Norwegian Energy Co. ASA fell as much as 67% in Oslo trading after saying it may not meet financial commitments at the end of the year because of a shutdown at its Huntington oilfield this month.
The Stavanger-based producer declined 64.6% to 2.94 kroner as of 9:28 a.m. in the Norwegian capital.
Noreco, as the company is called, may need to write down reserves at the Huntington and Oselvar fields, resulting in impairments of about 700million kroner and 100million kroner, respectively, it said in a statement today. The company’s chairman, Morten Garman, today also resigned along with fellow board member Erik Henriksen, according to Noreco
“This new information regarding an extended production shutdown on Huntington creates uncertainty about the company’s ability to meet its financial commitments and covenants towards the end of 2014,” the company said. The Huntington development will “impact cash balances through 2015 and onwards.”
Noreco bondholders approved a 3.1billion kroner refinancing plan as late as November as the company was facing insolvency following shutdowns at fields offshore the UK, Norway and Denmark. The company at the time replaced six bonds with four new ones carrying longer maturities and lower interest rates, while raising 530 million kroner in selling new shares.
The company is examining “mitigating measures” with advisers Arctic Securities ASA and Pareto Securities AS to secure a sustainable financing solution, it said. It’s also working with partners at its oilfields to improve production levels.