Norwegian Energy Company’s (Noreco) Danish subsidiary was in January prevented from making payments for its share of production costs at the Nini field, located in the Danish part of the North Sea, and it was consequently in breach of the licence agreement.
As this situation was not remedied as of March 21, 2015, the other partners may now claim Noreco’s 30 per cent interest in the licence without any consideration, Noreco said in the statement.
As part of the negotiations to agree on an overall restructuring proposal for Noreco, a committee of bondholders stated that their consent would require that the costs and cash flows related to Noreco’s operations in Denmark must be improved and they have instructed the company to not make payments on its Danish licences. As a consequence, one of Noreco’s Danish subsidiaries is currently in breach of its obligations on the Nini-licence, and will until a solution is found only make payments of critical nature.
Since then Noreco and representatives from the bondholders have been, and still are, in a dialogue with the operators and partners in the licences in order to attempt to come to an amicable solution. This work has so far not resulted in an agreement.
The status at the Xana and Cecilie licences in Denmark is similar to that of Nini, albeit the timing is slightly different. Noreco was notified by the licences on February 6 and March 3, respectively that the companies are in breach of licence terms, and that the two licences may be forfeited after 60 days.
Consequently, and in accordance with licence agreements, Noreco is currently cut off from any information from the licences, including production data from the Nini and Cecilie fields and drilling progress in the Xana well.
The Lulita and Huntington fields owned directly or indirectly by Noreco’s Danish subsidiaries are not affected by the current situation, Noreco notes in the statement.
Image: DONG Energy
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