North Energy Looks to Cut Cost after Dry Wells

Norwegian junior oil firm North Energy announced Wednesday that it will be looking at further cost-cutting measures due to two dry wells and "persistently difficult market conditions".

The firm drilled two wells during the second quarter, but neither of these – the Zumba prospect in the Norwegian Sea and the Haribo prospect in the North Sea – were found to contain commercial hydrocarbons.

North Energy posted a net loss of NOK 34 million ($4.1 million) for the second quarter, compared with a NOK 29.1 million ($3.5 million) loss in 2Q 2014. This related primarily to exploration and licence costs of roughly NOK 25.6 million after tax. The company had a net cash position of NOK 261 million ($31.3 million) at 30 June, including tax receivable less exploration loan debt.

"Given the difficult market conditions facing the industry and the fact that we're still seeking our commercial breakthrough, we must as a responsible company consider further measures to reduce costs," North Energy Acting CEO Knut Sæberg said.

"At the same time, our threshold for taking on future investment commitments is being raised. We'll be guarding our cash position well."

Earlier this month the company announced the spud of a new well on the Tvillingen South prospect in the Norwegian Sea, while another well is expected to spud later this year on the Ørnen prospect in the Barents Sea.

"Tvillingen South is a candidate for a possible tie-back to Kristin should a discovery be made, while Ørnen represents a substantial oil prospect in the Barents Sea," Sæberg said.

Have a news tip? Share it with Rigzone!


Click on the button below to add a comment.
Post a Comment
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.


Our Privacy Pledge

More from this Author
Rigzone Staff
e-mail us at
 -  Aker Solutions to Buy Brazilian C.S.E (Oct 21)
 -  Sea Trucks Group Secures Work Offshore... (Oct 21)
 -  Shell Divests Non-Core Oil, Gas Proper... (Oct 21)
 -  Petrofac Appoints New CFO (Oct 21)
 -  Wheatstone LNG Development Start-Up in... (Oct 20)

Most Popular Articles

From the Career Center
Jobs that may interest you
Well Monitoring Specialist
Expertise: WellSite Supervisor
Location: Houston, TX
Chief Mechanic (6th Gen Drillship)(Contract)
Expertise: Rig Mechanic
Location: Houma, LA
ET (Deepwater Drillship)
Expertise: Rig Electrician
Location: Houma, LA
search for more jobs

Brent Crude Oil : $50.79/BBL 1.30%
Light Crude Oil : $49.96/BBL 1.10%
Natural Gas : $2.77/MMBtu 2.12%
Updated in last 24 hours