Stavanger, 9 August 2012: Norwegian Energy Company ASA (Noreco) today presents its second quarter 2012 results, with a negative EBITDA of NOK 87 million and a net loss of NOK 93 million.
«The second quarter results reflect high exploration cost and an increase in production. We are on track with the plan to triple production this year, and we are looking forward to a high-impact exploration drilling programme in the second half of 2012», says Einar Gjelsvik, CEO in Noreco.
The Noreco Group had revenues of NOK 248 million in the second quarter 2012, an increase of 9 percent compared to second quarter 2011 for continued operations. The increase was driven by gains from the divestment of the Danish oil discovery 7/06 Rau.
Production in the second quarter was 4,317 boe per day, up from 4,053 boe per day for the same period last year (excluding divested fields) as the Oselvar field started producing in April. The achieved average oil, gas and NGL price adjusted for the cost and income from put options expiring in the second quarter was USD 97 per boe, compared to USD 112 per boe in the second quarter 2011.
The Rau discovery in licence 7/06 in Denmark was divested in the second quarter. This resulted in a gain of NOK 23 million which is recorded as Other revenue. The transaction takes place without consideration, and the gain is related to reversal of negative excess value.
Production expenses in second quarter were NOK 46 million, compared to NOK 59 million from the same quarter last year for continued operations and NOK 73 million in the first quarter of 2012. Production expenses were positively impacted by reversal of previous accruals of around NOK 20 million.
Exploration and evaluation expenses amounted to NOK 226 million, reflecting two dry wells completed during the second quarter.
EBITDA (earnings before interest, tax, depreciation and amortisation) in second quarter 2012 amounted to a loss of NOK 87 million, compared to a gain of NOK 11 million in the second quarter 2011 from continued operations.
Write-downs amounted to NOK 108 million related to the Cortina discovery in licence PL471 which was made in 2011. A new evaluation in June 2012 concluded that the discovery at the moment is not likely to have a commercial value.
Net result for the second quarter was a loss of NOK 93 million, equal to the result for the second quarter 2011 for continued operations.
The second quarter report and presentation are attached. The documents are also available for download at www.newsweb.no and www.noreco.com (http://www.noreco.com/).
Noreco will present the results for second quarter 2012 today at 08:30 CET. The presentation will be held by CEO Einar Gjelsvik, and will take place at Shippingklubben, Haakon VII's gate 1, Oslo. The presentation can also be followed by webcast on Noreco's web page www.noreco.com both live and in archived version.
Einar Gjelsvik, CEO, +47 99 28 38 56
Kjetil Bakken, VP Investor Relations, +47 91 88 98 89
Q2 2012 presentation (http://hugin.info/138447/R/1632861/523838.pdf)
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Source: NORECO via Thomson Reuters ONE