Forms strategic alliance with major US gas player 

Under these agreements StatoilHydro will initially acquire a 32.5% interest in Chesapeake’s Marcellus shale gas acreage covering 1.8 million net acres (7,300 square kilometres) in the Appalachia region of the northeastern USA. StatoilHydro’s share equals approximately 0.6 million net acres (2,400 square kilometres) of this leasehold.

StatoilHydro will pay a consideration of USD 1,250 million in cash and a further USD 2,125 million in the form of a 75% carry on drilling and completion of wells during the period 2009 to 2012. In order to earn this carry, Chesapeake is required to maintain a significant level of drilling activity.

The agreement will cover more than 32,000 leases in the states of Pennsylvania, West Virginia, New York and Ohio. Chesapeake plans to continue acquiring leases in the Marcellus shale play. StatoilHydro has the right to a 32.5% participation in any such additional leasehold.

With this transaction StatoilHydro has acquired future, recoverable equity resources in the order of 2.5-3.0 billion barrels of oil equivalent (boe). StatoilHydro’s equity production from the Marcellus shale gas play is expected to increase to at least 50,000 boepd in 2012 and at least 200,000 boepd after 2020.

In the leaseholdings StatoilHydro will have the same 87% net revenue interest as Chesapeake. StatoilHydro expects a net positive cash flow from 2013.

Helge Lund, President and CEO of StatoilHydro, stated that:
“I am pleased that we today have made a strategically important move by joining forces with Chesapeake which is the leading US gas player. We are establishing a strong platform for further developing our gas value chain business and growing our position in unconventional gas worldwide. Furthermore, we are adding significant resources to our portfolio. The agreement we have entered into with Chesapeake provides us with a solid position in an attractive long-term resource base at competitive terms.”

Mr Lund added:
“This deal adds a major building block to the gas value chain position we have established in the US, the world’s largest and most liquid gas market. This is a significant step in strengthening our US gas position, building on our existing capacity rights for the Cove Point LNG terminal, our gas trading and marketing organisation and the gas producing assets in the US Gulf of Mexico.”

Chesapeake’s Chief Executive Officer, Aubrey K. McClendon, said:
“We are honoured to establish a business relationship with StatoilHydro and are excited about the mutually beneficial nature of our transaction with them. We believe this transaction creates substantial value for both companies and unique opportunities for international growth with one of the leading international oil and gas companies. Jointly we can export our world class unconventional gas technology for further long term growth.”

Both companies believe that the development programme could support the drilling of 13,500 to 17,000 horizontal wells over the next 20 years with a continuous programme using up to 50 drilling rigs. The expected cost for each well is estimated at approximately USD 3.5 million with an ultimate recovery of approximately 560,000 boe per well.

The transaction is expected to close by year end.

Press conference:

There will be a press conference today at 10:00 am CET in StatoilHydro’s offices at Vækerø in Oslo.

Conference call

In addition there will be a conference call with EVP Peter Mellbye and CFO Eldar Sætre at 14:00 CET (08:00 EST).

For participation in the conference call please call:

800 19640 Norway Freephone
+44 (0)20 7806 1955 International
0800 028 1277 UK Freephone
1888 935 4577 US Freephone

Confirmation code: 5721494

Press

VP Media Relations, Ola Morten Aanestad,
Phone + 47 480 80 212

VP communication Natural Gas, Rannveig S. Stangeland,
Phone +47 48 12 59 78/+ 47 51 99 26 42

Public affairs manager, Houston, Kjersti H. Torgersen,
Phone +1 (832) 866 0031

Investor relations

Senior vice president, Lars Troen Sørensen,
Phone +47 90 64 91 44

Vice president, Investor Relations US, Geir Bjørnstad,
Phone +1 (203) 978 69 50

Conversion factors
1 cubic foot (cf)	1 000 British Thermal Units (BTU)
1 cf	0.0283 Standard cubic meters (Scm)
1 Scm	35.314 cf
1 Scm	6.29 barrels of oil equivalents (boe)

Source: Norwegian Petroleum Directorate, Fact book 2008

Overview of unconventional gas resources

Typical unconventional gas reservoirs are tight sands, shale and coal bed methane. These reservoirs are often laterally extensive and with low permeability that produces mainly dry natural gas. Shale gas is formed in fine-grained shale rock. In order to produce shale gas, the use of hydraulic fracturing and horizontal well drilling have been essential. The global unconventional gas resource base is estimated at 5 700 billion barrels of oil equivalent (boe) or 32 000 trillion cubic feet (tcf). (source: NPC Global oil and gas study) The US shale gas reserves are estimated at 700 billion boe (3 800 tcf) and accounts for about 47% of total unconventional gas reserves in North America. It is expected that US unconventional gas capacity will grow sharply over the ten next years.