Norwegian oil company Noreco is exiting an offshore licence that contains the Huntington oil field, located in the UK North Sea.
To remind, in November 2015, Noreco was served a notice of default under the Joint Operating Agreement (JOA) governing the Huntington licence.
The default related to non-payment of a cash call under the JOA, and implied that Noreco would no longer receive revenues from production on the Huntington field.
Furthermore, as Noreco Oil UK would not remedy the default, the JOA specified that the remaining partners were entitled to exercise forfeiture rights in respect of Noreco Oil UK’s 20% interest in the licence on a pro-rata basis at the end of a 45 day period.
Noreco reported on Monday that its UK subsidiary, Noreco Oil UK, has now been served formal notice by the license partners, E.ON UK E&P Limited and Premier Oil, that they will exercise their rights to acquire Noreco’s participating interest in the Huntington license for no consideration, in accordance with their rights under the JOA.
Once Noreco’s interest has been acquired, the interests in the field will be as follows: E.ON E&P UK Limited, operator: 31.25% – Premier Oil UK Limited: 50% – and Iona UK Huntington Limited: 18.75%.
Huntington field started producing oil in 2013.
In addition to exiting Huntington licence, Noreco’s one other subsidiary, Noreco Norway, in December 2015 entered into a sale and purchase agreement (SPA) with Djerv Energi for the sale of its exploration licence interests, organisation and management systems.
In addition, Noreco Norway entered into a sale and purchase agreement to transfer its 4.36% participating interest in the Enoch licence, offshore Norway, to CapeOmega AS.
Once complete, the proposed transactions will lead to a subsequent ceasing of all of Noreco Norway’s petroleum activities.
Offshore Energy Today Staff