LIME PETROLEUM TO ACQUIRE KUFPEC’S 10% INTEREST IN THE REPSOL-OPERATED YME FIELD IN NORWAY – COMPLETION

23 Dec 2022 12:07 CET

Unless otherwise defined, capitalised terms in this announcement shall have the
same meaning given to them on Lime Petroleum AS’s announcement and press release
dated 10 August 2022 (the “Announcement and Press Release”), in relation to the
Company’s acquisition of a 10% interest in the Repsol-operated Yme Field on the
Norwegian North Sea, for a post-tax consideration of US$68.053 million from
KUFPEC Norway AS (“KUFPEC”) (the “Acquisition”).

The board of directors of Lime Petroleum AS (“Lime” or the “Company”) refers to
the Announcement and Press Release and wishes to announce that the Acquisition
had been completed on 23 December 2022 (the “Completion”).

The Completion, in agreement with KUFPEC, was concluded with an initial payment
of US$55 million on 23 December 2022 and a deferred payment of the balance,
including the settlement costs. The Company has already secured necessary
funding to pay the deferred payment no later than 30 working days after the
Completion.

Pursuant to the Completion, which will have an effective date from 1 January
2022, Lime now holds a 10% interest in the Yme Field.


TRADING UPDATE

Operational review

Brage update
Production from the Brage Field has been stable in 2022 with a mid-December
production net to Lime of some 900,000 boe. The as produced is ~23% short of
the 2022 forecast. The shortfall is due to several factors, including a dry
infill well earlier in 2022, and a lag in getting production levels back up
after a scheduled maintenance stop in September. In particular, gas production
has taken time to return to pre-maintenance stop levels, however, gas production
levels are rising, and we expect them to reach pre-stop levels in the near
future.

The drilling program on the Brage field is progressing according to plan.
Currently a well is being drilled in the Taliskar discovery. The well will
further appraise the discovery and will from summer 2023 be used as a producer.
The well, when completed, will have a major impact on production levels. In
2023 three additional infill wells will be drilled, one of which will test an
exploration target on the southwestern flank of the field.

OKEA has, as of 1 November 2022, taken over Operatorship from WintershallDEA.
The transition has thus far progressed smoothly, and we welcome OKEA in as the
new Operator. Thus far in December, the production level is averaging ~2,150
boepd net to Lime. According to Lime Management, Brage holds some 5.3 mill bbls
2P reserves and 5.7 mill bbls 2C resources, net to Lime.

Lime has ~34% share in the Brage field.

Yme update

The transaction between Lime and KUFPEC for the purchase of 10% in the Yme field
will close on the 23rd of December 2022.

The Yme field is currently in a commissioning phase. Work has been on-going
throughout 2022 to phase in wells for production. This includes drilling both
from the production rig (Inspirer) on the main structure at Yme and from the
Valeris Viking on the satellite structure. During November, three wells were
completed and handed over to the production department, giving a total of seven
(7) wells either in production or ready for production. The new wells will go
through a clean-up phase. Regular production from these wells is expected in
January 2023. Production levels in mid-December are at ~13,000 bbls, and we
expect production levels to fluctuate somewhat as new wells are cleaned up,
tested and phased in.

The commissioning phase at Yme has been challenging and the field has
experienced several shutdowns during 2022. The production levels are now
increasing, and Production Efficiency (PE) is rising steadily from 50% in
October to 70% in December. The Operator indicates PE will gradually increase
through 2023.

Drilling on the satellite structure (Valeris Viking) will be completed on
schedule in December 2022. Drilling on the main field (from Inspirer) is
delayed. A workover on an existing well will be completed in January, and two
wells will be drilled during the spring of 2023.
We expect Yme to be on plateau production in Q2 2023 forecasted at ~35,000 bopd.
Average production rates net to Lime are forecast to be 2,900, 2,900, and 1,900
bopd respectively in 2023, 2024 and 2025 according to RNB figures. Lime has net
2P reserves of 5.5 mmboe in Yme.

Lime will hold a 10% share in the Yme field after completion.

Shrek, Fogelberg and Falk

The licensees in Shrek (in PL838) and Fogelberg (PL433) have decided that PDOs
(plans for development and operation) will not be submitted in 2022. The
Fogelberg license (PL433) will be relinquished.

Shrek (in PL838) will be considered with another development solution, and the
license partners are currently reviewing further exploration opportunities
within the PL838 license. Currently there is no basis for including Capex at
Shrek during the term of the bond.

The PL1125 license partnership has found that there is not a strong basis to
develop the Falk discovery as a stand-alone field. Lime is working on maturing
further prospects within the license to add material volumes to a potential Falk
development.

Iving/Evra

Lime farmed into the PL820 S license with the Iving and Evra discoveries earlier
in 2022. During the course of the fall, Lime has conducted a feasibility study
on behalf of the license for further appraising and developing the Iving and
Evra discoveries. Vår Energi is now the Operator, and Lime will work closely
with the Operator on further maturing the discoveries. This may result in
drilling operations in 2024 or 2025.

Lime holds a 30% interest in the license.

Gjengalunden

Drilling operations on the Gjegnalunden prospect will start early January 2023.
The prospect is located just west of the Ivar Aasen field. Lime deems this well
as an exciting well with great potential. The results of the Gjegnalunden well
will further derisk the Orkja prospect in the neighboring PL818 license, in
which Lime has a 30% interest. AkerBP is the Operator with 80%.

Lime has a 20% interest in PL867/B.

Financials

Rex International Investments Pte. Ltd. injects as a Subordinated Loan NOK
50,000,000 in Lime in regard to the transaction with KUFPEC.

Lime received NOK 259m in tax refund in 2022. The company estimates that they
will receive a tax refund of approximately NOK 480m in 2023.

Further, ABG Sundal Collier ASA (“ABGSC”) has been engaged by the Company to
raise NOK 250 million (approximately US$ 25.5 million) by utilising the option
to tap the Lime Petroleum AS FRN Senior Secured Bond Issue 2022/2025 (ISIN
NO0012559246) (the “Bond”) in accordance with the loan agreement for the Bond
(the “Tap Issue”). The Tap Issue will be raised during the month of January
2023, with ABGSC as the Sole Bookrunner. Details regarding the Bond can be found
in the Company’s press releases dated 22 June 2022 and 29 June 2022.

More information:
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579136_ANNOUNCEMENT.pdf