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North E&P to sell final NCS licence

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Oilfield Technology,

A subsidiary of North Energy ASA (North Energy), 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 from Norwegian authorities.

Following the sale of PL 805, North E&P will have no further licences on the Norwegian Continental Shelf (NCS). Consequently, North Energy has decided to discontinue its petroleum activities in its subsidiary North E&P and to seek cash reimbursement of the company's offshore tax losses.

The net cash position of North E&P, including the value of tax losses carried forward, was approximately NOK245 million as of 1Q17. 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. These investments will not be affected by the discontinuation of the petroleum activities of North E&P.

"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 The activity level on the NCS has come down, and many players have withdrawn from exploration.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.

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