Objective

The Company’s objective is to carry out exploration for, and recovery of, petroleum and activities related thereto, and, by subscribing for shares or by other means, to participate in corresponding businesses or other business, alone or in cooperation with other enterprises and interests.

4. The Company’s Share Capital

The Company’s share capital is NOK 140,707,363 fully-paid up and divided between 140,707,363 shares, each with a nominal value of NOK 1. The Company’s shares shall be registered in the Norwegian Central Securities Depository.

5. The Board of Directors

The Company’s Board of Directors shall consist of between five and ten members which are to be elected for a period of up to two years.

6. Signature

The Chairman of the Board of Directors and one board member jointly are authorised to sign on behalf of the Company. The Board of Directors can grant powers of procuration.

7. General Meeting

The Annual General Meeting shall be held each year within a period of 6 months from the end of the financial year. During the period of notice of the General Meeting, the documents shall be available at the Company’s office for the shareholders’ inspection.

The right to attend and vote at the General Meeting can only be exercised when the acquisition is introduced in the shareholder register no later than the fifth business day prior to the General Meeting (registration date).

When documents pertaining to business to be dealt with by the General Meeting are made available to shareholders at the Company’s website, the requirement of the documents to be sent to the shareholders shall not apply. This also applies to documents that by law shall be included in or attached to the notice of the Annual General Meeting.

The Board of Directors may decide that it shall be possible for shareholders to cast their votes in writing, including by means of electronic communication, in a given period prior to the general meeting. Satisfactory methods shall be used in order to authenticate the sender.

8. Nomination Committee

The Company shall have a Nomination Committee consisting of 3 members elected by the Annual General Meeting. The majority of the members of the Nomination Committee shall be independent of the Board of Directors and the general management.

The Nomination Committee shall recommend candidates to the Board of Directors, the Corporate Assembly and the Nomination Committee, and remuneration of the Board of Directors, the Corporate

A 2

1

Assembly and members of the Nomination Committee. The Nomination Committee’s recommendations shall be well-grounded.

Members of the Nomination Committee are elected for a term of two years at a time.

9. Corporate Assembly

The Company shall have a Corporate Assembly. The Corporate Assembly shall have 12 members and up to eight deputies. Eight of the members and up to four of the deputies for these shall be elected by the General Meeting. Four of the members and deputies for these are elected by and among the employees in accordance with regulations issued in or pursuant to the Public Limited Liabilities Act. The Corporate Assembly elects a chair and a deputy chair among its members.

B 1

APPENDIX B—ASSURANCE REPORT ON PRO FORMA FINANCIAL INFORMATION

KPMG AS Telephone +47 04063 P.O. Box 7000 Majorstuen Fax +47 22 60 96 01 Sørkedalsveien 6 Internet www.kpmg.no N-0306 Oslo Enterprise 935 174 627 MVA

KPMG AS, a Norwegian member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Statsautoriserte revisorer - medlemmer av Den norske Revisorforening.

Offices in: Oslo Alta Arendal Bergen Bodø Elverum Finnsnes Grimstad Hamar

Haugesund Knarvik Kristiansand Larvik Mo i Rana Molde Narvik Røros Sandefjord

Sandnessjøen Stavanger Stord Straume Tromsø Trondheim Tønsberg Ålesund

To the Board of Directors of Det norske oljeselskap ASA Report on the Compilation of Unaudited Pro Forma Financial Information Included in a Prospectus We have completed our assurance engagement to report on the compilation of unaudited pro forma financial information of Det norske oljeselskap ASA (“the Company”) by the Company. The pro forma unaudited financial information consists of the unaudited pro forma balance sheet as at 31 March 2014, the unaudited pro forma income statements for the year ended 31 December 2013 and for the three month period ended 31 March 2014 respectively and related notes as set out in section 12.6 of the Prospectus issued by the Company. The applicable criteria on the basis of which the Company has compiled the unaudited pro forma financial information are specified in EU Commission Regulation (EC) No 809/2004 which is incorporated in the Securities Trading Act (Norway). The unaudited pro forma financial information has been compiled by the Company to illustrate the impact of the acquisition of Marathon Oil Norway AS and related transactions set out in section 12.6 of the prospectus on the Company's financial position as at 31 March 2014 as if the transactions had taken place on that date, on the Company's financial performance for the year ended 31 December 2013 as if the transaction had taken place at 1 January 2013 and on the Company's financial performance for the three month period ended 31 March 2014 as if the transaction had taken place as at 1 January 2014. The Company’s and Marathon Oil Norway AS’ historical annual financial information used to compile the pro forma financial information has been extracted from annual financial statements audited by other independent accountants. The Company’s unaudited interim historical financial information used to prepare pro forma financial information has been extracted from its unaudited interim report as at and for the three month period ended 31 March 2014. The unaudited historical financial information of Marathon Oil Norway AS as at and for the period ended 31 March 2014 used to prepare pro forma information has been extracted from Marathon Oil Norway AS’ internal accounting records.

B 2


2

The Company’s Responsibility The Company management is responsible for compiling the unaudited pro forma financial information on the basis of EU Commission Regulation (EC) No 809/2004 which is incorporated in the Securities Trading Act (Norway).

Practitioner’s Responsibilities

Our responsibility is to express an opinion as required by Annex II, item 7 of EU Commission Regulation (EC) No 809/2004 which is incorporated in the Securities Trading Act (Norway) about whether the unaudited pro forma financial information has been compiled, by the Company on the basis described in section 12.6 in the Prospectus and whether this basis is consistent with the Company’s accounting policies as described in the 2013 annual financial statements. We conducted our engagement in accordance with International Standard on Assurance Engagements (ISAE) 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus, issued by the International Auditing and Assurance Standards Board. This standard requires that the practitioner comply with ethical requirements and plan and perform procedures to obtain reasonable assurance about whether the Company has compiled the unaudited pro forma financial information on the basis described in the basis of presentation. The above statement does not require an audit of historical unadjusted financial information, the adaptation of policies of Marathon Oil Norway AS with the accounting policies of the Company, or the assumptions summarized in section 12.6 of the Prospectus. Accordingly, for purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the unaudited pro forma financial information, nor have we, in the course of this engagement, performed an audit or review of the financial information, including any adjustments made to conform accounting policies, or assumptions used in compiling the unaudited pro forma financial information. Our work has consisted primarily of comparing the underlying historical financial information used to combine the unaudited pro forma financial information to source documentation, assessing documentation supporting any pro forma and other adjustments and discussing the unaudited pro forma information with the Company. The purpose of unaudited pro forma financial information included in a prospectus is solely to illustrate the impact of a significant event or transaction on unadjusted financial information of the entity as if the event had occurred or the transaction had been

B 3


3

undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the event or transaction would have been as presented. A reasonable assurance engagement to report on whether the unaudited pro forma financial information has been compiled on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used by the Company in the compilation of the unaudited pro forma financial information provide a reasonable basis for presenting the significant effects directly attributable to the event or transaction, and to obtain sufficient appropriate evidence about whether: The related pro forma adjustments give appropriate effect to those criteria; The unaudited pro forma financial information reflects the proper application of those

adjustments to the unadjusted financial information; and The basis is consistent with the accounting policies of the Company.

The procedures selected depend on the practitioner's judgment, having regard to the practitioner's understanding of the nature of the Company, the event or transaction in respect of which the unaudited pro forma financial information has been compiled, and other relevant engagement circumstances. The engagement also involves evaluating the overall presentation of the unaudited pro forma financial information. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Opinion

In our opinion, a) the unaudited pro forma financial information has been compiled on the basis stated in section 12.6 of the Prospectus b) the basis is consistent with the accounting policies of the Company

B 4


4

Report on Other Legal or Regulatory Requirements This report has been prepared solely in connection with the Company’s acquisition of 100 per cent of the shares in Marathon Oil Norway AS and the related rights issue in Norway and the listing of shares on the Oslo Stock Exchange and is included in the prospectus dated 9 July 2014 which is approved by the Financial Supervisory Authority of Norway. This report is not appropriate for any other jurisdiction than the EU and EEA and should not be used or relied upon for any purpose other than to comply with Annex II, item 7 of EU Commission Regulation (EC) No 809/2004 which is incorporated in the Securities Trading Act (Norway) Oslo, 9 July 2014 KPMG AS

Mona Irene Larsen State Authorised Public Accountant

C 1

APPENDIX C—ANNUAL ACCOUNTS 2013 OF MARATHON OIL NORGE AS

C 17

PricewaterhouseCoopers AS,T:Stats

To

Independent auditor’s report

Report on the Financial Statements

We have audited the accompanying financial statements ofthe balance sheet as at 31 December 2013, and the income statement, showing a profit of NOK2 446accounting policies and other exp

The Board of Directors and the Managing Director’s Responsibility for the Financial Statements

The Board of Directorspresentation of these financial statements inaccounting standards and practices generally accepted in Norway, and for such internal control as theBoard of Directorsfinancial s

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.conducted our audit in accordance with laws, regulagenerally accepted in Norway, including International Standards on Auditing. Those standards requirethat weassurance about wh

An audit involves performing procedures to obtain audit evidence about the amounts andin the financial statements. The procedures selected depend on the auditor’sassessment of the risks of material misstatement of the financialerror. In making those risk assessments, the auditorcompanyprocedures that are appropriate in theon the effectiveness of theappropriamanagement, as well as

We believe that the audit evidence we have obtained is sufficient and appropriour

Opinion

In our opinion,give a true and fair view of the financial position of Marathon Oil Norge AS as at 31 December 2013,and its financial performance and its cash flows for the year then ended in accordance with theNorwegian Accounting Act and accounting standards and practices generally accepted in Norway.

PricewaterhouseCoopers AS,T: 02316, org. no.: 987Statsautoriserte revisorer, medlemmer av

To the Annual Shareholders' Meeting



We have audited the accompanying financial statements ofthe balance sheet as at 31 December 2013, and the income statement, showing a profit of NOK

446 800 814accounting policies and other exp


The Board of Directorspresentation of these financial statements inaccounting standards and practices generally accepted in Norway, and for such internal control as theBoard of Directorsfinancial statements that are free from material misstatement, whether due to fraud or error.


Our responsibility is to express an opinion on these financial statements based on our audit.conducted our audit in accordance with laws, regulagenerally accepted in Norway, including International Standards on Auditing. Those standards requirethat we comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about wh

An audit involves performing procedures to obtain audit evidence about the amounts andin the financial statements. The procedures selected depend on the auditor’sassessment of the risks of material misstatement of the financialerror. In making those risk assessments, the auditorcompany’s preparation and fair presentation ofprocedures that are appropriate in theon the effectiveness of theappropriateness of accountingmanagement, as well as

We believe that the audit evidence we have obtained is sufficient and appropriour audit opinion.

Opinion

In our opinion,give a true and fair view of the financial position of Marathon Oil Norge AS as at 31 December 2013,and its financial performance and its cash flows for the year then ended in accordance with theNorwegian Accounting Act and accounting standards and practices generally accepted in Norway.

PricewaterhouseCoopers AS,org. no.: 987 009 713 MVA,

autoriserte revisorer, medlemmer av

the Annual Shareholders' Meeting




814 and cash flow statement,accounting policies and other exp


The Board of Directors and the Managing Director arepresentation of these financial statements inaccounting standards and practices generally accepted in Norway, and for such internal control as theBoard of Directors and the Managing Director determine is

tatements that are free from material misstatement, whether due to fraud or error.


Our responsibility is to express an opinion on these financial statements based on our audit.conducted our audit in accordance with laws, regulagenerally accepted in Norway, including International Standards on Auditing. Those standards require

comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andin the financial statements. The procedures selected depend on the auditor’sassessment of the risks of material misstatement of the financialerror. In making those risk assessments, the auditor

’s preparation and fair presentation ofprocedures that are appropriate in theon the effectiveness of the

teness of accountingmanagement, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriaudit opinion.

In our opinion, the financial statements are prepared in accordance with the law and regulations andgive a true and fair view of the financial position of Marathon Oil Norge AS as at 31 December 2013,and its financial performance and its cash flows for the year then ended in accordance with theNorwegian Accounting Act and accounting standards and practices generally accepted in Norway.

