Oslo, 4 January 2019
Reference is made to the Stock Exchange Notice from 24 October 2018 where North Energy informed about the notice from the Petroleum Taxation Office (OTO) regarding a possible NOK 146 million change of the tax returns from 2014 and 2015 for the subsidiary North E&P, corresponding to NOK 115 million in exploration tax refunds excluding interest. North Energy strongly disagree with the content and the conclusion of the notice and is currently preparing a thorough and comprehensive response to secure a fair and correct tax treatment. The response involves a considerable amount of evidence and documentation and the deadline for the response has been extended until 31 January 2019.
The process of settling the above-mentioned tax-issue will potentially take considerable time. Due to this the planned liquidation of North E&P has been put on hold. In November 2018 North E&P received the cash settlement for the tax refund for 2017, including the tax refund based on losses carried forward, amounting to NOK 234.3 million. North Energy is entering 2019 with a strong financial position, with no debt and around NOK 250 million in cash, before taking into account any adverse outcome of the tax dispute with OTO.
In May 2016 the extraordinary general meeting of North Energy decided on a comprehensive restructuring of North Energy, involving a new corporate and management structure to strengthen the company's business model and commercial platform. The initial period of the new structure was set to three years (see stock exchange notice on 27 April 2016).
Given that the initial three-year period comes due this spring, the Board of North Energy is in the process of evaluating the company's future strategy and structure. The aim of the evaluation is threefold; 1) to lay the foundation for a further development of the underlying values of North Energy, 2) protect and utilise the company's strong financial position, and 3) provide good transparency for all shareholders. As part of the evaluation, the Board will recommend both an amount and a structure of shareholder distributions that should meet the interest of all the various shareholders. The outcome of this process is anticipated to be announced before, or in connection with, the company's Q4 report on 27 February 2019.