Annual Report 2015
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Annual Report 2015
Contents Managing Director Atle Sonesen Directors’ report Numbers Notes Auditor’s report
5 9 25 29 44
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Managing Director Atle Sonesen VNG Norge can look back on a very busy year, with important milestones passed in the development of Pil & Bue and a record number of wells drilled. Managing Director Atle Sonesen reflects on the past year and stresses the importance of safe and efficient operations, and the confidence that the authorities show the company. “The year started with good APA 2014 awards. We applied for five, but got six licences, five of them in our core area on the Halten Terrace. A confirmation that we did a good job with the applications,” says Sonesen. But it also shows confidence: “The number of licences and location shows that the authorities believe that we as a company contribute.” Of course, this reflects on the significant Pil & Bue discovery in 2014. For the effort, the company was awarded a prize, “Explorer of the Year” in Rystad Energy’s Gullkronen (Golden drillbit)-ranking. “The award shows that VNG Norge’s efforts are noticed and appreciated by the entire industry,” says Sonesen. Awards and recognition obviously gave inspiration into the work for the next exploration campaign. “Simply deciding on and planning such an extensive exploration programme with three new exploration wells in succession, is time-consuming and challenging,” says Sonesen. “And the execution?” “Simply put, we have planned and carried out three good drilling operations with high efficiency and no serious incidents or injuries.” Sonesen believes the combination of excellent HSE results during the drilling campaign and positive feedback following the audit conducted by the PSA related to the exercise of our see-to-duty as a partner in joint ventures shows that the company is capable of meeting authority requirements and expectations in a good way. “This is important to me personally and to ensure the company’s licence to operate”. The drilling campaign produced somewhat disappointing results despite the fact that a discovery was made in the first well: “A lot of valuable information about Pil and the surrounding area was collected, and of course we hope that the discovery in the Boomerang prospect can provide additional resources in the development of Pil & Bue,” says Sonesen. In fact, Boomerang stands out on the list of discoveries in an otherwise weak exploration year on the Norwegian shelf in 2015. The most extensive exploration activities in Norway last year took place precisely on the Halten Terrace; VNG’s core area: “The record high exploration activity with four other wells outside of PL586, has provided important information to determine the resource potential for the Pil & Bue development. Valuable information has been collected for future activity on the Halten Terrace,” says Sonesen.
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The development project for Pil & Bue has been driven forward with great commitment. Before the summer, the company passed its first major decision point (DG1), and the letter with “Decision on concretisation” (BOK) was presented to the authorities in August. “Passing DG1 so early, just one year after the exploration wells, demonstrates the ability to build an organisation and conduct appropriate studies and engineering,” says Sonesen. Adding that it requires both expertise and determination to drive things forward at such a rate. “Great emphasis is placed on recruiting the right skills and building up the necessary organisational capabilities to handle an early field development. We have seen high interest from experienced and relevant candidates, and have recruited 13 new employees to ensure that we are able to handle the tasks ahead,” says Sonesen. He refers to that experienced professionals in the industry in a survey ranked VNG in the top three among the most attractive employers in the industry (“Employer of the Year”). VNG also participates in the development of the Ivar Aasen field in the North Sea, progressing according to schedule and cost. Startup is scheduled for late 2016. “Ivar Aasen is an important project for VNG Norge. In addition to being our first licence taken from discovery to a full platform development, it is the only project that will provide production growth for us over the next few years,” says Sonesen. The oil price development has given the industry major challenges in 2015 - and still does: “VNG has, as everyone in the industry, experienced a significant reduction in revenue. We have put great effort into adapting cost and level of activity,” says Sonesen. Simultaneously with all the work on Pil & Bue, VNG Norge submitted a significant application for licensing round APA 2015. Early in 2016, great results on our part were announced, with awards in 4 of 4 possible licences in the heartland on the Halten Terrace. “Again, this demonstrates the authorities’ confidence in VNG Norge and we continue our efforts to take responsibility for the tasks we have been assigned in 2016, the year when we will be celebrating our 10 year anniversary,” says Sonesen.
