OKEA, a Norwegian oil and gas company, sank deeper into the red in the first quarter of the year affected by lower oil and gas prices and sales volumes resulting in impairments of over $60 million.
OKEA on Tuesday said its operating income during the first quarter of 2020 totalled NOK 551 million ($52.2 million), compared to NOK 764 million ($72.4 million) in the prior-year period.
According to OKEA, the decrease from the previous year was mainly due to reduced volumes sold from Gjøa and Draugen fields and lower oil and gas prices.
The oil company booked a loss of NOK 785 million ($74.4 million)in this year’s first quarter compared to the loss of NOK 9 million ($852,900) in 1Q 2019.
The significant fall in market pricing of petroleum products during the quarter resulted in non-cash impairments of NOK 634 million ($60.1 million) mainly relating to technical and ordinary goodwill.
The NOK weakened significantly against the USD during the quarter which resulted in unrealised FX-losses on the outstanding USD bonds of NOK 518 million partly offset by FX-gains on USD nominated bank deposits.
The company’s total net production in 1Q 2020 totalled 19,099 boepd compared to 19,498 boepd in 1Q 2019.
Erik Haugane , CEO of OKEA, said: “This quarter’s financial statements reflect the largest economic turmoil in hundred years.
“ OKEA has a sound cash position, low production expense per boe across our portfolio and a dedicated organisation that will manage the company through these challenging times for OKEA and the industry”.