Norwegian Energy Company ASA, a North Sea oil producer, fell the most in more than six weeks after a shutdown at its Huntington field left the company without any producing deposits.
Shares in the Stavanger, Norway-based company, fell as much as 8.8 percent, the most since June 26 (NOR), and declined 6.3 percent to 2.99 kroner as of 1:17 p.m. local time. More than 3.3 million shares have traded so far today, three times the three-month average daily volume.
The Huntington field, located in the U.K. North Sea, was shut after the Voyageur Spirit floating production, storage and offloading vessel experienced problems with a cargo tank venting system, Noreco said in a statement today. Output may be resumed next week if revised operational procedures can improve the venting system, according to Noreco.
“Noreco is now in the unfortunate situation that production from all fields in which we have an interest have been shut,” Chief Executive Officer Svein Arild Killingland said in the statement. “We’re closely following the situation and have offered our support to the respective operators to ensure that production can resume as soon as possible.”
Noreco, which was seeking to raise production after earlier delays at Huntington, saw production from the Oselvar field off Norway halted August 9 after a gas compressor defect at the nearby Ula field where output is processed. Production at the Nini, Nini East and Cecilie fields was stopped in July because of a shutdown at the Siri field.
The company “is very dependent on the Huntington cash flow to prepare for its debt maturities the coming years,” analysts at Pareto Securities AS said in a note to clients. While the consequences should be limited if output resumes as planned, the halt increases the risk of refinancing this year, Pareto said.
Noreco’s shares have declined 44 percent in the past 12 months, giving the company a market value of 1.1 billion kroner ($187.8 million).
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