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Directors’ report
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Operations and ownership VNG Norge AS (VNG Norge) is a wholly owned subsidiary of the Leipzig-based Group, VNG – Verbundnetz Gas Aktiengesellschaft (VNG AG). The company is responsible for the VNG Group’s oil and gas exploration and production (E&P) activities. VNG Norge has offices in Stavanger and Oslo. The VNG Group, with its more than 20 fully consolidated companies in Europe, is one of Germany’s major importers of and dealers of natural gas, and its large storage facilities ensure stable deliveries to customers both in Germany and in the rest of Europe. Pursuing its own exploration and production activities is highly significant in strategic terms for the VNG Group, and there is a strong commitment to build a sustainable E&P business in Norway. Since 2013 the VNG Group’s professional expertise within E&P has been integrated and concentrated in VNG Norge. At the turn of the year, VNG Norge participated in a total of 42 licences in the North Sea and the Norwegian Sea – six as operator. The company was awarded four licences through Awards in Predefined Areas (APA) 2015. Through its wholly owned subsidiary, VNG Danmark ApS (VNG Danmark), the company has interest in two licences on the Danish continental shelf. VNG Norge participates in exploration, development and production licences. As operator of PL 586 with the oil and gas discoveries in Pil & Bue in 2014, the company is on the way from exploration operator to operator in the whole value chain. VNG Norge will primarily grow through organic development by proving oil and gas resources and maturing these from discovery to production with a competent organisation and the best available data and technology, through participation in licensing rounds and through drilling exploration wells. Interesting new opportunities in existing licences will also be assessed. Farming in and out of licences forms part of the company’s active portfolio management. In addition to preparations for further development of PL586 and the Halten Terrace, VNG Norge will continue to be present in the most promising areas of the Norwegian and Danish continental shelves, taking a proactive and constructive role in licence partnerships. VNG Norge holds 7.56% share in the Draugen field, 4.4424% share in the Brage field, 2.5% in the Njord field and 2.5% in the Hyme field. The sold volumes from these fields were 1.655.000 barrels of oil equivalent in 2015. In addition, VNG Norge holds 3.0230% in the Ivar Aasen field, currently under development. VNG Danmark was established in 2010 as a wholly owned subsidiary of VNG Norge. This is a continuation of VNG Norge’s efforts in the North Sea. As partner in licence 3/09 and in the Solsort Unit the Danish North Sea, VNG Danmark is involved in the field development of the Solsort discovery.
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Activities 2015
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Exploration
VNG Norge was awarded PL586 as operator on 4 February 2011 (APA 2010), and in 2014 the Pil & Bue discoveries were made. On 22 June 2015 the first well 6406/12-4 S in the Boomerang prospect was spudded in the same licence. An oil discovery was announced 17 September. The preliminary estimate of the size of the discovery is between 13 and 31 million boe. The 6406/12-4 S well was also a successful appraisal of the Pil reservoir. From the same location a side track, 6406/12-4 A was drilled but no additional hydrocarbons were found. After completion of the 12-4 A well, the rig was moved to the northeast to drill the third well of the 2015 drilling campaign, 6406/12-5 S. The 12-5 S well found reservoir of moderate quality, but only with traces of hydrocarbons. This was the sixth well to be drilled in PL586, following the Pil & Bue discoveries. The drilling operations were carried out by the drilling rig Transocean Arctic, and were conducted according to schedule, below budget and with no incidents.
As partner VNG Norge participated in four exploration wells, all on the Halten Terrace: • • • •
Bister (PL348). Operator Statoil, VNG Norge 2.5% Hagar (PL642). Operator Repsol, VNG Norge 10% Portrush (PL793). Operator Shell, VNG Norge 10% Lorry (PL700B). Operator Lundin, VNG Norge 20%
All four wells were dry.
VNG Norge was awarded four partnerships in the APA 2015 – PL830 (20%), PL831 (20%), PL833 (30%) and PL834 (30%) in the Norwegian Sea. All licences are located on the Halten Terrace where VNG Norge is already a significant player and the only company currently with a share in all the producing fields. The Pil & Bue discoveries in 2014 led to an increased interest for the Halten Terrace and re-invigorated this well-explored area.
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Development
The Pil & Bue development project passed Decision Gate 1 (DG1) in 2015, and the report (BOK – “beslutning om konkretisering”) was submitted to the authorities in September. Three development concepts are matured towards DG2: • Tie-in to Njord • Tie-in to Draugen • Stand-alone FPSO DG2 is planned for December 2016.
With a 2.5 per cent share in PL348, VNG Norge is partner in the Snilehorn development project. DG2 is expected during summer 2016. The partners have concluded on a development solution with tie-in to Njord. The Ivar Aasen development project is on track to meet first oil in December 2016. The platform jacket was completed and delivered in Q1 2015, and installed on the seabed in June 2015. Det Norske is operator of the Ivar Aasen unit. Currently this is VNG Norge’s largest development project.
