Norwegian exploration and production firm Noreco is seeking to defer bond and bond interest payments as it continues to face financial pressure over impairments on key production assets.
Noreco has said, according to updated reservoir modeling by operator Dong Energy, its 15% share of the reserves at the Oselvar gas field in the Norwegian sector of the North Sea need to be written down by 50-75%.
The firm is also facing a write-down on its 20% share in the E.ON operated Huntington field, due to production budgets by the operator indicating a “significant reduction” compared to Noreco’s current estimates. This could result in a NOK700 million write down, said Noreco.
In addition, there has been an unplanned shut-down on the Huntington field, due to a restriction in the Central Area Transmission System (CATS), operated by BP.
Noreco said the Huntington development would impact its cash balances through 2015 and onwards, and that the unplanned shut-down created uncertainty whether Noreco would be able to meet its financial commitments also towards the end of 2014.
Now, the firm says it is seeking to defer bond installments and bond interest, due on December 9, and that it continues to explore "all available alternatives."
October 1, chairman Morten Garman and a director, Erik Henriksen, gave notice of immediate resignation from the board of directors.