1. General information

The macro environment is favourable for the energy sector despite the present difficult general economic environment. Oil and gas will remain the main source of energy, the markets are reasonably well balanced and a stable growth pattern is foreseen for the next coming 5 - 10 years. Thus the E&P spending is expected to increase going forward and new technology will be needed in the search for, production of and distribution of energy.

Energy Venture is an independent classic sector venture fund based in Norway. The fund will specialize its investment activities in high growth technology companies within the energy sector. Main focus will be on upstream E&P technologies, but consideration will also be given to mid- or downstream technologies as well as to power and environmental technologies for the energy business. Target companies will be located in the North Sea region, but will preferably have international operations.

Energy Ventures completed its first closing early June 2002 with a committed capital of NOK 205 million. A second closing is planned for in the autumn.

2. Investors, partners, network and management

The lead investors include Ferd AS, Gjensidige Nor, SpareBank 1-Liv and Umoe Invest AS.

Important co-operation agreements that will add significant value to the fund have been signed between the company and Ferd AS, Umoe Invest AS and BP.

Energy Ventures enjoys a strong international as well as domestic financial, industrial and R&D network.

The company has a first class management team with exceptional industry, technology, and investment and transaction experience. The team is headed by Ole Melberg as Managing Partner who is supported by Helge Tveit and Helge Hellebust as Investment Managers. The three have a combined relevant experience of in excess of 50 years form various jobs within the energy.

3. Technology and investment theses

New technologies and smart application of same are key drivers for investment, improved performance, productivity gains, cost reductions and the opening of new territory for E&P activities. The North Sea region is a breading ground for innovative new technologies.

The fund will invest in high growth North Sea based technology companies that successfully markets and sells proprietary or unique technology products or solutions to the international market.

Interesting technologies include new advances within i) seismic activities, ii) reservoir modelling, monitoring and management, iii) drilling, smart wells and well completion solutions, iv) sub sea and deep water technologies, v) IT based communication and visualization and simulation processes, techniques and products, vi) production technologies, vii) power and viii) new technologies providing for cleaner production, distribution and use of petroleum resources.

The portfolio companies, in which the fund will invest, will typically be through their start-up phase and into an early stage of commercialisation of their products and services headed for a period of strong growth.

4. Structure, etc.

Energy Ventures is organized as a Norwegian limited liability company (Silent Partnership / stille selskap) with Energy Venture a.s as the General Partner and Energy Ventures IS as the investment fund. The chosen structure is very flexible, robust and tax efficient for the investors and is well suited for international investors too. Capital will be called upon when needed and distributed to the investors immediately upon realization of the individual investments. The management is supported by an Investment Committee, which will make all the investment decisions based on recommendations from management. Other bodies include the Board and the Advisory Board where you will find persons with expert knowledge and experience that the management will be able to draw on.

All elected and appointed company officers and its management have outstanding industrial and financial networks that will be used extensively to secure the best possible performance for the fund.

5. Size, conditions, etc.

The fund was initially closed with a committed capital of NOK 205 million at its first closing and is now in operation. A second closing is foreseen in the autumn 2002. The fund is targeting NOK 325 - 350 million if the state fund, Argentum Fondsinvesteringer AS, decides to invest in the fund and NOK 225 - 250million without.

The minimum committed capital for each investor is NOK 5 million.
The financial objective is to achieve an IRR of 25 % or above on the invested capital. The investors will upon realizations receive all of the money back plus a hurdle rate of 8 % on their investments prior to any distribution to the General Partner. Proceeds over and above will be distributed 80 % to the investors and 20 % to the General Partner.

The General Partner will charge the partnership an annual management fee of 2 % on the committed capital to cover its expenses.

Energy Ventures is a closed end venture capital fund with a fund life of seven years, which can be extended by 1 + 1 year should the investors so desire. The investment period is expected to be 2 - 4 years, the average holding period of the portfolio companies 3 - 5 years and the realizations may commence 2 ½ - 3 years into the life of the fund. When the fund is fully invested, it is expected that approximately 40 % of the committed capital will be left for follow-on investments.

Procorp ASA (contact persons Nigel Wilson and Tore Valderhaug) is our placement agent. Deloitte Touche Law, Olso (contact person Tore Paulshus) our legal advisor and Ernst & Young, Stavanger (contact person Hilde Krogh) our auditors.

6. Summary

Energy Ventures is fortunate in that it can rely on a steady and high quality deal-flow. Which it will gain access to through its management's, board's and Advisory Board's extensive industry and financial networks, its investors, BP and not the least the deal-flow originating from its partners, Ferd Venture and Umoe Invest, which will direct all of their in-coming investment possibilities that fall within Energy Ventures investment criteria to the fund.

The macro environment is favourable for the sector and very poor for the economy in general a combination which the management believes will both create a situation where the fund will get several good and moderately priced investment proposals to consider and at the same provide an excellent timing for making sound investments.

If you need further information please do not hesitate to contact us.

Phone: 00 47 51 84 12 95, web address: www.energyventures.no .

Or use the telephone.

Our direct lines and mobile cell phones are:
Helge Tveit (00 47 51 84 12 97 / 00 47 934 12 468)
helge.tveit@energyventures.no
Helge Hellebust (00 47 51 84 12 98 / 00 47 932 02 550)
helge.hellebust@energyventures.no
Ole Melberg (00 47 51 84 96 / 00 47 952 26 030.
ole.melberg@energyventures.no

Stavanger 28.06.2001