Norwegian Energy Company (Noreco) in October announced it had commenced a broad review of its strategic alternatives to enhance shareholder value. Through this review, Noreco and its advisors have been in dialogue with a number of interested parties and examined different structural alternatives, including mergers and sale of all or parts of the company.
After a thorough evaluation of such alternatives and the offers and interests received, and considering the substantial value creation potential in the company's portfolio together with the significant improvements in market fundamentals for oil, the board has concluded that at this point in time a sale of all or parts of the company would not represent the most value creating alternative for the company and its shareholders.
Noreco is currently producing around 10,000 barrels of oil equivalents (boe) per day from eight fields in Denmark and Norway. Next year the company will add significant new production from ongoing field developments. This will broaden Noreco's portfolio of producing fields, and will also under the current oil price environment provide the company with very strong cash flow and an improved financial position.
The company has a significant exploration program underway which this year will test a risked resource potential of close to 100 million boe, representing a substantial value creation potential. The company also has a significant portfolio of discoveries which will be further de-risked and progressed towards development decisions.
Noreco will continue to pursue monetization of individual assets or asset packages with interested parties as part of its ordinary course of business.
Noreco also announced that Scott Kerr has decided to step down as Chief Executive Officer (CEO) of the company.
"The years in Noreco have been very exciting, and at times also challenging. We have now completed an extensive strategic review and concluded that Noreco will continue as an independent E&P company. At this crossroads I have decided to step down," said Scott Kerr.
"Scott Kerr has been heading Noreco since the start in 2005, and he has been instrumental in developing the company into a respected industry player with a strong portfolio and a highly competent staff. We wish Scott the very best as he moves forward to other challenging ventures," said Noreco's chairman Lars Takla.
The board has appointed Mr. Einar Gjelsvik (38) as acting CEO. Gjelsvik has been with Noreco since 2006, most recently as Chief Operating Officer. He has also been the company's Vice President for Strategy and Investor Relations. Before he joined Noreco, Gjelsvik held various positions in BP. Gjelsvik holds a MSc in Business Administration & Strategic Management, and a MSc in Chemical Engineering.
Mrs. Rebekka Glasser Herlofsen (40) has been appointed as Chief Financial Officer (CFO). Herlofsen has been a member of Noreco's board since 2009, but will step down from the board in connection with this appointment. She has broad experience as a board member in several companies, as well as from management positions in BW Gas and Enskilda Securities. Herlofsen is replacing Mr. Erik Borg who has served as acting CFO since February. Borg will continue as Finance Manager in the company.
Mr. Kjetil Bakken (39) has been appointed as Vice President Strategy & Investor Relations. Bakken comes from the position as Investor Relations Manager for the company, and his previous experience includes equity research in Fondsfinans and investor relations in Norsk Hydro. He is replacing Mr. Rune Martinsen, who has accepted a position as Operations Manager for Centrica in Norway. Martinsen has been with Noreco since the company was founded and has held several management positions in the company.