PricewaterhouseCoopers AS, Kanalsletta 8, Postboks 8017, NO713 MVA, www.pwc.no

autoriserte revisorer, medlemmer av

the Annual Shareholders' Meeting of




and cash flow statement,accounting policies and other explanatory information.


and the Managing Director arepresentation of these financial statements inaccounting standards and practices generally accepted in Norway, and for such internal control as the

and the Managing Director determine istatements that are free from material misstatement, whether due to fraud or error.


comply with ethical requirements and plan and perform the audit to obtain reasonableether the financial statements are free from material misstatement.


’s preparation and fair presentation ofprocedures that are appropriate in the

entity’s internal control. An audit also includes evaluating theteness of accounting policies used and the reasonableness of accounting estimates made by

evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropri

the financial statements are prepared in accordance with the law and regulations andgive a true and fair view of the financial position of Marathon Oil Norge AS as at 31 December 2013,and its financial performance and its cash flows for the year then ended in accordance with theNorwegian Accounting Act and accounting standards and practices generally accepted in Norway.

Kanalsletta 8, Postboks 8017, NOwww.pwc.no

autoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap

of Marathon Oil Norge AS




and cash flow statement, for the year then ended, and a summary of significantlanatory information.


and the Managing Director arepresentation of these financial statements in accordance with Norwegian Accounting Act andaccounting standards and practices generally accepted in Norway, and for such internal control as the

and the Managing Director determine istatements that are free from material misstatement, whether due to fraud or error.




’s preparation and fair presentation of the financial statements in order to design auditcircumstances, but not for the purpose of expressing an opinion

entity’s internal control. An audit also includes evaluating thepolicies used and the reasonableness of accounting estimates made by




Kanalsletta 8, Postboks 8017, NO-4068 Stavanger

Den norske Revisorforening og autorisert regnskapsførerselskap

Marathon Oil Norge AS

We have audited the accompanying financial statements of Marathon Oil Norge AS, which comprisethe balance sheet as at 31 December 2013, and the income statement, showing a profit of NOK

for the year then ended, and a summary of significantlanatory information.


and the Managing Director are responsible for the preparation and fairaccordance with Norwegian Accounting Act and

accounting standards and practices generally accepted in Norway, and for such internal control as theand the Managing Director determine is necessary to enable the preparation of


Our responsibility is to express an opinion on these financial statements based on our audit.conducted our audit in accordance with laws, regulations, and auditing standards andgenerally accepted in Norway, including International Standards on Auditing. Those standards require


An audit involves performing procedures to obtain audit evidence about the amounts andin the financial statements. The procedures selected depend on the auditor’sassessment of the risks of material misstatement of the financialerror. In making those risk assessments, the auditor considers internal control relevant to the

the financial statements in order to design auditcircumstances, but not for the purpose of expressing an opinion





4068 Stavanger


Marathon Oil Norge AS

Marathon Oil Norge AS, which comprisethe balance sheet as at 31 December 2013, and the income statement, showing a profit of NOK

for the year then ended, and a summary of significant


responsible for the preparation and fairaccordance with Norwegian Accounting Act and

accounting standards and practices generally accepted in Norway, and for such internal control as thenecessary to enable the preparation of


Our responsibility is to express an opinion on these financial statements based on our audit.tions, and auditing standards and

generally accepted in Norway, including International Standards on Auditing. Those standards requirecomply with ethical requirements and plan and perform the audit to obtain reasonable

ether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andin the financial statements. The procedures selected depend on the auditor’sassessment of the risks of material misstatement of the financial statements, whether due to fraud or

considers internal control relevant to thethe financial statements in order to design audit

circumstances, but not for the purpose of expressing an opinionentity’s internal control. An audit also includes evaluating the

policies used and the reasonableness of accounting estimates made byevaluating the overall presentation of the financial statements.










Our responsibility is to express an opinion on these financial statements based on our audit.tions, and auditing standards and practices


ether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andin the financial statements. The procedures selected depend on the auditor’s judgment, in

statements, whether due to fraud orconsiders internal control relevant to the




We believe that the audit evidence we have obtained is sufficient and appropri ate to provide a









Our responsibility is to express an opinion on these financial statements based on our audit. Wepractices


An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresjudgment, including the

statements, whether due to fraud orconsiders internal control relevant to the



ate to provide a basis for


Marathon Oil Norge AS, which comprise

accounting standards and practices generally accepted in Norway, and for such internal control as the

generally accepted in Norway, including International Standards on Auditing. Those standards require

disclosurescluding the

statements, whether due to fraud or

circumstances, but not for the purpose of expressing an opinion

policies used and the reasonableness of accounting estimates made by

basis for

the financial statements are prepared in accordance with the law and regulations andgive a true and fair view of the financial position of Marathon Oil Norge AS as at 31 December 2013,

C 18

Report on Other Legal and Regulatory Requirements

Opinion on the

Based on our audit of the financial statements as described above, it is our opinion that theinformation presented in the Board of Directors report concerning the financial statements, the goingconcern assumption and the propostatements and complies with the law and regulations.

Opinion on Registration and D

Based on our audit of the financial statements as described above, and control proceduresconsidered necessary in accordance with the International Standard on Assurance Engagements ISAE3000 “Assurance Engagements Other than Audits or Reviews of Historical Financial Information”, it isour opinion that management has fulfilled its dutyand documentation of the company’s accounting information inbookkeeping standards and practices generally accepted in

StavangerPricewaterhouseCoope

Henrik Zetliz NesslerState Authorised Public Accountant (Norway)

Note: This translation from Norwegian has been prepared for information purposes only.


Opinion on the




Stavanger, 19 March 2014PricewaterhouseCoope



Independent auditor's report


Opinion on the Board of Directors’ report




19 March 2014PricewaterhouseCoope



Independent auditor's report


Board of Directors’ report

Based on our audit of the financial statements as described above, it is our opinion that theinformation presented in the Board of Directors report concerning the financial statements, the goingconcern assumption and the proposal for the allocation of the profit is consistent with the financialstatements and complies with the law and regulations.

Opinion on Registration and Documentation


PricewaterhouseCoopers AS

State Authorised Public Accountant (Norway)


Independent auditor's report - 2013


Board of Directors’ report

Based on our audit of the financial statements as described above, it is our opinion that theinformation presented in the Board of Directors report concerning the financial statements, the going

sal for the allocation of the profit is consistent with the financialstatements and complies with the law and regulations.

ocumentation


State Authorised Public Accountant (Norway)


2013 - Marathon Oil Norge AS, page 2



sal for the allocation of the profit is consistent with the financialstatements and complies with the law and regulations.

Based on our audit of the financial statements as described above, and control proceduresconsidered necessary in accordance with the International Standard on Assurance Engagements ISAE3000 “Assurance Engagements Other than Audits or Reviews of Historical Financial Information”, it is

to produce a proper and clearlyand documentation of the company’s accounting information inbookkeeping standards and practices generally accepted in Norway.


Marathon Oil Norge AS, page 2


sal for the allocation of the profit is consistent with the financial


to produce a proper and clearlyand documentation of the company’s accounting information in accordance with the law and

Norway.


Marathon Oil Norge AS, page 2




to produce a proper and clearly set out registrationaccordance with the law and


(2)



Based on our audit of the financial statements as described above, and control procedures we haveconsidered necessary in accordance with the International Standard on Assurance Engagements ISAE3000 “Assurance Engagements Other than Audits or Reviews of Historical Financial Information”, it is

set out registrationaccordance with the law and


)

information presented in the Board of Directors report concerning the financial statements, the going

considered necessary in accordance with the International Standard on Assurance Engagements ISAE3000 “Assurance Engagements Other than Audits or Reviews of Historical Financial Information”, it is

set out registration

D 1

APPENDIX D—SUBSCRIPTION FORM

Det norske oljeselskap ASA RIGHTS ISSUE

SUBSCRIPTION FORM Securities no. ISIN NO 0010345853

General information: The terms and conditions of the Rights Issue by Det norske oljeselskap ASA (the “Company”) are set out in the prospectus dated 9 July 2014 (the “Prospectus”). Terms defined in the Prospectus shall have the same meaning in this Subscription Form. The notice of, and minutes from, the Extraordinary General Meeting of 3 July 2014 and the minutes from the board meeting on 9 July 2014, the Company’s Articles of Association and the annual accounts and annual reports for the last two years are available at the Company’s website www.detnor.no. The resolution to increase the share capital by the Extraordinary General Meeting is included in the Prospectus. All announcements referred to in this Subscription Form will be made through Oslo Børs’ information system under the Company’s ticker “DETNOR”.

Subscription procedures: The subscription period is from 09:00 hours (CET) on 15 July 2014 to 16:30 hours (CET) on 29 July 2014 (the “Subscription Period”). Correctly completed Subscription Forms must be received by one of the subscription offices before the end of the Subscription Period at one of the following addresses: DNB Markets, Registrar Department, Dronning Eufemias gate 30, N-0021 Oslo, Norway, E-mail: [email protected]; Nordea Markets, Middelthunsgate 17, P.O. Box 1166 Sentrum, N-0107 Oslo, Norway, Fax: +47 22 48 63 49; or Skandinaviska Enskilda Banken, Filipstad Brygge 1, P.O. Box 1843 Vika, N-0123 Oslo, Norway, (the “Subscription Offices”). The subscriber is responsible for the correctness of the information filled in on the Subscription Form. Subscription Forms that are incomplete or incorrectly completed, or that are received after the end of the Subscription Period, and any subscription that may be unlawful, may be disregarded, at the discretion of the Joint Bookrunners on behalf of the Company. Subscribers who are residents of Norway with a Norwegian personal identification number may also subscribe for Offer Shares through the VPS online subscription system by following the link on any of the following websites: www.dnb.no/emisjoner, www.nordea.no/detnor, www.seb.no.Subscriptions made through the VPS online subscription system must be duly registered before the expiry of the Subscription Period. Neither the Company nor any of the Joint Bookrunners may be held responsible for postal delays, unavailable fax lines, internet lines or servers or other logistical or technical problems that may result in subscriptions not being received in time or at all by the Subscription Offices. Subscriptions are irrevocable and binding upon receipt and cannot be withdrawn, cancelled or modified by the subscriber after having been received by a Subscription Office, or in the case of subscriptions through the VPS online subscription system, upon registration of the subscription.

Subscription Price: The Subscription Price in the Rights Issue is NOK 48.50 per Offer Share.

Subscription Rights: Registered holders of the Company’s shares (the “Existing Shareholders”) as appearing in the VPS as of the expiry of 14 July 2014 (the “Record Date”) will be granted Subscription Rights giving a preferential right to subscribe for, and be allocated, the Offer Shares. Each Existing Shareholder will be granted 11 Subscription Rights for every 25 Shares registered with the respective Existing Shareholder on the Record Date. The number of Subscription Rights granted to each Existing Shareholder will be rounded down to the nearest whole Subscription Right. Subscription Rights will not be granted for the Shares held in treasury by the Company. Each Subscription Right will, subject to applicable securities laws, give the right to subscribe for and be allocated one Offer Share in the Rights Issue. Over-subscription and subscription without Subscription Rights is permitted. Subscription Rights not used to subscribe for Offer Shares before the end of the Subscription Period or not sold before 16:30 hours (CET) on 24 July 2014 will have no value and will lapse without compensation to the holder.

Allocation of Offer Shares: The Offer Shares will be allocated to the subscribers based on the allocation criteria set out in the Prospectus. The Company reserves the right to reject or reduce any subscription for

Offer Shares not covered by Subscription Rights. The Company will not allocate fractional Offer Shares. Allocation of fewer Offer Shares than subscribed for does not impact on the subscriber’s obligation to pay for the Offer Shares allocated. Notification of allocated Offer Shares and the corresponding subscription amount to be paid by each subscriber is expected to be distributed in a letter from the VPS on or about 30 July 2014. Subscribers who have access to investor services through an institution that operates the subscriber’s VPS account should be able to see how many Offer Shares they have been allocated from 12:00 hours (CET) on or about 31 July 2014.

