Norway’s North Energy has posted a net loss of NOK 35.6 million ($4.78 million) for the first quarter of 2015 compared with NOK 27.89 million ($3.75 million) net loss in the first quarter of 2014.
The company says that this is related primarily to exploration and licence costs of roughly NOK 25.8 million after tax.
North Energy is financed with an equity of NOK 404.5 million and had a net cash position of NOK 294 million at March 31, 2015 including tax receivable less exploration loan debt.
According to the press release, the company initiated an extensive plan to reduce costs in the business. At the same time, the strategic review initiated by the board continued with the aim of manifesting inherent value in the company.
“Our restructuring programme is on schedule,” confirms Knut Sæberg, acting CEO of North Energy. “A substantial reduction in our cost base will be achieved. At the same time, the organisation is building more integrated technical and commercial teams by concentrating activities in Tromsø and Stavanger.”
Active second half of the year
North Energy participated in a single exploration well during the first quarter – Tvillingen South in PL 510 in the Norwegian Sea. However, this operation was terminated as a result of technical problems, and the partnership is now assessing a new well in the licence during the second half. North Energy could therefore be involved in a total of four exploration wells in the July-December period.
“We face a very active second half,” says Sæberg. “The exploration programme of three-four wells has the potential to create substantial value for the company. At the same time, we recognise that exploration is a risky business. That makes it crucial to continue work on maturing quality prospects for 2016. The search for our commercial breakthrough is continuing unabated.”
North Energy recently relieved its CEO Erik Karlstrøm of his duties saying that he “no longer has the trust of the Board”. Karlstrøm was replaced by Knut Sæberg as acting CEO while the Board is evaluating candidates for his replacement.