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Production
Draugen is VNG Norge’s largest producing asset and has delivered stable production with high production efficiency. VNG Norge’s total production from Draugen was 0,924 million boe in 2015. In comparison, total VNG Norge production was 1.618 million boe. Production on the Njord field is declining due to the lack of new wells. The plan is that Njord and Hyme will stop production at the beginning of June to prepare for tow-in for major modifications in September 2016. VNG Norge’s total production from Njord was 0,277 million boe in 2015. Production from Hyme was 0,165 million boe. A new Brage well was drilled in 2015 and put into production in January 2016, and is performing above expectations. In Q4 the Brage partnership decided to initiate a drilling break of 12-14 months. The purpose of this break is to mature more robust drilling targets. This will not significantly affect production in 2016. VNG Norge’s total production from Brage was 0,253 million boe in 2015.
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Reserves Through its shares in Brage, Njord, Draugen, Ivar Aasen and Hyme, VNG Norge has remaining reserves of 16.65 million boe.
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VNG Danmark The activities of VNG Danmark is run by a dedicated project organisation within VNG Norge. The Solsort discovery has been unitised with the neighbouring licence 7/89. In 2015 the project has been influenced by difficult commercial negotiations with various hosts for a tie back concept. Concept selection is subsequently postponed and expected during 2017.
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Organisation
Great effort and commitment has been devoted in developing the organisation and preparing for the new and challenging tasks as operator for a field development project. To ensure that VNG Norge efficiently meets its obligations and assignments, further improvement of governance and decision processes and adjustments of the organisational model have taken place. Recruitment of critical competence and expanding the organisational capabilities has been – and is, a prioritized activity. At the end of 2015, the organisation counted 90 employees, including Managing Director and one IT apprentice. 34% of the employees were women. The management team counts two women of a total of seven executives. The turnover in personnel was 2.3% in 2015.
On an average, hired-in consultants amounted to 32.7 man-years throughout 2015. In March, VNG Norge was named the third most attractive employer among more than 50 E&P companies on the NCS, according to the Scouting Employer Index. In November, VNG Norge was certified as a “Great Place to Work”. VNG Norge is characterised by diversity in gender, age, nationality, education and experience and no one should be discriminated against on the basis of ethnicity, origin, or religion. This is reflected in the company’s recruitment, wages and working conditions, promotions, development opportunities and protection against harassment.
The Management Team
Erling Bergfjord Director Exploration Activities
Atle Sonesen Managing Director
Lars Katteland Director Development and Operations
Sjur Arneson Director Production and Reserves/VNG Danmark
Tone Lise Pedersen Chief Financial Officer
Hege Hayden Director HR & Communication
Rolf Haakon Holmboe Director HSEQ
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Health, safety and environment It is the company’s target that all activities are to be carried out with no personal injury or harm to the environment. Safeguarding people, the environment and material assets is an integral part of the company’s activities. Good overall HSE results have been achieved in our partner operated licences in 2015. The company has followed its duties as responsible partner in 2015. Three external partner audits have been conducted and results have been followed-up, and the company’s routines and procedures as licence partner were audited by the authorities through a Petroleum Safety Authority (PSA) audit in March. No deviations were identified.
period for the operations on Transocean Arctic. Having a joint consortium HSE programme proved to be a successful approach and has resulted in very good cooperation between the operators and the rig owner. The operations were completed without serious incidents and good HSE results overall. The emergency preparedness organisation has been trained and exercised regularly prior to and during the drilling operations. The commencement of the PL586 field development project has included an extended update of the Management system as part of the transition of the company into a new role as an operator for a full field development project. VNG Norge did not receive any orders or notification of orders from the Norwegian authorities in 2015.
As operator of the drilling operations in licence PL586, VNG Norge took part in the establishment of a joint HSE programme with fellow operators Lundin and Wintershall, in the rig consortium
In 2015, absence due to illness was 3%.
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2015 financial statements The company’s financial statements have been presented in accordance with Norwegian accounting legislation and generally accepted accounting standards (NGAAP). The board of directors and the Managing Director confirm that the going concern assumption is realistic, and this assumption has been used when presenting the financial statement. In the view of the board of directors, the annual report gives a true picture of the development in the company, its activities and financial position. During 2015 measures have been taken to reduce cost base and improve efficiency to adopt to a new reality with significantly lower revenue stream due to the decline in commodity prices. The company has among others reduced the numbers of consultants, postponed on-boarding of new employees, reduced annual salary adjustments, adjusted bonus scheme, reduced cost related to external services and renegotiated several contracts. These measures have resulted in reduced costs. However, at the same time priority has been given to developing the organisation to handle the Pil & Bue field development project. Profit and loss statements In 2015, the company’s profit after tax shows a loss of MNOK 329.9. Compared to 2014, the loss increased by MNOK 144.6 from MNOK 185.3. The increase in loss mainly relates to high impairments due to the expected low oil prices going forward. 2015 also had significantly higher dry hole cost compared to 2014. VNG Norge’s operating revenue was increased by MNOK 227.6 from MNOK 425.2 in 2014 to MNOK 652.8 in 2015, mainly because of higher production due to the purchase of Draugen in the second half of 2014.
