Northern Offshore Comments on Northern Producer's Backlog
Northern Offshore has announced a revision of estimated 2010 production tariff revenues from its offshore floating production facility, the Northern Producer. The Northern Producer is on location in the Don field area in the U.K. Sector of the North Sea under a "life-of-field" term contract. The majority of revenue from the Northern Producer is derived from a tariff on production moving across the platform. The tariff is based on both the level of oil production and the price of Brent crude. Estimated tariff revenue is included in the company's estimates of its contract revenue backlog.
Based on production estimates available to it, the company had recently estimated the production tariff revenues for 2010 at approximately US $84 million. Northern Offshore has now reduced its internal expectations and projections of 2010 tariff revenue from the Northern Producer to about US $50 million at current Brent oil prices. This revised estimated tariff revenue is based on many uncertain factors and assumptions that could cause actual tariff revenues to vary materially.
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