Payment: In completing this Subscription Form, or registering a subscription through the VPS online subscription system, subscribers authorise DNB Markets (on behalf of the Joint Bookrunners) to debit the subscriber’s Norwegian bank account for the total subscription amount payable for the Offer Shares allocated to the subscriber. Accounts will be debited on or about 4 August 2014 (the “Payment Date”), and there must be sufficient funds in the stated bank account from and including the date falling 2 banking days prior to the Payment Date. Subscribers who do not have a Norwegian bank account must ensure that payment for the allocated Offer Shares is made on or before the Payment Date. Details and instructions can be obtained by contacting DNB Markets, telephone: +47 23 26 81 01. DNB Markets (on behalf of the Joint Bookrunners) is only authorised to debit each account once, but reserves the right (but has no obligation) to make up to three debit attempts through 13 August 2014 if there are insufficient funds on the account on the Payment Date. Should any subscriber have insufficient funds in his or her account, should payment be delayed for any reason, if it is not possible to debit the account or if payments for any other reasons are not made when due, overdue interest will accrue and other terms will apply as set out under the heading “Overdue and missing payments” below.

PLEASE SEE PAGE 2 OF THIS SUBSCRIPTION FORM FOR OTHER PROVISIONS THAT ALSO APPLY TO THE SUBSCRIPTION DETAILS OF THE SUBSCRIPTION Subscriber’s VPS account: Number of Subscription Rights: Number of Offer Shares subscribed

(incl. over-subscription): (For broker: consecutive no.):

SUBSCRIPTION RIGHT’S SECURITIES NUMBER: ISIN NO 0010714892 Subscription Price per Offer Share:

NOK 48.50

Subscription amount to be paid:

NOK

IRREVOCABLE AUTHORISATION TO DEBIT ACCOUNT (MUST BE COMPLETED BY SUBSCRIBERS WITH A NORWEGIAN BANK ACCOUNT) Norwegian bank account to be debited for the payment for Offer Shares allocated (number of Offer Shares allocated x NOK 48.50).

(Norwegian bank account no.)

I/we hereby irrevocably (i) subscribe for the number of Offer Shares specified above subject to the terms and conditions set out in this Subscription Form and in the Prospectus, (ii) authorise and instruct each of the Joint Bookrunners (or someone appointed by them) acting jointly or severally to take all actions required to transfer such Offer Shares allocate to me/us to the VPS Registrar and ensure delivery of the beneficial interests to such Offer Shares to me/us in the VPS, on my/our behalf, (iii) authorise DNB Markets to debit my/our bank account as set out in this Subscription Form for the amount payable for the Offer Shares allotted to me/us, and (iv) confirm and warrant to have read the Prospectus and that I/we are eligible to subscribe for Offer Shares under the terms set forth therein.

Place and date

must be dated in the Subscription Period.

Binding signature

The subscriber must have legal capacity. When signed on behalf of a company or pursuant to an authorisation, documentation in the form of a company certificate

or power of attorney must be enclosed.

INFORMATION ON THE SUBSCRIBER – ALL FIELDS MUST BE COMPLETED First name

Surname/company

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ADDITIONAL GUIDELINES FOR THE SUBSCRIBER

Regulatory issues: In accordance with the Markets in Financial Instruments Directive (“MiFID”) of the European Union, Norwegian law imposes requirements in relation to business investments. In this respect, the Joint Bookrunners must categorize all new clients in one of three categories: eligible counterparties, professional clients and non-professional clients. All subscribers in the Rights Issue who are not existing clients of one of the Joint Bookrunners will be categorized as non-professional clients. Subscribers can, by written request to a Joint Bookrunner, ask to be categorized as a professional client if the subscriber fulfils the applicable requirements of the Norwegian Securities Trading Act. For further information about the categorization, the subscriber may contact DNB Markets (DNB Markets, KSC - Customer Administration, P.O. Box 7100, NO5020 Bergen, Norway or www.dnb.no/en/mifid), Nordea Markets, Middelthuns gate 17, P.O. Box 1166 Sentrum, N-0107 Oslo, Norway, phone +47 22 48 50 00 or Skandinaviska Enskilda Banken, Filipstad Brygge 1, P.O. Box 1843 Vika, 0123 Oslo, Norway, phone +47 22 82 70 00. The subscriber represents that he/she/it is capable of evaluating the merits and risks of a decision to invest in the Company by subscribing for Offer Shares, and is able to bear the economic risk, and to withstand a complete loss, of an investment in the Offer Shares.

Selling Restrictions: The attention of persons who wish to subscribe for Offer Shares is drawn to Section 21 “Selling and Transfer Restrictions” of the Prospectus. The Company is not taking any action to permit a public offering of the Subscription Rights or the Offer Shares (pursuant to the exercise of the Subscription Rights or otherwise) in any jurisdiction other than Norway. Receipt of the Prospectus will not constitute an offer in those jurisdictions in which it would be illegal to make an offer and, in those circumstances, the Prospectus is for information only and should not be copied or redistributed. Persons outside Norway should consult their professional advisors as to whether they require any governmental or other consent or need to observe any other formalities to enable them to subscribe for Offer Shares. It is the responsibility of any person wishing to subscribe for Offer Shares under the Rights Issue to satisfy himself as to the full observance of the laws of any relevant jurisdiction in connection therewith, including obtaining any governmental or other consent which may be required, the compliance with other necessary formalities and the payment of any issue, transfer or other taxes due in such territories. . The Subscription Rights and Offer Shares have not been registered, and will not be registered, under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered, sold, exercised, pledged, resold, granted, delivered, allocated, taken up, transferred or delivered, directly or indirectly, within the United States, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. The Subscription Rights and Offer Shares have not been and will not be registered under the applicable securities laws of Australia, Canada, Japan or Hong Kong and may not be offered, sold, exercised, pledged, resold, granted, allocated, taken up, transferred or delivered, directly or indirectly, in or into Australia, Canada, Japan or Hong Kong or in any other jurisdiction in which it would not be permissible to offer the Subscription Rights or the Offer Shares. A notification of exercise of Subscription Rights and subscription of Offer Shares in contravention of the above restrictions may be deemed to be invalid. By subscribing for the Offer Shares, persons effecting subscriptions will be deemed to have represented to the Company that they, and the persons on whose behalf they are subscribing for the Offer Shares, have complied with the above selling restrictions. Persons effecting subscriptions on behalf of any person located in the United States will be responsible for confirming that such person, or anyone acting on its behalf, has executed the investor letter in the form to be provided by a Joint Bookrunner upon request.

Execution Only: The Joint Bookrunners will treat the Subscription Form as an execution-only instruction. The Joint Bookrunners are not required to determine whether an investment in the Offer Shares is appropriate or not for the subscriber. Hence, the subscriber will not benefit from the protection of the relevant conduct of business rules in accordance with the Norwegian Securities Trading Act.

Information exchange: The subscriber acknowledges that, under the Norwegian Securities Trading Act and the Norwegian Commercial Banks Act and foreign legislation applicable to the Joint Bookrunners there is a duty of secrecy between the different units of each of the Joint Bookrunners as well as between the Joint Bookrunners and the other entities in the Joint Bookrunners respective groups. This may entail that other employees of the Joint Bookrunners or the Joint Bookrunners respective groups may have information that may be relevant to the subscriber and to the assessment of the Offer Shares, but which the Joint Bookrunners will not have access to in their capacity as Joint Bookrunners for the Rights Issue.

Information barriers: The Joint Bookrunners are securities firms that offer a broad range of investment services. In order to ensure that assignments undertaken in the Joint Bookrunners corporate finance departments are kept confidential, the Joint Bookrunners other activities, including analysis and stock broking, are separated from the respective Joint Bookrunners corporate finance departments by information walls. Consequently the subscriber acknowledges that the Joint Bookrunners analysis and stock broking activity may conflict with the subscriber’s interests with regard to transactions in the Shares, including the Offer Shares.

VPS account and mandatory anti-money laundering procedures: The Rights Issue is subject to the Norwegian Money Laundering Act of 6 March 2009 No. 11 and the Norwegian Money Laundering Regulations of 13 March 2009 No. 302 (collectively, the “Anti-Money Laundering Legislation”). Subscribers who are not registered as existing customers of one of the Joint Bookrunners must verify their identity to one of the Joint Bookrunners in accordance with requirements of the Anti-Money Laundering Legislation, unless an exemption is available. Subscribers who have designated an existing Norwegian bank account and an existing VPS account on the Subscription Form are exempted, unless verification of identity is requested by a Joint Bookrunner. Subscribers who have not completed the required verification of identity prior to the expiry of the Subscription Period will not be allocated Offer Shares. Participation in the Rights Issue is conditional upon the subscriber holding a VPS account. The VPS account number must be stated in the subscription form. VPS accounts can be established with authorised VPS registrars, who can be Norwegian banks, authorised securities brokers in Norway and Norwegian branches of credit institutions established within the EEA. Establishment of a VPS account requires verification of identity to the VPS registrar in accordance with the Anti-Money Laundering Legislation. However, non-Norwegian investors may use nominee VPS accounts registered in the name of a nominee. The nominee must be authorised by the Financial Supervisory Authority of Norway.

Terms and conditions for payment by direct debiting - securities trading: Payment by direct debiting is a service the banks in Norway provide in cooperation. In the relationship between the payer and the payer’s bank the following standard terms and conditions apply:

a) The service “Payment by direct debiting – securities trading” is supplemented by the account agreement between the payer and the payer’s bank, in particular Section C of the account agreement, General terms and conditions for deposit and payment instructions.

b) Costs related to the use of “Payment by direct debiting – securities trading” appear from the bank’s prevailing price list, account information and/or information given in another appropriate manner. The bank will charge the indicated account for costs incurred.

c) The authorisation for direct debiting is signed by the payer and delivered to the beneficiary. The beneficiary will deliver the instructions to its bank that in turn will charge the payer’s bank account.

d) In case of withdrawal of the authorisation for direct debiting the payer shall address this issue with the beneficiary. Pursuant to the Norwegian Financial Contracts Act the payer’s bank shall assist if the payer withdraws a payment instruction that has not been completed. Such withdrawal may be regarded as a breach of the agreement between the payer and the beneficiary.

e) The payer cannot authorise payment of a higher amount than the funds available on the payer’s account at the time of payment. The payer’s bank will normally perform a verification of available funds prior to the account being charged. If the account has been charged with an amount higher than the funds available, the difference shall immediately be covered by the payer.

f) The payer’s account will be charged on the indicated date of payment. If the date of payment has not been indicated in the authorisation for direct debiting, the account will be charged as soon as possible after the beneficiary has delivered the instructions to its bank. The charge will not, however, take place after the authorisation has expired as indicated above. Payment will normally be credited the beneficiary’s account between one and three working days after the indicated date of payment/delivery.

g) If the payer’s account is wrongfully charged after direct debiting, the payer’s right to repayment of the charged amount will be governed by the account agreement and the Norwegian Financial Contracts Act.

Overdue and missing payments: Overdue payments will be charged with interest at the applicable rate under the Norwegian Act on Interest on Overdue Payment of 17 December 1976 No. 100; 9.5% per annum as of the date of the Prospectus. If a subscriber fails to comply with the terms of payment, the Offer Shares will, subject to the restrictions in the Norwegian Public Limited Liability Companies Act, not be delivered to the subscriber. Pursuant to a payment guarantee agreement entered into by the Underwriters and the Company, the Underweriters will, subject to the terms and conditions of the payment guarantee, pre-fund payment for any Offer Shares not paid by the subscribers when due. The non-paying subscribers will remain fully liable for payment of the Offer Shares allocated to them, irrespective of any payment by the Underwriters under the payment guarantee. The Offer Shares allocated to such subscribers will be transferred to a VPS account operated by DNB Markets on behalf of the Underwriters and will be transferred to the non-paying subscriber when payment of the subscription amount for the relevant Offer Shares is received. The Underwriters reserve the right to, at any time and at the risk and cost of the subscriber, re-allot, cancel or reduce the subscription and the allocation of the allocated Offer Shares, or, if payment has not been received by the third day after the Payment Date, without further notice sell, assume ownership to or otherwise dispose of the allocated Offer Shares in accordance with applicable law. If Offer Shares are sold on behalf of the subscriber, such sale will be for the subscriber’s account and risk and the subscriber will be liable for any loss, costs, charges and expenses suffered or incurred by the Company and/or the Underwriters as a result of, or in connection with, such sales. The Company and/or the Underwriters may enforce payment for any amounts outstanding in accordance with applicable law.

