Noreco Reports Net Loss of USD 42.7 Mln (Norway)

Norwegian Energy Company ASA (Noreco) presented its third quarter 2012 results, with a negative EBITDA of NOK 32 million (5.6 mln USD) and a net loss of NOK 243 million (42.7 mln USD).

The Noreco Group had revenues of NOK 240 million (42.2 mln USD) in the third quarter 2012, an increase of 23 percent compared to third quarter 2011 for continued operations.

Production in the third quarter was 4,384 boe per day, up from 3,428 boe per day for the same period last year (excluding divested fields). The achieved average oil, gas and NGL price adjusted for the cost and income from put options expiring in the third quarter was USD 102 per boe, compared to USD 110 per boe in the third quarter 2011.

Production expenses in third quarter were NOK 63 million, compared to NOK 57 million from the same quarter last year for continued operations. Exploration and evaluation expenses amounted to NOK 162 million, of which NOK 88 million related to the Albert well, which was completed before the reporting date. Payroll expenses were NOK 22 million in the third quarter, down from NOK 51 million in the third quarter last year. This was driven by a lower number of employees, and a reversal of accruals from previous periods. Other operating expenses were NOK 24 million for the third quarter, representing a cost reduction of around 20 percent compared to third quarter last year.

EBITDA (earnings before interest, tax, depreciation and writedowns) in third quarter 2012 amounted to a loss of NOK 32 million, compared to a loss of NOK 45 million in the third quarter 2011 from continued operations.

Write-downs amounted to NOK 323 million for the third quarter before tax. The write-downs are related to the producing fields Oselvar and Enoch, and impaired goodwill allocated to the company’s activities in Norway. The impact of the write-downs on the net result is offset by a corresponding change in deferred tax which amounts to NOK 181 million. Consequently, the net negative impact is NOK 54 million on the net income for the period.

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Press Release, November 23, 2012