OKEA third quarter results 2020

(amounts in parentheses refer to corresponding period previous year)

OKEA delivered yet another quarter with no serious incidents at the operated asset Draugen. Despite high production reliability both at Gjøa and Draugen in the quarter, total net production was reduced to 13,303 (18,665) boepd due to planned shutdowns both at Draugen and Gjøa (non-operated asset). During the quarter, OKEA completed the maintenance turnaround at Draugen which was timed to optimise operation for the production restriction measures implemented by the Norwegian Government earlier this year.

“Once again, I am pleased to see the strong performance at our Draugen operations. OKEA’s approach to the operatorship has resulted in high production reliability combined with innovative project execution. The ongoing improvement work will improve the financial performance at Draugen further and strengthen the robustness going forward”, says Erik Haugane, CEO of OKEA.

Operating income for the quarter amounted to NOK 321 (622) million. The lower income was due to significantly lower market prices and lower sold volumes in addition to a reduction in revenue of NOK 57 million relating to an adjustment of estimate from second quarter. Further delay in expected start of production and increased capex in the Repsol-operated Yme project, resulted in impairments of NOK 572 (0) million. EBITDA for the quarter amounted to NOK 116 (404) million and cash at the end of the quarter was NOK 883 million.  

“The temporary changes to the petroleum tax legislation has been a key enabler for reassessing our profitable projects which were put on hold earlier this year. Our activity level is now increasing, and we see attractive organic growth potential for OKEA within our existing portfolio without the need for additional equity. In addition, and as demonstrated by the Aurora acquisition and the farm-in to Calypso during the quarter, we maintain an opportunistic view on mergers and acquisition going forward”, says Mr. Haugane.

Link to press release:

https://www.okea.no/en/investor-news/E7CDCB0EDCE36F20/