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First quarter

reportTrondheim, July 09, 2014 Restated

www.detnor.no

APPENDIX E— FIRST QUARTER 2014 INTERIM FINANCIAL INFORMATION AND ACCOMPANYING INDEPENDENT AUDITOR’S REVIEW REPORT

First quarter 2014 report 2

Table of contentsFirst quarter summary........................................................................................3 Summary of financial results and operating performance .................................5 Financials...........................................................................................................6 Field performance and oil prices........................................................................6 Health, safety and the environment...................................................................6 PDO approved projects .....................................................................................7 Other projects ....................................................................................................7 Exploration .........................................................................................................7 Business development.......................................................................................8 Other issues.......................................................................................................8 Events after the quarter .....................................................................................8 Outlook.............................................................................................................10 Financial Statements .......................................................................................11

First quarter 2014 report | 2

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Report for the first quarter 2014First quarter summaryThis report replaces the first quarter financial reporting announced by Det norske oljeselskap ASA (“Det norske” or “the company”) 30 April 2014. The reissuance of these condensed interim financial statements has been triggered by a rights offering involving the preparation of a prospectus in connection to the acquisition of Marathon Oil Norge AS (refer to note 21), including an ISRE 2410 limited review performed by the Company's independent auditor. As a result, the Company evaluated events subsequent to the original approval date of 30 April 2014 by the board of directors of the Q1 2014 interim financial statements for new information that, if known at the original approval date, would have resulted in adjustments to the financial statements and for other information that would have resulted in additional disclosures. These events have been considered through the date of this report. Subsequent events which have occurred since 30 April 2014 that have resulted in additional disclosures are described in note 21. There has been one matter which has resulted in the recognition of an impairment charge on the Jette field, during the three months ended 31 March 2014, as described in note 4.

(All figures in brackets apply to the first quarter 2013)

Det norske reported revenues of NOK 158 (80) million in the first quarter. Exploration expenses amounted to NOK 110 (234) million, contributing to an operating loss of NOK 268 (251) million. Net financial expenses were NOK 60 (32) million. Net result for the first quarter was NOK -16 (-20) million, following a tax income of NOK 313 (262) million.

Det norske’s four producing assets – Jette, Atla, Varg and Jotun – produced 2,895 boepd on average during the quarter, with about half of this coming from Jette. The average realized oil price was USD 107 (112) per barrel.

The Ivar Aasen development project, where Det norske is operator with a 35 percent interest, is on schedule. Fabrication has commenced on the living quarters at Stord, the jacket in Sardinia and the topside in Singapore.

On the Johan Sverdrup project, the formal partner decision to pass Decision Gate 2 (DG2) was made. The plan is to submit a Plan for Development and Operations (PDO) that can be approved by the Norwegian Parliament in the first half of 2015, with first oil production in late 2019. The pre-unit operator Statoil has estimated gross field contingent resources in the range of 1,800 to 2,900 million barrels of oil equivalents. In the first quarter, an appraisal well on Geitungen encountered a gross oil column of six metres and subsequently asidetrack well was drilled approximately 1 km to the southwest.

Additionally, Det norske participated in the drilling of two wildcat exploration wells in the quarter. On the Trell prospect in the North Sea, a small oil discovery was made. The Langlitinden prospect in the Barents Sea encountered oil-bearing channel sands, but Det norske deems the discovery non-commercial.

Key events during the first quarter 2014

On 27 March, Det norske announced that the appraisal well in the Geitungen part of the Johan Sverdrup field encountered oil believed to represent the Statfjord formation. A planned sidetrack was also announced (see events after the quarter).

On 21 March, Det norske’s Corporate Assembly re-elected Tom Røtjer and elected Gro Kielland as members of the Board of Directors.

On 21 February, Det norske announced a small oil discovery at the Trell prospect in PL 102F in the North Sea.

On 21 February, Det norske announced that well 7222/11-2encountered sub-commercial volumes in the Langlitinden prospect in PL 659 in the Barents Sea.

On 13 February, pre-unit operator Statoil provided an update on the concept selection for Johan Sverdrup. The field will be developed in multiple phases and full field production capacity is expected to be in the range 550,000 to 650,000 barrels of oil equivalents

On 21 January, Det norske announced that Gro G. Haatvedt had been appointed as the new SVP Exploration in Det norske. She comes from the job as SVP Exploration for the NCS in Statoil.



On 21 January, Det norske was awarded six new licenses in theAPA 2013, of which two as operator.

On 2 January, Det norske announced oil discoveries in two targets at Askja in PL 272. Exploration well 30/11-9 S encountered a 90 metre gas column and appraisal well 30/11-9 A encountered a 40 metre oil column.

Key events after the quarter

On July 8, Det norske signed a senior secured seven-year USD 3.0 billion reserve-based lending facility On July 3, the Extraordinary General Meeting resolved the proposed

rights issue On 30 June, Det norske announced a unit agreement for the Ivar

Aasen field and a 35 percent increase in recoverable reserves On 26 June, Det norske announced a swap agreement with E.ON

that increased Det norske’s interest in PL457 by 20 percent On 20 June, Det norske announced that well 6507/5-7 on the Terne

prospect did not encounter hydrocarbons On 17 June, Det norske announced that the company had signed an

agreement to swap 10 percent of PL554/B/C containing the Garantiana discovery for a 20 percent interest in PL457 containing the Asha discovery

On 2 June, Det norske announced that the company had entered into an agreement to acquire Marathon Oil Norge AS for a cash consideration of USD 2.1 billion

On 2 June, Det norske announced that the Board of Directors had proposed a fully underwritten rights issue of USD 500 million in new equity

On 27 May, Det norske announced that well 31/2-21S on the Gotama prospect did not encounter reservoir quality sandstones in the Upper Jurassic main target

On 29 April, Det norske announced that the Geitungen sidetrack encountered a 12-metre oil-bearing interval of medium good reservoir.


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Summary of financial results and operating performance

MNOK= NOK million Q1 14 Q4 13 Q3 13 Q2 13 Q1 13 2013

Jette (boepd), 70% 1 458 2 710 4 378 3 594 0 2 683

Atla (boepd), 10% 750 1 031 981 1 446 1 253 1 177

Varg (boepd), 5% 500 412 377 398 425 403

Glitne (boepd), 10% 0 0 0 0 43 11

Enoch (boepd), 2% 0 0 0 0 0 0

Jotun Unit (boepd), 7% 188 175 204 175 209 191

Total production (boepd) 2 895 4 328 5 940 5 613 1 929 4 463

Oil and gas production (Kboe) 261 398 547 511 174 1 629

Oil price realised (USD/barrel) 107 109 112 103 112 107

Operating revenues (MNOK) 158 254 324 286 80 944

EBITDA (MNOK) -12 -400 -348 -127 -216 -1 091

Cash flow from production (MNOK) 112 151 269 227 37 684

Exploration expenses (MNOK) 110 544 588 271 234 1 637

Total exploration expenditures (expensed and capitalised) (MNOK)

151 400 581 373 306 1 659

Operating loss (MNOK) -268 -1 182 -518 -277 -251 -2 227

Net profit/loss(-) for the period (MNOK) -16 -329 -158 -41 -20 -548

No of licences (operatorships) 77 (27) 80 (33) 74 (30) 72 (30) 69 (28) 80 (33)



Financials First quarter accountsOperating revenues in the first quarter was NOK 158 (80) million. The main cause of increase is that Jette commenced production in the second quarter 2013. Production in the quarter increased by 50 percent from 1,929 barrels of oil equivalents per day (boepd) in the first quarter 2013 to 2,895 boepd this quarter. Jette accounted for 1,458 (0) boepd and Atla for 750 (1,253) boepd.

Exploration expenses amounted to NOK 110 (234) million. The company expensed costs relating to the Langlitinden well in PL 659 as well as other exploration costs.

The operating loss increased to NOK 268 (251) million, as a result of animpairment on the Jette field.

Net financial expenses in the first quarter amounted to NOK 60 (32) million.

The net profit/(loss) for the period was NOK -16 (-20) million after a tax income of NOK 313 (262) million. This translates to a tax rate of 95 percentdue to uplift, a special income deduction in the basis for calculation of petroleum tax, on previous years’ investments.

Net cash flow from operating activities was NOK -489 (-267) million. Net cash flow from investment activities amounted to NOK -707 (-699) million, mainly caused by investments in fields under development. Net cash flow from financing activities totalled NOK 308 (548) million as the company had net withdrawal of debt.

The company’s cash and cash equivalents amounted to NOK 821 (736)million as of 31 March. Tax receivables for disbursement in December 2014 amounted to NOK 1,417 (1,278) million and tax receivable for disbursement in December 2015 amounted to NOK 148 (261) million.

The equity ratio as of 31 March was 30.3 (42.3) percent. Discoveries and fields under development contributed to a total asset balance of NOK 10,467(8,794) million as of 31 March.

Field performance and oil pricesDet norske produced 260,569 barrels of oil equivalents (boe) in the first quarter of 2014. This corresponds to 2,895 (1,929) boepd.

The average realized oil price was USD 107 (112) per barrel, while gas revenues were recognised at market value of NOK 2.3 (2.3) per standard cubic metre (scm).

Jette (70 percent operator) came on stream in May 2013 and produced 1,458boepd net on average in the first quarter, accounting for 50 percent of total production. During March, Jette’s main producer was shut for 10 days and the other well for four days. This was to test whether more optimal production could be achieved by producing one well at a time in order to reduce water-cut and allow pressure build-up. For the time being, it has proved more effective to continue to produce from both wells simultaneously. In the second quarter, the Jette field has had stable operations from both wells. However, following a revision of the Jette reservoir, the estimate for ultimate recoverable reserves has been reduced from about 5 mmboe to 3.3 mmboe.

Atla (10 percent partner) produced 750 (1,253) boepd net on average in the first quarter and accounted for 26 percent of the total production. Atla’s production was somewhat restricted in January and February 2014 due to priority to the Skirne field, but was stable in March.

Varg (5 percent partner) produced 500 (425) boepd net to Det norske in the first quarter, or 17 percent of total production. Gas export commenced from the field in early February 2014. The gas is exported through the Rev gas field to the Armada platform and transported to the UK via the CATS pipeline.

The average production rate on Jotun (7% partner) was 188 (209) boepd net to Det norske in the first quarter, which represented about 6 percent of total production. Production remained stable during the quarter.

Health, safety and the environmentThe company is devoted to securing that all its projects are developed under the highest HSE standards in the oil industry.

During the first quarter, Det norske drilled the PL 659 Langlitinden exploration well in the Barents Sea. One notification was made to the Petroleum Safety


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Authority to inform that Det norske had to leave a radioactive source in the well as it got stuck and was not possible to retrieve. The Environmental Directorate carried out an audit of Det norske during the drilling operations, without finding any deviations.

In February 2014, the Ivar Aasen project experienced a near-miss hazardous situation with a dropped object at a yard on contract with Det norske. Det norske has investigated the incident and measures have been implemented.

PDO approved projectsIvar Aasen – PL 001B/242/028B (35 percent, operator)The Ivar Aasen field development project is progressing according to schedule towards planned start up in Q4 2016.

Ivar Aasen is being developed with a steel jacket platform. The topside will include living quarters and a processing facility for first stage separation. The detailed engineering for the topside is being carried out by Mustang Engineering outside London, UK. First steel cutting for jacket and topside fabrication was performed in November 2013 and in March 2014 for the living quarter.

