Noreco summons bond holder meetings
Stavanger, 24 June 2013: Norwegian Energy Company (Noreco) has today summoned bond holder meetings to request waivers in its NOR04, NOR05, NOR06, NOR07, NOR08 and NOR09 bonds.
As previously disclosed, the gearing ratio at the end of the first quarter 2013 exceeded the covenant level specified in the bond agreements. As a consequence of a slower than expected ramp-up of production from its Huntington field asset, the company now considers it possible that it will be in temporary breach with existing covenants for a short period in the second half of this year.
Through 2013, the company expects to make significant reductions in debt level driven both by cash flow from operations and a special tax refund of NOK 722.7 million plus interest, which will be refunded in December. This tax refund, which has been pre approved by Norwegian tax authorities, would alone have reduced both gearing ratios reported for 31 March 2013 close to 4.0, well below the 5.0 covenant level.
On the basis of the above the company has decided to seek consent from bondholders for waivers of the gearing ratio covenants in the NOR04, NOR05, NOR06, NOR07, NOR08 and NOR09 bonds and extension of maturity of the NOR05 bond from 6 December 2013 to 30 December 2013.
On the Huntington field, first oil was achieved in April 2013 with gas exports commencing on 4 June. While reservoir and well performance to date has been excellent, full commissioning of the gas export systems is taking longer time than envisaged due to some initial system issues, which the operator expects will be resolved shortly.
Once resolved, the field is expected to continue ramping up from current production of around 7-10,000 barrels of oil equivalents per day (boepd) gross toward a plateau rate of 30,000 boepd gross. Noreco’s share of this, 6,000 boepd, will give significant contribution to the company’s cash flow.
Performance at the company’s other producing assets are basically in line with forecasts.
For further detailed information, please see the attached summons to the relevant bond holder meetings.
Contact:
Ørjan Gjerde, Chief Financial Officer. Tel.: +47 900 35 738
This information is subject of the disclosure requirements pursuant to section of 5-12 of the Norwegian Securities Trading Act
***
About Norwegian Energy Company ASA
Noreco is an independent Norwegian oil company. The company’s focus is to explore, develop and produce oil and gas in the North Sea region. Since incorporation in 2005, the company has grown through license rounds, successful exploration and acquisitions. Noreco operates in Norway, Denmark and United Kingdom, and employs around 70 oil and gas professionals. Noreco is listed on the Oslo Børs (ticker NOR).
For further information, please visit: www.noreco.com