Noreco - fourth quarter and preliminary results 2008
Strong operations
Stavanger, 19 February 2009: Norwegian Energy Company ASA (Noreco - OSE:NOR), The oil company Noreco reported strong operational performance in the fourth quarter of 2008.
Stavanger, 19 February 2009: Norwegian Energy Company ASA (Noreco - OSE:NOR), The oil company Noreco reported strong operational performance in the fourth quarter of 2008.
Results
Noreco recorded operating revenues of NOK 541 million in Q4 2008, a 21% increase from Q4 2007. The operational result (EBITDA) was NOK 221 million and the net result - NOK 25 million. The company had a strong cash position of NOK 867 million at the end of 2008.
Increased production and reserves
Noreco's production in Q4 2008 was 14,900 barrels of oil equivalents per day, an increase of 42% from Q4 2007. In December 2008, Noreco set a new record production of 16,100 barrels per day. Noreco added 7.5 million barrels proven and probable (2P) reserves in 2008, giving a reserve replacement ratio of 145%.
Successful exploration program
Noreco had a very successful exploration program in 2008, where 9 of 11 exploration and appraisal wells were successful. In the fourth quarter, a new oil discovery was made and put on production at the Brage field. Noreco was offered 6 licenses in the 25th licensing round in the UK.
- We had a successful drilling program in 2008, and the program continues in 2009 and 2010. This will lead to increased production for the company, says Scott Kerr.
Restructuring of capital structure
Noreco implemented a number of measures to reduce debt and interest costs in 2008. In Q4 2008, the company made a NOK 560 million bond repayment.
Noreco will continue to work the capital structure of the group to be even better positioned for further growth.
Valuable oil hedging program
Noreco realized a price of 58 $ per barrel oil in the fourth quarter, which is higher than the reference price due to the fact that Noreco has oil price put options at 75 and 50 $ per barrel. The value of these options was NOK 547 million at the end of the year.
2009 outlook
Noreco will continue to grow through the extensive activities planned fro 2009. Eight new exploration and appraisal wells with a significant resource potential will be drilled, and the company plans start-up of the oil field Nini East in Q4 2009. Noreco's daily production is expected to be in excess of 14,000 barrels oil equivalents per day.
Detailed information on the Noreco's operational activities is presented in Noreco's 4Q report and in the 4Q presentation.
Q4 report and presentation
The Q4 report and presentation is attached, and is also available at www.noreco.com and www.oslobors.no. Noreco will present the results for Q4 2008 on Thursday 19 February 2008 at 08.30 Norwegian time. The presentation will take place at Felix Konferansesenter, Bryggetorget 3, Oslo. The presentation can also be followed by webcast on Noreco`s web page www.noreco.com or at www.oslobors.no/webcast, both live and in an archived version.
For further information, please contact:
Scott Kerr, CEO (+47 992 83 890)
Einar Gjelsvik, Vice President Investor Relations (+47 992 83 856)