Noreco Oil UK revealed Monday that it has been forced to exit the North Sea’s Huntington field, after it defaulted on a cash call under the joint operating agreement governing the asset.
The company received a notice from its license partners - E.ON UK E&P Limited and Premier Oil Plc – stating that they intend to exercise their rights to acquire Noreco Oil UK’s participating interest in the Huntington license for no consideration, in accordance with their rights under the Huntington license JOA. The Norwegian Energy Company ASA subsidiary was served with a notice of default, relating to the non-payment of a cash call under the Huntington license JOA, back in November 2015.
The forfeiture is expected to result in a loss of an estimated NOK 60 million ($7.09 million), according to Noreco. The total loss for Noreco related to the investment in Huntington will, after this, amount to approximately NOK 590 million ($69.73 million). The company had been trying to sell its participating interest in the Huntington license, although this process was terminated as no acceptable offers were received.
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