Norwegian Energy Company (Noreco) has published its fourth quarter 2022 and year-end results. The combination of excellent operational performance throughout 2022 and a supportive commodity price environment means that Noreco has been able to deliver strong financial results across the last 12 months and ends the year in a robust position.
- Fourth quarter hydrocarbon production of 26.9 mboepd, and full year production of 26.7 mboepd
- Quarterly revenue of USD 230 million and USD 967 million for 2022 compared to USD 565 million in 2021
- EBITDA in Q4 of USD 140 million, with full year of USD 611 million versus USD 250 million in the previous year
- Successful completion of the final offshore installation campaign on Tyra II
- Final Investment Decision (FID) made on two infill wells in the Halfdan North East area
Net hydrocarbon production for the quarter of 26.9 mboepd. This is at the top of the range of the quarterly guidance and in-line with the revised annual production forecast which was increased several times during 2022. The overarching strong production trend of 2022 continued during the final quarter and was further strengthened by an exceptional contribution from the Halfdan hub which had a 95% uptime following the planned shutdown of the NOGAT pipeline in the previous quarter.
The Tyra Redevelopment project continued to progress with the successful completion of the final offshore installation campaign in October. The campaign included an offshore lift of the 17,000 metric tons heavy process module (the 'TEG') and two bridges and the flare tower. Later in the quarter the project met hook-up- and commissioning milestones with TEG safe access and temporary power achieved, and the TEG crane in operations. In December, the partners in the Danish Underground Consortium (the "DUC") took Final Investment Decision ('FID') on two infill wells in the Halfdan East area with expected gains of approx. 2.9 mmboe net to Noreco, of which c. 50% is gas.
The financial result for the fourth quarter shows a continued strong development with revenues of USD 230 million and EBITDA of USD 140 million, and USD 967 million and USD 611 million for the full year respectively. Cash flow from operating activities was USD 84.4 million in the fourth quarter and USD 561.0 million for the full year with total liquidity of USD 468 million by year end. With the objective to simplify the capital structure following a significant financial strengthening, the Company successfully refinanced the convertible bond NOR13, which originally had a mandatory conversion to equity in November 2023, and NOR13 was exchanged into a new USD 208 million convertible bond loan, NOR15, with revised terms and a later and more flexible conversion date in 2025.
'While 2022 was a year of significant volatility, Noreco performed strongly throughout. Our focus on maximising the performance of our producing assets has been extremely rewarding, allowing us to report largely flat production year-on -year at a time of strong oil and gas prices. Our long-term value proposition continues to grow, with the FID in Q4 of the first two of seven infill wells planned during 2023 and 2024. These short-cycle opportunities support the forecast long-term production profile we are publishing today that will see Noreco produce over 55mboe/d in 2025 based on the operator's long-term plan. As we think about Noreco's long-term role in the Energy Transition, we are also pleased to announce that we have broadened our CCS optionality with an investment in CarbonCuts, an early-stage company progressing the feasibility study of onshore CO2 storage in Denmark. Beyond the growth we have already experienced during the last 12 months, 2023 will see that trajectory continue. Tyra II continues to progress towards first gas by the end of the year, having significantly de-risked during 2022 and we eagerly look forward to the step -change in cashflow generation that the project will allow us to deliver', said Euan Shirlaw, Chief Executive Officer of Noreco.
The report and investor presentation may be downloaded from the Company's website www.noreco.com or www.newsweb.no.