Results for the fourth quarter 2019

North Energy ASA (“North Energy” or “Company”) records a profit of NOK 12.7 million in the fourth quarter of 2019 compared to a loss of NOK 15.6 million in the same quarter last year. For the full year 2019 the Company records a loss of NOK 16.1 million compared with a loss of 35.0 million last year. The improved results are mainly driven by increased value of financial investments.

North Energy’s total investment portfolio is per end of the fourth quarter NOK 275.5 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 (Touchstone) amongst others.

North Energy is the largest shareholder in Touchstone and has at the end of the fourth quarter 11.0 per cent ownership in the company. In February 2020 North Energy participated with GBP 1.5m million in a private placement performed by Touchstone. Currently, North Energy’s has an ownership of 9.8 per cent in Touchstone.

As previously announced, North E&P received in October 2018 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 114 million. In the response submitted to OTO in the first quarter 2019, the Company strongly disputes both the content and the conclusion of the notice. There is currently no indication from OTO of the timeframe nor the outcome of the potential claim.

The Company announced in the stock exchange notice of 20 February 2019 that the Board of Directors has resolved to simplify the corporate structure. During the fourth quarter the merger between the subsidiary North Energy Norge AS and North Energy ASA has been completed. All investment activities are carried out by the parent company, while North Energy Capital AS, owned 80% by North Energy, remains as a holding vehicle for North E&P with NOK 120 million invested in low risk bond funds to ensure sufficient financial cover of the potential future tax claim.

The interim financial report for the fourth quarter 2019 is available here.