8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): November 23, 2004

Endeavour International Corporation
__________________________________________
(Exact name of registrant as specified in its charter)

Nevada	001-32212	88-0448389
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
1000 Main, Suite 3300, Houston, Texas		77002
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: (713) 307-8700

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01. Completion of Acquisition or Disposition of Assets.

On November 23, 2004, Endeavour International Corporation, through its subsidiary Endeavour Energy Norge AS, completed the acquisition of a majority interest in OER Oil AS (OER), a privately held Norwegian exploration and production company based in Oslo, for approximately US$27.6 million in cash. Following the closing, Endeavour holds the approximately 76 percent interest in OER previously held by Lundin Petroleum B.V.

Endeavour has previously announced that it has entered into agreements to acquire the remaining minority interests in OER. The acquisition of the minority interests is expected to close within 60 days subject to necessary government approvals. The minority interests will be purchased for a combination of Endeavour common stock and cash.


OER’s asset base includes the following:
- A 4.4 percent working interest in the Brage field operated by Norsk Hydro.
- A 2.5 percent working interest in the Njord oil and gas field operated by Norsk Hydro.
- A 49 perce nt working interest in the Agat gas and condensate discovery operated by RWE.
- Exploration upside in the Brage, Njord and Agat areas.
- Tax benefits with an approximate future economic value of US$12 million.

Current production from OER net interests in the Brage and Njord fields is approximately 2,000 barrels of oil per day (BOPD).

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

OER has an outstanding debt agreement with Handelsbanken. The maximum amount of the debt is Norwegian Kroner (NOK) 65,000,000 (approximately US$11 million), of which NOK 57,000,000 (approximately US$9 million) is currently outstanding, and bears interest at the 6-month Norwegian Inter-Bank Offering Rate (NIBOR) plus 1.4%. The debt is repayable in semi-annual installments through January 2006. In addition, Handelsbanken has provided a guarantee of up to NOK 16,000,000 (approximately US$3 million) to the operator of the Brage and Njord fields and the Norwegian Ministry of Petroleum and Energy for the abandonment and decommissioning costs for these fields.

The debt agreement contains customary covenants, including but not limited to, limitations on OER's ability to incur liens, make acquisitions and investments, or sell or transfer assets. Additionally, OER may not permit its book equity to fall below 25%.

The foregoing summary of the terms of the debt agreement is qualified in its enti rety by reference to the debt agreement, as amended, attached hereto as Exhibits 10.1 and 10.2.

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired

The financial statements required by this Item will be filed as soon as practicable, and in any event not later than 71 days after the date on which this Current Report on Form 8-K is required to be filed.

(b) Pro Forma Financial Information.

The pro forma financial information required by this Item will be filed as soon as practicable, and in any event not later than 71 days after the date on which this Current Report on Form 8-K is required to be filed.

(c) Exhibits.

10.1 - Debt agreement between OER Oil AS and Handelsbanken.
10.2 - Amendment to debt agreement between OER Oil AS and Handelsbanken.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Endeavour International Corporation
November 30, 2004	By:	Robert L. Thompson
		Name: Robert L. Thompson
		Title: Chief Accounting Officer

Exhibit Index

Exhibit No.	Description
10.1	Debt agreement between OER and Handelsbanken
10.2	Amendment to debt agreement between OER and Handelsbanken

EX-10.1

Exhibit 10.1

Translated from Norwegian

Handelsbanken
Olav V’s gate

OER OIL AS
P.O. Box 1989 Vika
0125 Oslo

Our ref:	Your ref:	Date:
Finn Ove Arnestad	Rune Skogen	Olso, 12 January 2004

OFFER OF FINANCING TO OER OIL AS

With reference to your application and subsequent discussions we are pleased to offer you the following financing for OER Oil As. This offer replaces previous offers:

Drawing facility of USD 5,000,000

Purpose:	The drawing facility (credit line) will function as a liquidity buffer in the day-to-day operations of OER Oil AS.
Term:	The credit will run for one year at a time and will be renewed subject to an ordinary assessment of creditworthiness.
Interest on debits:	At present, 2.50% p.a., quarterly capitalization, LIBOR-based interest rate, on which the bank’s margin at present is 1.40% p.a.
Commission:	At present, 0.15% per quarter calculated on the basis of the quarterly credit limit. The commission is charged in arrears each quarter.
Credit interest:	At present, 0.40% p.a. annual capitalization.
	The drawing facility (credit line) will apply to your USD account 8396.04.50100.