In December 2012, the partners in PL 457 encountered oil in the 16/1-16 and 16/1-16A wells. PL 457 is located adjacent and to the east of Ivar Aasen. The Ivar Aasen partners have signed a pre-unitization agreement with the partners in PL 457. The agreement allows for a coordinated development of the discoveries and sets out principles for the work processes towards an initial unitization split. The unitization agreement was finalised in June 2014 (refer to events after the quarter section below).

Gina Krog – PL 029B/029C/048/303 (3.3 percent partner)The Gina Krog field is progressing according to schedule with planned start up in 2017.

The development plan for the field includes a steel jacket and integrated topside with living quarters and processing facilities. Oil from Gina Krog will be exported to the markets with shuttle tankers while exit for the gas is via the Sleipner platform.

Other projectsJohan Sverdrup – PL 265 (20 percent, partner) & PL 502 (22.22 percent,partner)Statoil, as the pre-unit operator on the Johan Sverdrup field, announced the key parts of the field concept selection in February 2014, as Decision Gate 2 (DG2) for the first development phase was passed in the Johan Sverdrup pre-unit partnership. The concept for future phases will be decided in a separate process after the phase 1 PDO.

Statoil communicated full field production capacity is expected to be in the range 550,000 to 650,000 barrels of oil equivalents and gross field recoverable contingent resources between 1,800 and 2,900 million barrels oil equivalents. Total investments for the first phase are estimated to be between NOK 100 and 120 billion, including contingencies and provisions for market adjustments. Phase 1 has capacity to produce more than 70% of the resources.

The plan is to submit a Johan Sverdrup PDO to the authorities by the first quarter of 2015, with first oil expected in the fourth quarter of 2019. A unitization negotiation process has commenced between the Johan Sverdrup licensees and will be finalised at the same time as the PDO.

During the first quarter an appraisal well (16/2-19) was drilled on Geitungen on the northern margin of the Johan Sverdrup field in PL 265. The well encountered six metres of oil-bearing sandstone of medium to good quality assumed to constitute part of the Statfjord group. The well was drilled to a vertical depth of 2,024 metres and was terminated in basement rocks. Following this, the partnership decided to drill a sidetrack well approximately 1 km to the southwest with the objective to clarify the northern extent of the Johan Sverdrup main reservoir of the Draupne formation sandstones.

ExplorationDuring the quarter, the company’s cash spending on exploration was NOK 151 million, of which NOK 110 million was recognised as exploration expenses.



Trell – PL 102F (10 percent, partner)Drilling of exploration well 25/5-9 on the Trell prospect in the North Sea was completed in February this year. The well encountered a gross oil column of 21 meters in the Heimdal formation, of which 19 meters had good reservoir quality. Basic data acquisition and sampling indicate very good production properties, in line with expectations.

Preliminary estimates indicate between 0.5 and 2.0 million standard cubic meters of recoverable oil. The licensees will evaluate the discovery together with other nearby prospects and consider further follow-up.

Langlitinden – PL 659 (20 percent, operator)Drilling of exploration well 7222/11-2 on the Langlitinden prospect in the Barents Sea was completed in February this year. The well encountered an oil-bearing channel sand of Triassic age. Extensive data sampling, includingcores, wireline logs and fluid samples have been performed.

Hydrocarbons were proved in the main target for the well, but a mini-drillstem test proved poor reservoir properties. Det norske is of the opinion that thevolumes proven in this well, as of today, are insufficient to justify a field development.

APA 2013In the Awards in Predefined Areas (APA) 2013, Det norske was awarded six new licenses, of which two as operator. All six licenses are located in the North Sea.

New SVP ExplorationIn January 2014, Gro Haatvedt accepted an offer to become Senior Vice President Exploration in Det norske oljeselskap ASA. Haatvedt was previously Senior Vice President for Exploration on the Norwegian Continental Shelf in Statoil.

Business developmentAs part of a continuous program to optimise its portfolio, Det norske relinquishes exploration licenses, and farms in and out of licenses on a regular basis.

In the fourth quarter 2013, Det norske entered into an agreement with Atlantic Petroleum Norge AS concerning the sale of a 10 percent interest in PL 659 in

the Barents Sea. The licence contains the Langlitinden prospect, which drilled in the first quarter. Det norske is the operator and holds 20 percent in the license following the transaction. As compensation, Atlantic Petroleum carriedpart of Det norske’s drilling costs related to the exploration well.

Other issuesDet norske’s Corporate Assembly in March re-elected Tom Røtjer as member of the Board of Directors and elected Gro Kielland, formerly CEO of BP Norway, as new member of the Board of Directors in replacement of Maria Moræus Hanssen, who resigned from the Board of Directors in the autumn of 2013.

Events after the quarterJohan Sverdrup appraisalIn the Geitungen sidetrack well, a 12-metre oil-bearing sandstone /siltstoneinterval of medium good reservoir development was encountered in the Draupne formation. The well was drilled to a vertical depth of 1 971 metres and was terminated in basement rocks. Extensive data acquisition and sampling have been carried out in both wells. The well results will be incorporated into the Johan Sverdrup field development work.

Authorisation for share capital increaseThe General Assembly in April gave the Board of Directors an authorisation to increase the share capital, in one or more rounds, by a total of up to NOK 14,070,730. The Board of Directors were also authorised to acquire up to NOK 14,070,736 in treasury shares. The mandates are valid to the ordinary general meeting in 2015, but no later than June 30, 2015.

Business developmentIn the second quarter 2014, Det norske entered into an agreement with Petrolia Norway AS to farm out 10 percent of PL558 for a partial carry agreement. The transaction is approved by the partnership, pending approval by the authorities.

In June, Det norske entered into an agreement with Spike Exploration to swap a 10 percent interest in licence 554/B/C containing the Garantiana oil discovery for a 20 percent interest in license 457 containing parts of the Ivar Aasen deposit. Licence 457 is located adjacent and to the east of licence


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001B (Ivar Aasen, DETNOR 35 percent and operator) on the Utsira High in the North Sea. Following drilling of the Asha discovery in late 2012 it was established that Ivar Aasen extends into licence 457. The transaction is subject to approval from the relevant authorities.

Moreover, Det norske subsequently signed an agreement with E.ON E&P Norge AS (E.ON) in June to swap two exploration licenses plus a cash consideration for a 20 percent interest in license 457. After completion of the agreement and the Spike transaction, Det norske will hold 40 percent in PL457. As a result of the transaction, the company’s share in license 613 in the Barents Sea decreases from 35 percent to 20 percent and the company’s share in license 676 S in the North Sea decreases from 20 percent to 10 percent.

Ivar Aasen unitisation and increased volumesIn June, Det norske signed a unit agreement for the Ivar Aasen development on the Utsira High in the North Sea with the licencees in PL001B, PL242, PL457 and PL338. Det norske is operator and will have 34.7862 percent interest in the unit, following completion of the announced acquisition of 40 percent interest in PL457 from Spike Exploration and E.ON E&P Norge AS.

The unit comprises the Ivar Aasen and West Cable deposits, while the Hanz deposit remains in PL028B, where Det norske is operator and has 35 percent working interest. Hanz is planned to be developed in phase 2 of the Ivar Aasen development.

Det norske estimates that gross proven and probable (P50) reserves for the Ivar Aasen development (including Hanz) are about 210 million barrels of oil equivalents (mmboe), an increase of approximately 35 percent compared to end 2013 P50 reserves. Net to Det norske, this amounts to about 74 mmboe. The reserve increase is a result of the inclusion of volumes from PL457 and PL338, as well as positive results from well 16/1-16 in PL457 and ocean-bed seismic (OBS) processed in conjunction with an updated drainage strategy submitted to the Ministry of Petroleum and Energy on June 30, 2014.

The updated drainage strategy has not identified a need for additional wells to develop the Ivar Aasen reserves. Total investments for the Ivar Aasen development are estimated at NOK 27.4 billion (nominal), unchanged from the Plan for Development and Production (PDO).

The Ivar Aasen field development project is progressing according to schedule towards a planned start-up in the fourth quarter 2016. Partners in the development are Statoil, Bayerngas, Wintershall, VNG, Lundin and OMV.

ExplorationDrilling of exploration well31/2-21 S on the Gotama prospect in PL550 offshore Norway was completed in May. The well did not encounter reservoir quality sandstones in the Upper Jurassic main target. The well encountered reservoir quality sandstones in secondary targets, but these were water wet. Det norske held a 10 percent carried interest in the well.

Drilling of exploration well 6507/5-7 on the Terne prospect in PL558 in the Norwegian Sea was completed in June. The well did not encounter hydrocarbons. Det norske farmed out 10 percent in the license for a partial carry agreement with Petrolia Norway AS, retaining a 10 percent partially carried interest in the license.

Acquisition of Marathon Oil Norge ASOn June 2, 2014 Det norske announced that the Company had entered into an agreement to acquire Marathon Oil Norge AS (“MONAS“) for a cash consideration of USD 2.1 billion.

The cash consideration is based on a gross asset value of USD 2.7 billion and is adjusted for debt, net working capital and interest on the net purchase price. The effective date of the transaction is 1 January 2014 and it is expected to close in the fourth quarter 2014, subject to regulatory approvals.

Marathon Norway represents an excellent strategic fit for Det norske:

• Its portfolio of quality assets comes with limited capital expenditure commitments, low historic tax balances and high near-term production that complement the planned production start of Det norske’s Ivar Aasen and Johan Sverdrup developments.

• Marathon Norway’s organisation brings significant operational experience from the Alvheim fields, which adds to Det norske’s exploration and development capabilities.

• Marathon Norway’s assets are geographically focused and are all producing through the Alvheim FPSO that boasts a robust operating track record. Furthermore, the company’s assets are oil rich (80% of the reserves are oil).



After the transaction, Det norske will have 202 mmboe in 2P reserves (end 2013). In addition, the combined Company will have contingent resources amounting to 101 mmboe, excluding Johan Sverdrup. Further identified upside in Marathon’s portfolio is estimated at approximately 80 million boe. Combined 2013 production for the two companies amounted to approximately84 thousand boe per day, making Det norske one of the largest listed independent E&P companies in Europe in terms of output.

Det norske secured a fully committed and underwritten acquisition loan facility for the full cash consideration. This facility was provided by BNP PARIBAS, DNB, Nordea and SEB. On July 8, 2014 the Company signed a reserve-based lending facility (“RBL Facility”), fully underwritten by the same banks. The RBL Facility is a senior secured seven-year USD 3.0 billion facility and includes an additional uncommitted accordion option of USD 1.0 billion. This long-term facility will replace the USD 2.2 billion acquisition bridge facility upon closing of the Marathon Oil Norway acquisition and refinance Det norske's current revolving credit facility.

As an integral component of the long-term financing plan, the company will strengthen its equity base by issuing the NOK equivalent of USD 500 million in new equity through a rights issue. The company’s largest shareholder Aker Capital AS has pre-committed to subscribe for its 49.99% pro rata share of such rights issue. The remaining 50.01% is fully underwritten by a consortium of banks. With this equity issue, the company has secured the financing of its current work program until first production from the Johan Sverdrup field. The rights issue was resolved at an Extraordinary General Meeting on July 3, 2014 and the subscription period is expected to commence in mid-July.

The acquisition of Marathon Norway will increase Det norske’s financial robustness and its ability to absorb the impact of any changes in future capital spend. This will improve the company’s credit profile and reduce the cost of capital.

After the acquisition Det norske will have more than 450 employees. No redundancies are expected as a result of the transaction given the breadth of opportunities across the growing organisation

The completion of the transaction is subject to approval by the relevant Norwegian and European Union authorities.

OutlookThe acquisition of Marathon Norway is a transformational transaction for Det norske. Marathon Norway’s material portfolio of oil-producing assets, together with Det norske’s development projects, provide a diversified and balanced asset base and creates a strong platform for future organic growth. Work to integrate the two organisations is well underway and closing of the transaction is expected in the fourth quarter 2014.

With the new reserve-based lending facility and the upcoming equity issue, the company has secured the financing of its current work program until first production from the Johan Sverdrup field.

