Oil firm Noreco admits it needs stability from its North Sea output after a traumatic year which left the company facing extinction when its entire output was shut in.
The Norwegian firm, which is a partner in the Huntington gas field, secured a refinancing deal in November after admitting it faced liquidation.
The company was hit by major production problems last year, which at one point saw its entire UK, Norwegian and Danish North Sea fields shut down simultaneously.
But new cash and lower exploration costs during the winter allowed the firm to post a fourth quarter profit of £33million – although the company posted a full-year loss of £192.5million for 2013.
Chief executive Sven Arild Killingland admitted the company still faced production challenges over the year ahead, with the Cecilie field still shut and the Nini field only resuming production this month.
“On some days in February our share has been well above 10,000 boe (barrels of oil equivalent) per day, but we are still experiencing periods of operational challenges,” he said. “Production levels and cash flow from these fields are keys to further success.”
The 40,000 boed Huntington field, east of Aberdeen, returned to action again at the end of January after being hit by safety concerns during the winter North Sea storms.
The field, which suffered a host of technical problems last year, is key to Noreco’s success going forward, the company said.
The Cecilie and Enoch fields are due to return to production in the spring, which will further boost the company’s output.
Noreco was further boosted after the bill for the abandonment liabilities for Nini and Cecilie came in at £49million – having previously warned it could be as high as £56million last year.
Killingland said the firm had agreed a deal to put the money into escrow, with the money saved being offered to bond holders.
Work is now under way to drill two wells in the next few weeks – one on the Verdande prospect where it is operator, and a second on the Gohta discovery where it is a partner with operator Lundin. The former is predicted to hold as many as 29million barrels of oil in total.