Debt instrument loan of NOK 65,000,000

Purpose:	The acquisition of OER Energy AS (formerly Aker Energy AS).
Amount of loan:	NOK 65,000,000
Interest rate:	6 months NIBOR with the addition of a margin of at present 1.40 percentage points p.a.

Interest is calculated on a 365/360 days basis and comes due for payment at the end of each interest rate period.

Term:	2 years.
Installments:	Repayment of the loan will be to the following installment plan:
	July 2004: January 2005: July 2005: January 2006:	NOK 12,000,000 NOK 27,000,000 NOK 13,000,000 NOK 13,000,000

Repayment will coincide with the expiry of the individual interest rate period.

Method of payment: Interest and installments will be charged to our account 9046.10.62287.

Banker’s guarantee in the amount of NOK 16,000,000

Purpose:A guarantee for the cost of the clear-up operations at Brage and Njord.
Amount:Up to NOK 16,000,000 adjusted in line with the Consumer Price Index compiled
by Statistics Norway, based on the date on which the guarantee is issued.
Guarantee creditor:Norsk Hydro Produksjon AS and Ministry of Petroleum and Energy.
Term:Until the closure of the fields and completion of the clear-up operation.
Guarantee
Commission:At present 0.35% p.a., which is payable in advance quarterly and will be
charged to your account no. 9046.10.62287, first payment due when the guarantee is
issued.
Foreign exchange facility
Purpose:Hedging foreign exchange risk.
Period:Up to 12 months.
Limit:The equivalent value of NOK 50,000,000.
Costs:
Cost of establishing the finance offered: Registration fee: Charge certificate: Insurance certificates:	NOK 100,000 NOK 1,850 per document NOK 185 per document As required by the insurance company/companies

These costs will be charged to account No. 9046.10.62287.

Security

The following security will be required for all existing and future balances you have or may acquire in respect of Handelsbanken:

• First ranking charge in accordance with Section 4-10 of the Mortgages Act on accounts receivable in the nominal value of NOK 30,000,000, owner OER Oil AS.

• First ranking charge on stocks in the nominal value of NOK 30,000,000, owner OER Oil AS.

• First ranking charge on sums deposited in bank account No. 9046.10.62325 held by OER Oil AS, nominal value NOK 27,000,000. As a consequence of the acquisition of Aker Energy, OER Oil AS will receive repayment of tax installments in December 2004. The Tax Collector has been informed that repayment is to be to account No. 9046.40.62325.

• First ranking charge on sums deposited in bank account No. 8396.04.50100 from time to time, owner OER Oil AS.

• First ranking charge on sums deposited in bank account No. 9046.10.62287 from time to time, owner OER Oil As.

• Charge on OER Oil AS’ insurance policies. Notification from the insurance company to be submitted to Handelsbanken by the end of February 2004.

Security for specific balances:

• For the drawing facility (credit line) in the amount of USD 5,000,000 and the debt instrument loan in the amount of NOK 65,000,000 a surety will be furnished by Lundin Petroleum AB with a nominal value of NOK 50,000,000. Lundin Petroleum AB’s liability as surety will expire on 31 January 2006.

• For the banker’s guarantee in the amount of NOK 16,000,000 a first ranking charge on cash amounts will be furnished to Handelsbanken. The amount will be lodged in a separate account with Handelsbanken. If the guarantee, with adjustment for the Consumer Price Index, exceeds the amount in the charged account, including interest, OER Oil As will deposit an amount sufficient for the security to make up 100% of the guarantee liability of the bank.

Other conditions:

• Ordinary borrowing conditions will apply in the credit line contract and the instrument of debt, cf. appendices.

• Existing and new licence shares may not be mortgaged without Handelsbanken’s consent.

• Handelsbanken is to be supplied with satisfactory documentation concerning the disbursement of paid-up tax in the amount of NOK 27,000,000 including interest.

• Equity capital shall as a minimum be 20%.

