Noreco's Production Falls
Operating revenues for Norwegian Energy Company ASA (“Noreco”) were reduced in the fourth quarter 2014 due to low oil production. Net loss after tax was NOK 1.7 billion, impacted by several significant items, including impairments and other financial items.
Operating revenues in the fourth quarter 2014 were NOK 145 million, down from NOK 255 million in the same quarter 2013. Operating income was heavily influenced by low output from the Huntington field, which only produced 616 barrels of oil equivalents per day to Noreco during the quarter, and lower realised oil price.
Total impairments amounted to NOK 570 million after tax, which include NOK 241 million in write-downs after tax on Huntington and NOK 292 million in write-downs after tax on the Cecilie and Nini fields. Partial write-offs of deferred tax assets in Denmark and the UK have also impacted the net results in the quarter by NOK 618 million. Financial expenses include NOK 510 million which is related to default of all bond debt now reclassified to current liabilities.
“The fourth quarter was marked by a series of events and circumstances, which prompted us to accelerate our efforts to build a new financial platform for the company. In early February we presented a restructuring proposal, which we hope that bondholders and shareholders will approve in their respective meetings on 2 and 3 March”, says Tommy Sundt, CEO of Noreco.
In the report for the fourth quarter, the Board of Directors of Noreco repeats that the restructuring proposal represents the best way forward given the circumstances, as the present alternative is bankruptcy.
