Norse Energy and its subsidiaries report that production continues to improve in the US and in Brazil. The significant strengthening of the Brazilian Reais during the quarter contributed to a positive net result for the Company. The company's financial flexibility in Brazil is now secured, with recent cuts in exploration commitments, general cost cutting and the proposed debt restructuring.
Second Quarter Highlights and Subsequent Events Key financials and operations
- Group net production was 4,163 BOE/day in Q2-09, an increase of 13% from 3,685 BOE/day in Q1-09. This is primarily explained by higher gas production both in the US and in Brazil
- EBITDA for the second quarter was US $4.0 million, up from US $0.25 million in the first quarter 2009. The increase is primarily due to reduced dry hole costs, increased production levels, and higher gas prices in USD in Brazil
- Net foreign exchange gain of US $29 million, mainly due to a strengthening of the Brazilian Reais
- Net profit for the second quarter was US $9.2 million, compared to a net loss of US $2.2 million in the previous quarter.
- Book equity increased from US $66 million to US $119 million
- The company sold 30% of the shares in its subsidiary Norse Energy do Brasil to Sector Speculare (Private Equity) IV for US $30 million. The book gain for the Group was US $3 million
- An agreement has been reached with Brazilian banks on debt restructuring, pending final credit committee approval. Current commitments in Brazil are fully funded
- The reserve based lending facility in the US was increased from US $15.0 million to US $21.75 million