Norsk Hydro writes-down GoM fields by 549 mln usd; cuts 7 mln boe from reserves |
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Mon, 29 Jan 2007 10:04
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OSLO (AFX) - Norsk Hydro ASA said it is to write down the value of its fields in the US Gulf of Mexico by 549 mln usd, and cut its proven reserves by 7 mln barrels of oil equivalents (boe), following a review of its assets in the region.The Norwegian oil firm said the bulk of the write-down related to the Front Runner field, the value of which has been cut by 462 mln usd after tax, due to a combination of lower production profile and higher development costs.The impairment of Front Runner amounts to 710 mln usd before tax, of which 58 mln usd is related to in-field prospects and will be charged to exploration expenses in the fourth quarter of 2006, the firm said.The remaining book value of Front Runner will now be 201 mln usd.Hydro also has ownership interests in about 40 producing fields on the GoM Shelf, some of which it said are producing above expectations and some of which are performing below.Following similar impairment tests, Hydro said it will also write down the value of ten shelf fields by 87 mln usd after tax, corresponding to 134 mln usd before tax.Hydro's proven reserves in the Gulf will also be reduced by approximately 7 mln boe as of 31 Dec 2006.This, it said, represents less than 0.4 pct of its total reserves of more than 2 bln boe.Despite this cut, Hydro said it is maintaining its overall company production target for 2007 of 605,000 boe per day.'Although Front Runner has been a disappointment so far, we remain confident that the Gulf of Mexico with our significant exploration assets will continue to be an important core area in our international portfolio,' said Hydro's chief executive Eivind Reiten.alastair.reed@thomson.comar/jfrCOPYRIGHTCopyright AFX News Limited 2006. All rights reserved.The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News.AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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