• The subordinated loan in the amount of NOK 30,000,000 provided by Lundin Petroleum BV to OER Oil AS shall not be repaid, nor shall interest be calculated on it, without Handelsbanken’s consent. A supplement to the borrowing agreement will be drawn up, stating that the loan ranks below debt OER Oil As owes now or incurs in the future to Handelsbanken. A declaration ceding priority will be approved by the bank before disbursement takes place.

• Lundin Petroleum AB must maintain an ownership stake in OER Oil AS of at least 50.1%.

• Mergers, demergers and operatorships in fields require the approval of the bank.

• OER will report production forecasts cash flow forecasts and quarterly accounts no later than 45 days after the end of each quarter. Annual accounts approved by an auditor will be forwarded to Handelsbanken without unaccounted delay and no later than 180 days after yearend.

• Handelsbanken’s offer of financing must be review and approved by the Board of Directors of OER Oil AS. Duly certified minutes of the Board of Directors’ deliberations on this matter must be submitted as documentation.

The debt instrument loan is granted on the basis of the information furnished by yourselves and on the aforementioned conditions. In the event of major deviations from the underlying assumptions the situation will be reviewed in relation to the debt instrument loan’s provision on premature maturity.

The drawing facility (line of credit) will run for one year at a time and may be renewed annually by the bank on the basis of the submitted annual accounts and other relevant information and preconditions specified by the bank. In the event of major deviations from the assumptions concerning operations, the drawing limit (line of credit) will be reviewed in relation to the provisions on premature maturity, cf. the contract for the credit line.

Financing is granted on the basis of the information furnished by yourselves and the above conditions. For the purpose of arranging security we will need:

• a certified copy of the most recent certificate of registration no more than six months old

• the name of the company in which the mortgaged item is insure, and

• the policy-number

Should you wish to take advantage of our offer, we would ask you to register your acceptance on the attached copy of a letter of acceptance within fourteen days.

Financing will be made available to you as soon as the documents have been signed and the above security has been arranged with the required priority and DnB Gjensidige Nor confirms that the bank has deleted its mortgage in return for the redemption of loans and credits made available to OER Oil AS.

Please contact the undersigned to make an appointment to arrange the formalities. Thank you for you application and we look forward to fruitful cooperation.

Yours sincerely,
Handelsbanken

Rold Bruce (signed)
Bank Manager
Finn Ove Arnestad (signed)

Enclosure: Copy of letter of acceptance

The offer is hereby accepted
OER Oil AS (borrower)

Place/date: Oslo, 26 January 2004

Steinar Hagen (signed)
Signature/signature as per Certificate of Registration

True translation certified

Exhibit 10.2

Translated from Norwegian

Handelsbanken
Olav V’s gate

OER OIL AS
P.O. Box 1989 Vika
0125 Oslo

For the attention of Steinar T. Hagen/Rune Skogen Our ref:	Date:
Morten Roland	18 November 2004

Release/amendment of covenants and approval of a new owner of OER OIL AS

In response to a request by OER OIL AS, Handelsbanken hereby approves the following:

• Repayment by OER OIL AS of the subordinated loan to Lundin.

• Handelsbanken withdraws the requirement that Lundin must own a minimum of 50.1% of OER OIL AS.

• Handelsbanken releases the guarantee in the amount MNOK 50 furnished by Lundin for OER OIL AS.

Handelsbanken approves Endeavour International Corporation as the new majority shareholder of OER OL AS on the basis of the following covenants:

• Existing and new licences shall not be mortgaged without Handelsbanken’s consent.

• The required book equity shall be 25% at all times.

• Future mergers, demergers and operatorships shall be approved by Handelsbanken.

• OER OIL AS shall report to Handelsbanken on a quarterly basis.

• OER OIL AS shall not proceed with individual investments in excess of MNOK 20 without Handelsbanken’s consent. The cost of exploratory drilling forms part of investment expenses.

• New majority shareholders shall be approved by Handelsbanken.

Yours sincerely,
Handelsbanken

Geir Anders Sundnes (signature)
Bank Manager		Morten Roland (signature)
Date/Place:	18 November 2004/Oslo Steinar Hagen (signature)

Acceptance by OER

True translation certified