North Energy ASA (“North Energy” or “Company”) recorded a comprehensive loss of NOK 15.6 million in the fourth quarter of 2018, resulting in a comprehensive loss of NOK 35.0 million for the full year. The loss reported for the quarter is mainly driven by a net loss in financial investments of NOK 10.8 million.
In the stock exchange notice of 20 February 2019, the Company announced its intention to distribute a dividend of NOK 0.3 per share. The dividend proposal will be put forward to the AGM on 28 May 2019. The proposal will include an option for shareholders to subscribe for new shares from dividends received.
Furthermore, the Company will put forth a buyback offer to shareholders, where shareholders are offered to sell the higher of 2,000 shares and 15% of their individual shareholding. Shareholders are free to tender more, but the allocation will be reduced pro rata based on current ownership if the total buyback exceeds the sum of 10% of the outstanding shares in the Company. The buyback price is set to NOK 1.90 per share. Further details regarding the share buyback program will be communicated in a separate stock exchange notice shortly
The Company announced in the stock exchange notice of 20 February 2019 that the Board of Directors has resolved to simplify the corporate structure. North Energy Capital AS (“NEC”) will repay to the Company the preference capital, including accumulated return, in a total amount of approximately NOK 148 million. Subsequently all strategic and financial investments will be held directly in the parent company. These actions are in accordance with the resolutions adopted by the Extraordinary General Meeting held on 27 April 2016.
North Energy’s total investment portfolio is per end of the fourth quarter NOK 142.7 million, measured at market value. The portfolio consists of industrial holdings, listed financial investments and other financial investments. The industrial holdings include the Company’s shares in Reach Subsea where North Energy is the major shareholder. The listed financial investments consist of shares in Touchstone Exploration and Polarcus amongst others.
North Energy has during the quarter repaid its remaining exploration loan as well as its bank overdrafts, thereby becoming a company fully financed through equity, which per yearend is reported to NOK 385.0 million. As of 31 December, North Energy had a net cash position of NOK 244.6 million.
As previously announced, North E&P received in October a notice from the Petroleum Taxation Office (“OTO”) of possible changes of the Company’s tax returns for the years 2014 and 2015. For these two years North Energy’s total expenses eligible for refund amounted to NOK 970 million. The Petroleum Taxation Office has in the notice challenged NOK 146 million of these expenses, with a corresponding exploration tax refund of around NOK 115 million. The Company strongly disagrees with the preliminary conclusions from OTO.
The tax settlement for the discontinued petroleum activities in the subsidiary North E&P was received in November with an amount of 234.5 million, including interest.
The interim financial report for the fourth quarter 2018 is available here.