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Exploration Update - Appointment of Stellar Energy Advisors to commence a farm-out process on Blocks SM-1035, SM-1036 and SM-1100 offshore Brazil


London - October 2010

Panoro Energy ASA ("PEN", OSE ticker code), the independent oil and gas company with assets in West Africa and Brazil, is pleased to announce appointment of Stellar Energy Advisors to commence a farmout process on its three shallow water exploration licences SM-1035, SM-1036 and SM-1100 in Brazil. These licenses are held by Panoro’s wholly-owned subsidiary, Norse Energy do Brasil, and were awarded in March 2008 as part of Brazil’s ninth oil and gas licensing round. Panoro holds a 50% interest and is operator of all three licenses. Panoro is offering selected companies the opportunity to acquire a significant equity in these blocks. Operatorship may also be available to qualified companies. The farmout process will be coordinated through Stellar Energy Advisors and a data-room is scheduled to be open between October 11, 2010 and November 19, 2010.

The first period minimum work commitment for complete 3D coverage of the blocks (totalling 520 sq. km) has been met by acquisition of a PGS multiclient survey in 2009. The resulting data is of very high quality and has recently been reprocessed to PSDM (Pre-Stack Depth Migration). Four primary post-salt prospects have been identified in the three blocks. Following the finalisation of the technical work, Panoro Energy estimates the licenses hold gross unrisked volumes of 880 MMBOE (best estimate) with an upside case of 1,100 MMBOE. The pre-salt section in the Exploration Blocks is well imaged by the recent PGS PSDM data. Leads have been identified and are the subject of current work. Panoro is seeking a partner or partners to commit to drilling a well on each of the exploration licences in order to meet the terms of the second period minimum work commitment. The second period minimum work commitment is required to be completed by March 2013.

The exploration licences are located in three highly prospective proven play fairways: the Lower Cretaceous Guarujá Carbonate fairway, the Upper Cretaceous Itajái /Ilhabela/ Juréia sandstone fairway and the Tertiary Marambaia sandstone fairway. Five oilfields discovered in the Guarujá (Tubarão, Estrela do Mar, Coral, Caravela and Cavalo Marinho) are located 75km southwest of the Exploration Blocks and are together referred to as the “BS- 3” fields. Panoro has an interest in three of these fields. Recent discoveries have also been made in the Upper Cretaceous play and include Piracucá (20km northeast) and Guaiamá (70km northeast). Both fields have been declared commercial by Petrobras (Operator) in 2009. In addition, Tiro and Sidon are two Tertiary discoveries recently made by Petrobras 40 km to the southwest.

Panoro’s objective in the farmout will be to assign a part of its 50% interest in the SM-1035, 1036 and 1100 Blocks to the farminee(s) in exchange for the farminee(s) funding a percentage of the past costs, as well as a percentage of the forward work program costs including one exploration well per licence.