Oil firm North Energy seeks M&A as exploration fades

North Energy ASA

25/02/2016 11:11

* Difficult to make commercial oil discoveries at current 
prices 
    * Net cash position NOK 188 mln at the end of Q4 
    * Shares down 74 pct over past 2 years 
 
    OSLO, Feb 25 (Reuters) - Norwegian oil explorer North Energy 
 NORTH.OL  believes mergers and acquisitions can help the firm 
weather the current oil market downturn as it becomes difficult 
to make profitable discoveries at today's crude prices, it chief 
executive said. 
    North Energy has yet to make a commercially viable oil find, 
and is going through an extensive restructuring in response to 
adverse market conditions that have made it much harder for 
small oil firms to finance their operations. 
    "What's underpinning this is that the market does not allow 
us to explore more," Chief Executive Officer Knut Saeberg told 
Reuters on the sidelines of the firm's fourth-quarter earnings 
presentation. 
    Saeberg said that he wanted to take advantage of 
opportunities now being priced lower because of the current 
market turmoil. 
    "Our original model of exploring, finding and selling oil 
discoveries is struggling now because of the low oil price. It's 
to survive in a difficult time period." he said. 
    "We want to build North Energy to a stronger company and in 
order to do that we have to expand our horizon," Saeberg added. 
    To counter the 70 percent decline in crude prices since 
mid-2014, the firm reduced its operating costs by 24 percent by 
the end of the fourth quarter compared to a year earlier. 
    At the start of 2016, North Energy had a net cash position 
of 188.3 million Norwegian crowns ($21.77 million), down from 
219.1 million three months earlier. 
    It reported a fourth-quarter net loss of 23.6 million 
crowns, compared to a loss of 28.4 million in the same quarter 
of 2014. 
    Over the past two years, shares in North Energy have fallen 
74.2 percent, included a 6.8 percent drop on Thursday, against a 
0.9 percent rise in the Oslo benchmark index  .OSEBX  in the 
same period. 
 
($1 = 8.6490 Norwegian crowns) 
 
 (Reporting by Henrik Stolen, editing by Terje Solsvik) 
 ((henrik.stolen@thomsonreuters.com; +47 952 79 474; Reuters 
Messaging: henrik.stolen.thomsonreuters.com@reuters.net)) 
 
Keywords: NORTH ENERGY RESULTS/