Ivar Aasen and Johan Sverdrup are the most important field development projects for Det norske and both projects are progressing according to plan. The unitisation discussions at Johan Sverdrup are ongoing.

Based on current plans, Det norske will participate in around 10 exploration wells through 2014. Det norske will further revisit its exploration strategy going forward in light of the Marathon acquisition.


E 6

CONDENSED STATEMENT OF INCOME CONDENSED TOTAL COMPREHENSIVE INCOME

(Restated) (Restated) (Restated) (Restated)(All figures in NOK 1,000) Note 2014 2013 2014 2013 (All figures in NOK 1,000) 2014 2013 2014 2013

Petroleum revenues 2 155 101 78 709 155 101 78 709 Profit/loss for the period -15 783 -20 326 -15 783 -20 326Other operating revenues 2 3 241 1 630 3 241 1 630

Total operating revenues 158 342 80 339 158 342 80 339 -15 783 -20 326 -15 783 -20 326

Exploration expenses 3 109 582 233 738 109 582 233 738Production costs 42 949 41 512 42 949 41 512Payroll and payroll-related expenses 5 4 559 1 527 4 559 1 527Depreciation 4 88 863 34 997 88 863 34 997Impairment losses 4 167 373 167 373Other operating expenses 5 13 305 19 208 13 305 19 208

Total operating expenses 426 631 330 983 426 631 330 983

Operating profit/loss -268 289 -250 644 -268 289 -250 644

Interest income 6 12 145 7 202 12 145 7 202Other financial income 6 34 663 20 602 34 663 20 602Interest expenses 6 86 753 12 748 86 753 12 748Other financial expenses 6 20 530 47 153 20 530 47 153

Net financial items -60 475 -32 097 -60 475 -32 097

Profit/loss before taxes -328 764 -282 741 -328 764 -282 741

Taxes (+)/tax income (-) 7 -312 981 -262 415 -312 981 -262 415

Net profit/loss -15 783 -20 326 -15 783 -20 326

Weighted average no. of shares outstanding 140 707 363 140 707 363 140 707 363 140 707 363Weighted average no. of shares fully diluted 140 707 363 140 707 363 140 707 363 140 707 363Earnings/(loss) after tax per share -0,11 -0,14 -0,11 -0,14 Earnings/(loss) after tax per share fully diluted -0,11 -0,14 -0,11 -0,14

1.1 - 31.03Q1 1.1 - 31.03 Q1

Total comprehensive income in period


CONDENSED STATEMENT OF FINANCIAL POSITION

(All figures in NOK 1,000) Note 31.03.2014 31.03.2013 31.12.2013 (All figures in NOK 1,000) Note 31.03.2014 31.03.2013 31.12.2013

ASSETS EQUITY AND LIABILITIES

Intangible assets Paid-in capitalGoodwill 4 321 120 387 551 321 120 Share capital 12 140 707 140 707 140 707Capitalised exploration expenditures 4 1 555 348 2 247 718 2 056 100 Share premium 3 089 542 3 089 542 3 089 542Other intangible assets 4 643 050 660 581 646 299Deferred tax asset 7 795 400 630 423

Total paid-in equity 3 230 249 3 230 249 3 230 249Tangible fixed assetsProperty, plant, and equipment 4 3 536 285 2 486 607 2 657 566 Retained earnings

Other equity -57 563 485 600 -41 780Financial assetsLong term receivables 10 138 078 67 240 125 432 Total Equity 3 172 687 3 715 849 3 188 470Calculated tax receivables 7 148 004 261 139Other non-current assets 8 282 472 200 559 285 399

Total non-current assets 7 419 757 6 311 395 6 722 340 Provisions for liabilitiesPension obligations 36 375 54 625 66 512Deferred taxes 7 125 113

Inventories Abandonment provision 19 829 720 867 895 828 529Inventories 39 549 21 059 40 880 Provisions for other liabilities 696 325 780

Receivables Non current liabilitiesAccount receivables 14 128 239 86 452 134 221 Bonds 17 2 475 559 589 939 2 473 582Other short term receivables 9 617 286 337 720 499 419 Other interest-bearing debt 18 2 150 288 1 453 035 2 036 907Short-term deposits 24 375 23 625 24 075 Derivatives 13 48 228 48 693 49 453Calculated tax receivables 7 1 416 550 1 278 297 1 411 251

Current liabilitiesCash and cash equivalents Short-term loan 15 680 794 969 819 478 050Cash and cash equivalents 11 821 069 735 706 1 709 166 Trade creditors 218 370 230 398 452 435

Accrued public charges and indirect taxes 24 457 18 881 23 579Total current assets 3 047 067 2 482 859 3 819 011 Abandonment provision 19 156 397 147 375

Other current liabilities 16 673 254 719 684 795 680

Total liabilities 7 294 137 5 078 405 7 352 882

TOTAL ASSETS 10 466 824 8 794 255 10 541 352 TOTAL EQUITY AND LIABILITIES 10 466 824 8 794 255 10 541 352












Taxes (+)/tax income (-) 7 -312 981 -262 415 -312 981 -262 415

Net profit/loss -15 783 -20 326 -15 783 -20 326


1.1 - 31.03Q1 1.1 - 31.03 Q1












Taxes (+)/tax income (-) 7 -312 981 -262 415 -312 981 -262 415

Net profit/loss -15 783 -20 326 -15 783 -20 326


1.1 - 31.03Q1 1.1 - 31.03 Q1


E 7

CONDENSED STATEMENT OF CHANGES IN EQUITY

(All figures in NOK 1,000)

Equity as of 31.12.2012 140 707 3 089 542 3 600 107 -2 188 -3 091 994 505 926 3 736 175

Total loss for 2013 894 -548 600 -547 706 -547 706Equity as of 31.12.2013 140 707 3 089 542 3 600 107 -1 294 -3 640 594 -41 780 3 188 469

Profit/loss for the period 1.1.2014 - 31.03.2014 -15 783 -15 783 -15 783Equity as of 31.03.2014 140 707 3 089 542 3 600 107 -1 294 -3 656 377 -57 563 3 172 687

Total equityShare capital Share premiumOther paid-in

capitalRetained earnings

Other com-prehensive

incomeTotal other

equity

Other equity


CONDENSED STATEMENT OF CASH FLOW Year

(All figures in NOK 1,000) Note 2014 2013 2013

Cash flow from operating activities Profit/loss before taxes -328 764 -282 741 -2 545 327Taxes paid during the period -26 585Tax refund during the period 1 318 430Depreciation 4 88 863 34 997 470 529Net impairment losses 4 167 373 666 135Accretion expenses 19 12 920 9 924 42 765Losses on sale of license 734Changes in derivatives 6 -2 383 2 708 3 174Amortization of interest expenses and arrangement fee 6 10 064 9 291 88 458Expensed capitalized dry wells 3,4 73 601 163 563 1 150 541Changes in inventories, accounts payable and receivables -226 752 -12 661 141 786Changes in other current balance sheet items -283 796 -191 924 -394 934Net cash flow from operating activities -488 876 -266 843 915 707

Cash flow from investment activitiesPayment for removal and decommissioning of oil fields 19 -2 706 -2 056 -36 739Disbursements on investments in fixed assets 4 -589 611 -461 186 -1 495 709Disbursements on investments in capitalised exploration expenditures and other intangible assets 4 -114 942 -236 007 -1 358 941Sale/farmout of tangible fixed assets and licenses 86 472Net cash flow from investment activities -707 260 -699 249 -2 804 917

Cash flow from financing activitiesRepayment of short-term debt 15 -1 500 000Repayment of long-term debt 17,18 -290 927 -2 185 102Proceeds from issuance of long-term debt 17,18 398 966 147 616 4 729 297Proceeds from issuance of short-term debt 15 200 000 400 000 1 400 000Net cash flow from financing activities 308 039 547 616 2 444 195

Net change in cash and cash equivalents -888 097 -418 476 554 985

Cash and cash equivalents at start of period 11 1 709 166 1 154 182 1 154 182Cash and cash equivalents at end of period 821 069 735 706 1 709 166

Specification of cash equivalents at end of period:Bank deposits, etc. 810 723 725 109 1 693 319Restricted bank deposits 10 346 10 597 15 847

11 821 069 735 706 1 709 166

Q1

Cash and cash equivalents at end of period


E 8

NOTES(All figures in NOK 1,000)

Note 1 Accounting principles

Note 2 Revenues

Breakdown of revenues: 2014 2013

Recognized income oil 128 541 47 299Recognized income gas 21 891 25 815Tariff income 4 668 5 595Total petroleum revenues 155 101 78 709

Breakdown of produced volumes (barrel of oil equivalents):Oil 195 760 85 330Gas 64 810 88 310Total produced volumes 260 569 173 639

Other operating revenues (subletting of office space) 3 241 1 630

Q1

These condensed interim financial statements have been prepared in accordance with the International Financial Reporting Standards as adopted by the EU (IFRS) IAS 34 "Interim Financial Reporting". The interim financial statements do not include all information required by IFRS. These interim financial statements have been subject to a review in accordance with the International Standard on Review Engagements 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. These condensed interim financial statements replace and restate the condensed interim financial statements as at and for the three months ended 31 March 2014 released on 30 April 2014.

The accounting principles used for this interim report are in all material respect consistent with the principles used in the Financial statement for 2013. There are some new and amended standards effective from 1 January 2014, as mentioned in the annual report 2013. These standards are implemented in Q1 2014, but do not have material impact on the interim Financial Statements.

The reissuancee of these condensed interim financial statements has been triggered by a rights offering involving the preparation of a prospectus in connection to the acquisition of Marathon Oil Norge AS (refer to note 21), including an ISRE 2410 limited review performed by the Comapny's independent auditor. As a result, the Company evaluated events subsequent to the original approval date of 30 April 2014 by the board of directors of the Q1 2014 interim financial statements for new information that, if known at the original approval date, would have resulted in adjustments to the financial statements and for other information that would have resulted in additional disclosures. These events have been considered through the date of this report.

Subsequent events which have occurred since 30 April 2014 that have resulted in additional disclosures are described in note 21. There has been one matter which has resulted in the recognition of an impairment charge on the Jette field, during the three months ended 31 March 2014, as described in note 4.

Note 3 Exploration expenses

Breakdown of exploration expenses: 2014 2013

Seismic, well data, field studies, other exploration costs 17 222 60 345Recharged rig costs -47 047 -38 418Exploration expenses from license participation incl. seismic 37 857 37 985Expensed capitalized wells previous years 13 434 13 993Expensed capitalized wells this year 60 166 149 570Payroll and other operating expenses classified as exploration 23 359 8 000Exploration-related research and development costs 4 590 2 263Total exploration expenses 109 582 233 738

Note 4 Tangible assets and intangible assets

Intangible assets Software Total Goodwill

Book value 31.12.2012 661 642 3 899 665 541 2 175 492 387 550

Acquisition cost 31.12.2012 1 104 425 45 180 1 149 604 2 175 492 644 570Additions 219 235 788Disposals/Expensed dry wells 163 563Acquisition cost 31.03.2013 1 104 425 45 399 1 149 824 2 247 718 644 570Acc. depreciation and impairments 31.03.2014 447 333 41 910 489 243 257 019Book value 31.03.2013 657 093 3 488 660 581 2 247 718 387 551

Acquisition cost 31.12.2013 902 705 48 099 950 804 2 056 100 465 653Additions 46 46 114 896Disposals/Expensed dry wells 73 601

Reclassification -542 047Acquisition cost 31.03.2014 902 705 48 145 950 850 1 555 348 465 653Acc. depreciation and impairments 31.03.2014 263 821 43 977 307 798 144 532Book value 31.03.2014 638 884 4 168 643 050 1 555 348 321 120

Depreciation Q1 2014 2 732 563 3 295

Exploration exp **

Software is depreciated linearly over the software's lifetime, which is three years. Licences related to fields in production is depreciated using the Unit of Production method.

*The Ivar Aasen-field has an obligation related to investments to enable the Edvard Grieg facilites to receive fluids from the Ivar Aasen field. These processing rights are considered as an "Intangible asset" and included with NOK 89.8 million as of 31.03.2014.

