07.07.2017 10:42:18 CET
Oslo, 7 July 2017
North Energy ASA's ("North Energy") subsidiary North E&P AS ("North E&P") has signed an agreement with Lundin Norway AS ("Lundin Norway") whereby North E&P will sell its 40% working interest in production licence (PL) 805 to Lundin Norway. The transaction is conditional upon the approval by the Norwegian authorities.
After the sale of PL 805, North E&P has no further licenses on the Norwegian Continental Shelf ("NCS"). Consequently, the Board of Directors of North Energy has in a Board meeting 7 July 2017 decided to discontinue the petroleum activities in its subsidiary North E&P and to seek cash reimbursement of the company's offshore tax losses.
"The business model for small exploration companies has in recent years been challenged by the significant drop in the oil price. The activity level on the NCS has come down, and many players have withdrawn from exploration. With no clear signs of improved market fundamentals, the Board of North Energy believes that it is now in the best interest of the company's shareholders that North E&P exits its petroleum activities on the NCS," says Chairman of the Board, Anders Onarheim.
The net cash position of North E&P, including the value of tax losses carried forward, was approximately NOK 245 million as of Q1 2017. The final proceeds received from the liquidation of North E&P will depend on closing costs, as well as a final assessment by the Norwegian Oil Taxation Office.
In addition to the activities being conducted from North E&P, North Energy also includes a number of investments outside exploration on the NCS, which in the consolidated accounts per Q1 2017 were valued to NOK 114 million. These investments will not be affected by the discontinuation of the petroleum activities of North E&P.
For further information, please contact:
Anders Onarheim, Chairman of the Board, North Energy ASA
(+47) 974 01 511| Email: ao@spitsbergen.as
Knut Sæberg, CEO, North Energy ASA
(+47) 918 00 720 | Email: knut.saeberg@northenergy.no