Noreco reports second quarter 2010 results
(Thomson Reuters ONE) -
Stavanger, 5 August 2010: Norwegian Energy Company ASA (Noreco - OSE:NOR) today
presents its second quarter 2010 results, with EBITDA of NOK 269 million, 59%
higher than in previous quarter, and a net result of NOK -6 million, compared
with NOK -21 million.
Q2 results
Oil and gas production was 13,125 barrels of oil equivalents (boe) per day, up
from 11,375 boe/day in the previous quarter mainly due to increased contribution
from the Siri area fields and strong performance at Brage. Realized oil price
was USD 75.4 per boe. Total revenues for the quarter was NOK 560 million,
compared to revenues of NOK 481 million in the first quarter 2010.
Production expenses were NOK 132 million and included NOK 9 million related to
the Siri shutdown. Exploration expenses were NOK 100 million, mainly driven by
seismic acquisitions to support future exploration drilling. EBIT was NOK 94
million. Net financial items amounted to NOK -121 million. Tax for the quarter
was NOK -21 million.
As previously announced, Noreco in July agreed to sell its 20% share in PL378
for USD 43 million. The company expects to report a gain on this sale of
approximately USD 40 million when the transaction is completed, most likely in
Q3 2010. The transaction is therefore not reflected in the Q2 2010 financial
statements.
Outlook
During the second quarter, production from the Siri area fields has been lower
than Noreco's expectations. This is caused by limitations in the field's gas
handling capacity which were identified after the start-up of the Nini East
satellite field in February. In addition, one of the production wells at Siri
(SCB-1) has been shut in since late April pending repair of a safety valve. The
solution to the gas handling issue is to upgrade a compressor at Siri. Due to
equipment delivery time, the upgrade is currently scheduled for December this
year, and is then assumed to require a shutdown of production from Siri, Nini
and Cecilie for approximately two weeks. For the SCB-1 well the plan is to
replace the subsea control module for the safety valve as well as the jumper
between the subsea tree and the module. This work is scheduled for October this
year due to installation vessel availability. In total, the production issues at
Siri lead to a revision of the company's production estimate for 2010 to
approximately 12.100 boe per day (previously "in the low end of the 13-14.000
range"). The new estimate reflects the current situation and planned initiatives
described above. For the rest of Noreco's producing fields there are only minor
adjustments.
The Oselvar development is progressing on schedule and within budget, and is now
approximately 32% completed. During a shutdown at the Ula host platform this
summer, all planned work in preparations for tie-in to the Oselvar module (which
is currently under construction and will be installed next summer) was
completed.
For Huntington, a letter of intent was signed with Sevan Marine for leasing the
Sevan Voyageur FPSO, and a draft field development plan (FDP) has been
submitted. Additional contracts required for the development will be signed and
a final FDP will be submitted to UK authorities when the FPSO contract is
completed.
For the Nemo discovery, a concept selection has been made for a subsea tie-back
to the Pierce field on the UK continental shelf. Invitations to tender for the
development have been sent out with planned sanction of the project in Q4 2010.
Following the sale of its 20% share of PL378 containing the Grosbeak discovery
and the Gnatcatcher prospect, Noreco's exploration drilling program for the rest
of 2010 consists of three wells. The first is Zidane-1, which is currently being
drilled. The well is operated by RWE Dea and results are expected later in Q3.
Drilling at the Noreco-operated Svaneøgle prospect will most likely commence
mid-Q4, pending rig availability. The Lundin-operated Barchan well is also
expected to be spudded in Q4.
Second quarter report and presentation
The second quarter report and presentation are attached. The documents are also
available for download atwww.newsweb.no and www.noreco.com.
Noreco will present the results for second quarter 2010 today at 08:30 CET. The
presentation will be held by CEO Scott Kerr, and will take place at Felix Kurs
og Konferansesenter, Bryggetorget 3, Oslo. The presentation can also be followed
by webcast on Noreco's web pagewww.noreco.com both live and in archived version.
Contacts:
Scott Kerr, CEO, +47 992 83 890
Kjetil Bakken, Investor Relations Manager, +47 91 889 889
This information is subject of the disclosure requirements acc. to §5-12 vphl
(Norwegian Securities Trading Act)
[HUG#1435947]
Noreco Q2 2010 Presentation:
http://hugin.info/138447/R/1435947/381136.pdf
Noreco Q2 2010 Report:
http://hugin.info/138447/R/1435947/381135.pdf
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Source: NORECO via Thomson Reuters ONE
Unternehmensinformation / Kurzprofil:
Datum: 05.08.2010 - 07:01 Uhr
Sprache: Deutsch
News-ID 38763
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