Licenses etc.*

Other intangible assets

Q1


Book value 31.12.2012 1 364 097 577 290 51 882 1 993 269

Acquisition cost 31.12.2012 3 163 747 1 232 676 126 062 4 522 486Additions 430 005 90 942 2 209 523 156Acquisition cost 31.03.2013 3 593 752 1 323 617 128 271 5 045 641Accumulated depreciation and impairments 31.03.2013 1 799 650 680 125 79 259 2 559 034Book value 31.03.2013 1 794 102 643 493 49 012 2 486 606

Acquisition cost 31.12.2013 1 647 173 4 399 452 156 375 6 203 000Additions 567 662 9 635 12 314 589 611Reclassification 542 047 542 047Acquisition cost 31.03.2014 2 756 883 4 409 087 168 689 7 334 659Accumulated depreciation and impairments 31.03.2014 3 700 075 98 299 3 798 374Book value 31.03.2014 2 756 883 709 012 70 390 3 536 285

Depreciation Q1 2014 81 206 4 361 85 567 Impairments 1.1 - 31.03.2014 167 373 167 373

Tangible fixed assets Fixtures and fittings, office

machinery Total

Fields under development

**

Production facilities including

wells

**The Johan Sverdrup Field has entered into the development phase in the first quarter 2014. All costs relating to the development are thus recognised as tangible assets and previously capitalised exploration expenditures have been reclassified accordingly from intangible assets.

Capitalized exploration expenditures are reclassified to "Fields under development" when the field enteres into the development phase. Fields under development are reclassified to "Production facilities" from start of production. Production facilities, including wells, are depreciated in accordance with the Unit of Production Method. Office machinery, fixtures and fittings etc. are depreciated using the straight-line method over their useful life, i.e. 3-5 years. Removal and decommisioning costs are capitalized and included as "Production facilities".

Reconciliation of depreciation in the income statement: 2014 2013 2014 2013

Depreciation of tangible fixed assets 85 567 29 818 85 567 29 818Depreciation of intangible assets 3 295 5 180 3 295 5 180Total depreciation in the income statement 88 863 34 997 88 863 34 997

Impairment

The Company has experienced lower than forecast production on the Jette field, which has led to reassessment and reduction of the reserves. Consequently, Det norske has performed an impairment assessment and has recorded an impairment charge in the first quarter of NOK 167 million before tax. The net after tax effect of this charge is NOK 36 million. The impairment is entirely related to tangible fixed assets.

For producing licenses and licenses in the development phase, recoverable amount is estimated based on discounted future after tax cash flows. Future cash flows are calculated on the basis of expected production profiles and estimated proven and probable remaining reserves. The following assumptions have been applied:* discount rate of 8.2 percent nominal after tax* a long term inflation of 2.5 percent* a long term exchange rate of NOK/USD 6.00* oil prices are based on forward curve

The effect of the impairment is to restate previously reported figures as at and for the three months ended 31 March 2014 as follows: Impairment losses NOK 167 million (previously NOK nil), tax income NOK 313 million (previously NOK182 million), deferred tax asset NOK 795 million (previously NOK 665 million), property plant & equipment NOK 3 536 million (previously NOK 3 704 million), other equity NOK 58 million deficit (previously NOK 21 million deficit).

Q1 01.01.-31.03


E 9

Note 5 Payroll and other operating expenses

Breakdown of payroll expenses: 2014 2013

127 559 107 527

-123 000 -106 000Net payroll expenses 4 559 1 527

Breakdown of other operating expenses: 2014 2013

Gross other operating expenses 85 486 73 298

-72 181 -54 090Net other operating expenses 13 305 19 208

Note 6 Financial items

2014 2013

Interest income 12 145 7 202

Return on financial investments 300 488Currency gains 31 981 20 114Fair value of derivatives 2 383Total other financial income 34 663 20 602

Interest expenses 105 120 57 895Capitalized interest cost development projects -28 431 -54 439Amortized loan costs and accretion expence 10 064 9 291Total interest expenses 86 753 12 748

Currency losses 16 847 41 454Realised loss on derivatives 3 683 2 991Fair value of derivatives 2 707Total other financial expenses 20 530 47 153

Net financial items -60 475 -32 097

Share of payroll expenses classified as exploration, development or production expenses, and expenses invoiced to licences

Gross payroll expenses

Q1

Q1

Q1

Share of other operating expenses classified as exploration, development or production expenses, and expenses invoiced to licences

Note 7 Taxes

Taxes for the period appear as follows: 2014 2013

Calculated current year exploration tax refund -148 004 -261 139Change in deferred taxes -157 209 -2 093Prior period adjustments -7 768 818Total taxes (+) / tax income (-) -312 981 -262 415

Calculated tax receivables 31.03.2014 31.03.2013 31.12.2013

Tax receivables included as non-current assets 148 004 261 139Tax receivables included as current assets 1 416 550 1 278 297 1 411 251

Deferred taxes/deferred tax asset: 31.03.2014 31.03.2013 31.12.2013

Deferred taxes 1.1. 630 423 -126 604 -126 604Change in deferred taxes 157 209 2 093 567 368Prior period adjustments 7 768 -602Deferred tax related to impairment and disposal of licenses 192 830Deferred tax recorded towards OCI -3 170Total deferred taxes asset 795 400 -125 113 630 423

A full tax calculation has been carried out in accordance with the accounting principles described in the annual report for 2013. The calculated exploration tax receivable as result of exploration activities in 2014 is recognised as a long-term item in the balance sheet. The tax refund for this item is expected to be paid in December 2015. The calculated exploration tax receivable as result of exploration activities in 2013 is recognised as a current asset in the balance sheet. The exploration tax refund for this item is expected to be paid in December 2014.

Q1


Tax effect of tax losses carryforward:

Tax losses carryforward 27 % -560 954 -375 008 -479 558Tax losses carryforward 51 % -1 136 874 -700 205 -939 713

Temporary differences of tax losses carryforward is incuded in the deferred taxes.

Reconciliation of tax income 2014 2013

27% company tax on result before tax 88 766 76 34051% special tax on result before tax 167 670 144 198Tax effect of financial items - 27% only -20 842 257Tax effect on uplift 62 189 31 025Interest of tax losses carryforward 6 343 4 017Other items (permanent differences and previous period adjustment) 8 854 6 578Total tax income 312 981 262 415

Note 8 Other non-current assets

31.03.2014 31.03.2013 31.12.2013

Shares in Sandvika Fjellstue AS 12 000 12 000 12 000Debt service reserve 257 518 175 865 260 446Tenancy deposit 12 954 12 694 12 954Total other non-current assets 282 472 200 559 285 399

Note 9 Other short-term receivables

31.03.2014 31.03.2013 31.12.2013

Receivables related to deferred volume at Atla 5 256 3 103Pre-payments, including rigs 195 660 33 648 146 977VAT receivable 25 055 21 289 11 444Underlift 43 540 23 318 18 611Other receivables, including operator licences 347 775 259 465 319 283Total other short-term receivables 617 286 337 720 499 419

31.03.2013 31.12.201331.03.2014Applied tax

rate

Q1

For information about receivables related to deferred volume at Atla, see note 10.

Note 10 Long term receivables

31.03.2014 31.03.2013 31.12.2013

Receivables related to deferred volume at Atla 138 078 67 240 125 432Total long term receivables 138 078 67 240 125 432

Note 11 Cash and cash equivalents

Breakdown of cash and cash equivalents: 31.03.2014 31.03.2013 31.12.2013

Cash 5 5 5Bank deposits 810 718 725 104 1 693 314Restricted funds (tax withholdings) 10 346 10 597 15 847Short-term placements 821 069 735 706 1 709 166

Unused exploration facility loan 758 947 435 525 815 991Unused revolving credit facility 3 740 648 1 401 120 3 945 286

Note 12 Share capital

31.03.2014 31.03.2013 31.12.2013

Share capital 140 707 140 707 140 707Total number of shares (in 1.000) 140 707 140 707 140 707Nominal value per share in NOK 1.00 1.00 1.00

Note 13 Derivatives

31.03.2014 31.03.2013 31.12.2013

Unrealized losses interest rate swaps 48 228 48 693 49 453Total derivatives 48 228 48 693 49 453

The item 'Cash and cash equivalents' consists of bank accounts and short-term investments that constitute parts of the company's liquidity.

The physical production volumes from Atla were higher than the commercial production volumes. This was caused by the high pressure from the Atla-field which temporarily has stalled the production from the neighbouring field Skirne. This is expected to continue through 2014 and into 2015. Income is recognised based on physical production volumes measured at market value. This deferred compensation is recorded as a long term or short term receivable, depending on when the income will occur, see Note 9.

The company has entered into three interest rate swaps. The purpose is to swap floating rate loans to fixed rate. These rate swaps are market to market and with changes in market value recognized in the Statement of income.


E 10

Note 14 Accounts receivable

31.03.2014 31.03.2013 31.12.2013

Receivables related to sale of petroleum 13 202 15 399 70 885Receivables related to license transaction 99 271 70 542 1 284Invoicing related to expense refunds including rigs 15 766 511 62 052Total accounts receivable 128 239 86 452 134 221

Note 15 Short-term loans

31.03.2014 31.03.2013 31.12.2013

Exploration facility 680 794 969 819 478 050Total short-term loans 680 794 969 819 478 050

Note 16 Other current liabilities

31.03.2014 31.03.2013 31.12.2013

Current liabilities related to overcall in licences 10 960 31 551 202 037Share of other current liabilities in licences 443 729 503 576 310 673Overlift of petroleum 9 588Other current liabilities 218 565 184 556 273 382Total other current liabilities 673 254 719 684 795 680

Other current liabilities includes unpaid wages and vacation pay, accrued interest and other provisions.

The interest rate is three months' NIBOR plus a margin of 1.75 percent, with a utilization fee of 0.25 percent on outstanding loan up to NOK 2,750 million and 0.5 percent if the utilized credit exceeds NOK 2,750 million. In addition a commitment fee of 0.7 percent is also paid on unused credit.

For information about the unused part of the credit facility for exploration purposes, see Note 11 - "Cash and cash equivalents".

The current facility of NOK 3,500 million was established in December 2012 and the company can draw on the facility until 31 December 2015 with a final date for repayment in December 2016. The maximum utilization including interest is limited to 95 percent of tax refund related to exploration expenses. The lenders have security in the company's tax receivable. The calculated exploration tax receivable as result of exploration activities in 2013 is expected to be paid in December 2014, and will be used to repay this loan. See note 7.

Note 17 Bond

31.03.2014 31.03.2013 31.12.2013

Principal, bond Norsk Tillitsmann 1) 593 240 589 939 592 304Principal, bond Norsk Tillitsmann 2) 1 882 319 1 881 278Total bond 2 475 559 589 939 2 473 582

Note 18 Other interest-bearing debt

31.03.2014 31.03.2013 31.12.2013

Revolving credit facility 2 131 650 1 449 131 1 992 055Unrealized currency 18 639 3 904 44 852Total other interest-bearing debt 2 150 288 1 453 035 2 036 907

1)The loan runs from 28 January 2011 to 28 January 2016 and carries an interest rate of 3 month NIBOR + 6.75 percent. The principal falls due on 28 January 2016 and interest is paid on a quarterly basis. The loan is unsecured.

In September 2013, the company entered into a USD 1 billion revolving credit facility with a group of nordic and international banks. The revolving credit facility can be increased with USD 1 billion on certain future conditions. The company can draw on the facility until September 2018 with a final date for repayment as of September 2018. The facility replaced the company's USD 500 million tranche which originally matured on 31 December 2015.

The interest rate on the revolving credit facility is from 1 - 6 months NIBOR/LIBOR plus a margin of 3 percent, with a utilization fee of 0.5 percent or 0.75 percent based on the amount drawn under the facility. In addition commitment fee of 1.20 percent is also paid on unused credit.

2)The loan runs from July 2013 to July 2020 and carries an interest rate of 3 month NIBOR + 5 percent. The principal falls due on July 2020 and interest is paid on a quarterly basis. The loan is unsecured.


