Norway: NORECO Records Quarterly Net Loss of USD 55.5 Million

Noreco had revenues of NOK 547 million in first quarter 2011, an increase of 14 percent compared to first quarter 2010, driven by higher oil prices which more than compensated for lower production volumes. Production in the quarter was 10,355 barrels of oil equivalents per day (boed), down from 11,375 boed for the same period the previous year.

The achieved oil, gas and NGL prices adjusted for the cost and income from the put options expiring in the quarter was USD 103 per boe, compared to USD 73.5 per boe in first quarter 2010.

Production expenses were NOK 154 million, while exploration costs amounted to NOK 203 million as the Svaneøgle exploration well did not prove commercial quantities of hydrocarbons. In addition, costs related to the Ronaldo exploration well incurred in the first quarter have been expensed as the well after the end of the quarter was concluded to be a dry hole.

EBITDA (earnings before interests, tax, depreciation and amortization) in first quarter was NOK 97 million, compared to NOK 170 million in first quarter 2010. Tax expenses amounted to NOK 140 million, and were impacted by an increase in deferred tax liabilities of NOK 272 million related to the company’s activities in the UK following an increase in the UK petroleum tax rate from 50 percent to 62 percent. Noreco recorded a net loss of NOK 295 million for the quarter (55.54 million U.S. dollars), compared to a net loss of NOK 21 million(3.95 million U.S. dollars) in first quarter 2010.

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Source:Noreco , May 5, 2011;