Note 19 Provision for abandonment liabilities

31.03.2014 31.03.2013 31.12.2013

Provisions as of 1 January 975 904 798 057 798 057Incurred cost removal -2 706 -2 056 -36 739Accretion expense - present value calculation 12 920 9 924 42 765Change in estimates and incurred liabilities on new fields 61 970 171 822Total provision for abandonment liabilities 986 117 867 895 975 904

Breakdown of the provision to short- and long-term liabilitiesShort term 156 397 147 375Long term 829 720 867 895 828 529Total provision for abandonment liabilities 986 117 867 895 975 904

Note 20 Uncertain commitments

The company's removal and decommissioning liabilities relate to the fields Jette, Glitne, Varg, Atla, Enoch, and Jotun. Time of removal is expected to be 2018 for Jette, 2014-2016 for Glitne, 2016-2018 for Varg, 2018-2020 for Atla, 2017 for Enoch and in 2018-2021 for Jotun.

The estimate is based on executing a concept for removal in accordance with the Petroleum Activities Act and international regulations and guidelines.

During the second quarter 2012, the company announced that it had received a notice of reassessment from the Norwegian Oil Taxation Office (OTO) in respect of 2009 and 2010. Subsequently the notice has been extended to include 2011 and 2012. At the end of the third quarter 2012, the company responded to the notice of reassessment by submitting detailed comments.

During the normal course of its business, the company will be involved in disputes. The company provides accruals in its financial statements for probable liabilities related to litigation and claims based on the company's best judgement. Det norske does not expect that the financial position, results of operations or cash flows will be materially affected by the resolution of these disputes.

Note 21 Subsequent events

Acquisition of Marathon Oil Norge ASOn June 2, 2014 Det norske announced that the Company had entered into an agreement to acquire Marathon Oil Norge AS for a cash consideration of USD 2.1 billion. The effective date of the transaction is 1 January 2014 and it is expected to close in the fourth quarter 2014, subject to regulatory approvals.

License swapsDuring June, Det norske has entered into two license swaps which increase the company's share in the recently established Ivar Aasen unit.

Det norske entered into an agreement with Spike Exploration to swap a 10 percent interest in licence 554/B/C containing the Garantiana oil discovery for a 20 percent interest in license 457 containing parts of the Ivar Aasen deposit. Moreover, Det norske subsequently signed an agreement with E.ON E&P Norge AS (E.ON) to swap two exploration licenses plus a cash consideration for a 20 percent interest in license 457.

Exploration wellsTwo wells have been completed in the second quarter. Gotama (PL550) and Terne (PL558) have not encountered hydrocarbons and the related capitalized cost has been expensed. As of March 31, 2014, the capitalized costs on these wells were immaterial.

For further information regarding the above matters, reference is made to notices published on the Oslo Stock Exchange.

Unitisation of Ivar AasenIn June, Det norske signed a unit agreement for the Ivar Aasen development on the Utsira High in the North Sea with the licencees in PL001B, PL242, PL457 and PL338. Det norske is operator and will have 34.7862 percent interest in the unit, following completion of the announced swaps mentioned above.

The transaction is partially financed by rights issue of new shares in Det norske, as approved by an Extraordinary General Meeting held July 3, 2014. The remaining financing is based on a reserve-based lending facility of USD 3 Billion. The loan agreement was signed on July 8, 2014.


E 11

22

Note 22 Investments in jointly controlled assets

License - partner-operated: 31.03.2014 31.12.2013 Licence - operatorships: 31.03.2014PL 019C 30,0 % 30,0 % PL 001B 35,0 % 35,0 %PL 019D 30,0 % 30,0 % PL 026B*** 62,1 % 62,1 %PL 029B 20,0 % 20,0 % PL 027D 100,0 % 100,0 %PL 035 25,0 % 25,0 % PL 027ES 40,0 % 40,0 %PL 035B 15,0 % 15,0 % PL 028B 35,0 % 35,0 %PL 035C 25,0 % 25,0 % PL 103B 70,0 % 70,0 %PL 038 5,0 % 5,0 % PL 169C 50,0 % 50,0 %PL 038D 30,0 % 30,0 % PL 242 35,0 % 35,0 %PL 038E ** 5,0 % 0,0 % PL 364 50,0 % 50,0 %PL 048B 10,0 % 10,0 % PL 414 * 0,0 % 40,0 %PL 048D 10,0 % 10,0 % PL 414B * 0,0 % 40,0 %PL 102C 10,0 % 10,0 % PL 450 * 0,0 % 80,0 %PL 102D 10,0 % 10,0 % PL 460 100,0 % 100,0 %PL 102F 10,0 % 10,0 % PL 494 30,0 % 30,0 %PL 102G 10,0 % 10,0 % PL 494B 30,0 % 30,0 %PL 265 20,0 % 20,0 % PL 494C 30,0 % 30,0 %PL 272 25,0 % 25,0 % PL 497 * 0,0 % 35,0 %PL 332 * 0,0 % 40,0 % PL 497B * 0,0 % 35,0 %PL 362 15,0 % 15,0 % PL 504 47,6 % 47,6 %PL 438 10,0 % 10,0 % PL 504BS 83,6 % 83,6 %PL 442 20,0 % 20,0 % PL 504CS 21,8 % 21,8 %PL 453S 25,0 % 25,0 % PL 512 * 0,0 % 30,0 %PL 492 40,0 % 40,0 % PL 542 * 0,0 % 45,0 %PL 502 22,2 % 22,2 % PL 542B * 0,0 % 45,0 %PL 522 10,0 % 10,0 % PL 549S 35,0 % 35,0 %PL 531 10,0 % 10,0 % PL 553 40,0 % 40,0 %PL 533 20,0 % 20,0 % PL 573S 35,0 % 35,0 %PL 535 10,0 % 10,0 % PL 626 50,0 % 50,0 %PL 535B 10,0 % 10,0 % PL 659 *** 20,0 % 30,0 %PL 550 10,0 % 10,0 % PL 663 30,0 % 30,0 %PL 551 20,0 % 20,0 % PL 677 60,0 % 60,0 %PL 554 20,0 % 20,0 % PL 709 40,0 % 40,0 %PL 554B 20,0 % 20,0 % PL 715 40,0 % 40,0 %PL 554C ** 20,0 % 0,0 % PL 724** 40,0 % 0,0 %PL 558 20,0 % 20,0 % PL 748** 40,0 % 0,0 %PL 563 30,0 % 30,0 % Number 27 33PL 567 40,0 % 40,0 %PL 568 20,0 % 20,0 % * Relinquised licenses or Det norske has withdrawn from the license.PL 571 40,0 % 40,0 %PL 574 10,0 % 10,0 % ** Interest awarded in APA-round (Application in Predefined Areas) in 2013. Offers were announced in 2014.PL 613 35,0 % 35,0 %PL 619 30,0 % 30,0 % *** Aqcuired/changed through license transaction or license is split.PL 627 20,0 % 20,0 %PL 667 30,0 % 30,0 %PL 672 25,0 % 25,0 %PL 676S 20,0 % 20,0 %PL 678BS ** 25,0 % 0,0 %PL 678S 25,0 % 25,0 %PL 681 16,0 % 16,0 %PL 706 20,0 % 20,0 %PL 730 ** 30,0 % 0,0 %Number 50 47

31.12.2013


23

Note 23 Results from previous interim reports

2014Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2

Total operating revenues 158 342 254 353 323 563 285 626 80 339 116 797 49 014 69 603

Exploration expenses 109 582 544 400 588 289 270 635 233 738 194 924 402 635 417 140Production costs 42 949 97 602 53 419 57 086 41 512 74 027 45 515 46 154Payroll and payroll-related expenses 4 559 3 854 4 129 28 515 1 527 267 1 280 703Depreciation 88 863 124 021 163 666 147 844 34 997 56 505 15 056 19 780Impairments 167 373 657 597 6 837 1 700 127 155 1 880 953 140 669Other operating expenses 13 305 8 811 25 247 56 619 19 208 21 995 21 140 16 050

Total operating expenses 426 631 1 436 285 841 588 562 400 330 983 474 873 2 366 579 640 497

Operating profit/loss -268 289 -1 181 933 -518 025 -276 773 -250 644 -358 076 -2 317 565 -570 894

Net financial items -60 475 -105 851 -131 089 -48 915 -32 097 -13 763 -45 784 -23 065

Profit/loss before taxes -328 764 -1 287 784 -649 114 -325 688 -282 741 -371 839 -2 363 349 -593 959Taxes (+)/tax income (-) -312 981 -959 137 -490 975 -284 200 -262 415 -324 575 -1 774 462 -376 558

Net profit/loss -15 783 -328 647 -158 139 -41 488 -20 326 -47 264 -588 887 -217 401

20122013


E 12

2

BAKSIDEBAKSIDE

First quarter

reportTrondheim, April 30, 2014

www.detnor.no

E 13

KPMG AS Telephone +47 04063 P.O. Box 7000 Majorstuen Fax +47 22 60 96 01 Sørkedalsveien 6 Internet www.kpmg.no N-0306 Oslo Enterprise 935 174 627 MVA

To the Board of Directors of Det norske oljeselskap ASA

Independent Auditors’ Report on review of Interim Financial Information

We have reviewed the 31 March 2014 condensed interim financial information of Det norske oljeselskap ASA (the “Company”) included on pages 11 to 21 of the First Quarter Report attached as Appendix E to the prospectus, which comprises; the condensed statement of financial position as at 31 March 2014; the condensed statement of income for the three month period ended 31 March 2014; the condensed statement of comprehensive income for the three month period ended

31 March 2014; the condensed statement of changes in equity for the three month period ended 31 March

2014; the condensed statement of cash flows for the three month period ended 31 March 2014; and notes to the interim financial information.

Scope of Review

We conducted our review in accordance with the International Standard on Review Engagements 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the 31 March 2014 interim financial information is not prepared, in all material respects, in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting.

Other Matters

Our report does not extend to the summary financial information for interim periods in 2013 and 2012 included in note 23 which is not a required disclosure under International Financial Reporting Standard 34 Interim Financial Reporting.

As described in the introduction to the note disclosures on, the Company restated its previously issued interim financial information as at and for the three months ended 31 March 2014.

The corresponding interim figures as at and for the three month period ended 31 March 2013 have not been subject to audit or review. The financial statements of the Company as at and for the year ended 31 December 2013 were audited by other auditors whose report dated 11 March 2014 expressed an unmodified opinion on those statements.

KPMG AS

9 July 2014

Mona Irene Larsen

State Authorised Public Accountant

REGISTERED OFFICE AND ADVISORS


Munkegata 26

7011 Trondheim

Norway

Tel: +47 90 70 60 00

Fax: +47 73 53 05 00

www.detnor.no

Joint Global Coordinators and Joint Bookrunners

BNP PARIBAS

16, boulevard des Italiens

75009 Paris

France

DNB Markets

Dronning Eufemias gate 30


N-0191 Oslo

Norway

J.P. Morgan Securities plc.

25 Bank Street

London, E14 5JP

United Kingdom

Skandinaviska Enskilda Banken

Filipstad Brygge 1

P.O. Box 1843 Vika

N-0123 Oslo

Norway

Nordea Markets

Middelthuns gate 17


N-0107 Oslo

Norway

Legal Advisor to the Company

(as to Norwegian law)

Advokatfirmaet BA-HR DA

Tjuvholmen allé 16

N-0252 Oslo

Norway

(U.S legal counsel)

Akin Gump Strauss Hauer & Feld LLP

1333 New Hampshire Avenue, N.W.

Washington, DC 20036-1564

USA

Legal Advisor to the Joint Bookrunners

(as to Norwegian law)

Advokatfirmaet Thommessen AS

Haakon VIIs gate 10

N-0116 Oslo

Norway

(U.S legal counsel)

Linklaters LLP

One Silk Street

London EC2Y 8HQ

United Kingdom

Auditor

KPMG AS

Sørkedalsveien 6

Postboks 7000 Majorstuen

N-0306 Oslo

Norway