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Oil sales are increased by MNOK 151.9 from 351.6 MNOK in 2014 to 503.5 MNOK in 2015. The increase is related to higher lifted volumes due to the purchase of Draugen, partly offset by reduced average sales prices. In 2015, the average sales price achieved for crude oil was USD 52 per barrel, compared to USD 90 per barrel in 2014. Exploration costs have increased by MNOK 279.6 from MNOK 307.5 in 2014 to MNOK 587.1 in 2015. The increase in costs are mainly related to dry well cost. Production costs are at the same level as in 2015 which represents a decrease in costs per barrel since sold volumes are increased. Depreciation is increased by MNOK 162.3 from MNOK 189.2 to MNOK 365.3 The increase is mainly related to higher lifted volumes. An impairment amounting to MNOK 540.3 is expensed for two producing assets. Recoverable amount is considered lower than booked value due to drop in expected oil prices. Net financial items are impacted by high unrealized foreign exchange loss on long term loans due to the weakening of NOK throughout 2015. This is the same trend as in 2014. Balance sheets The company’s balance sheet shows assets of MNOK 3 816.4 in 2015, compared to MNOK 3 458.7 in 2014. The shares in subsidiaries is valued to MNOK 268.2 and is related to VNG Danmark ApS. The company has an acceptable equity of MNOK 863.3 which represents an equity ratio of 23%. Investments during the year have
been funded through increase in long term liabilities to the parent company and equity increase by MNOK 200. The equity increase is financed by converting MNOK 200 of the intercompany loan to equity.
continuously monitors the development in these parameters in the short and long term. In 2015, the company used no financial instruments to secure achievement of results and financial position.
With effect from 1 April 2016, VNG AG and VNG Norge have entered into two new loan agreements: One exploration loan facility and one corporate long term facility. The exploration loan facility runs until 31 December 2017 and is amounting to MNOK 1 200. The corporate long term facility amounts to MNOK 1 600 and runs until end of 2022. The loan agreement that was effective at year-end 2015 has been terminated. The new loan agreements will together with equity increases secure the funding of VNG Norge in the long term.
The company considers its customers’ credit worthiness to be very good. The risk that the company’s customers will not have the financial strength to meet their obligations is considered to be low.
Cash flows In 2015, cash flow from operations was MNOK 145.0. In comparison the operating loss from profit and loss statements was a loss by MNOK 1 115. The difference is mainly related to impairments and depreciations.
Outlook 2015 was a challenging year with declining oil prices and an unstable market situation. However, the board of directors is satisfied with the company’s activity and measures taken to meet the challenging market conditions throughout 2015. Going forward the company will continue to initiate measures to reduce cost base and improve efficiency to strengthen VNG Norge’s long term competitiveness adapting to lower commodity prices.
The company’s investments by MNOK 711.2 are mainly related to investments in Ivar Aasen, Draugen and PL586. The company has MNOK 23.5 in cash and cash equivalent on the balance sheet date and the possibility to draw MNOK 824 on the credit facility at year end. Liquidity is considered to be satisfactory. Financial risk The company’s financial position and results are largely affected by business risks, and mainly by the prices achieved for crude oil and natural gas and exchange rates in USD. The trends in price and exchange rate are determined by the trend in the international economy and in the oil industry. The company
The company’s activities in 2015 were financed through a long-term loan from the parent company, VNG AG, and increased equity. The loans have a floating interest rate and therefore the company is exposed to market changes in the interest rate.
VNG Norge has further strengthened its position as a competent and professional partner in general and will take an active part in developing the Halten Terrace for the future. As operator of PL586, VNG Norge will in 2016 continue the development of Pil & Bue, and the partners are planning to select a development concept by the end of the year. The company will continue to build an organisation to handle the current and future responsibilities and tasks related to the field development.
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The company intends to be an active explorer in its core areas, however in the current market situation exploration activity will be lower than in 2015, with two wells in the plan. VNG Norge is actively working on maturing the new licences awarded in the APA round 2015, together with the operator and partners, and through that continue to strengthen our position and understanding of the Halten Terrace area. In addition to these activities, the company is working on maturing new prospects, as an operator and as a partner, and on participating in licensing rounds and evaluating new business opportunities.
Norge is committed to contributing to cost efficiency and proactively proposing measures to increase productivity and life-of-field in all our assets. The company is also committed to working for solutions in standardisation and simplification, which can improve the economics of new investments. VNG Norge considers this as an opportunity and is seeking to leverage the current market to enable an economic development of Pil & Bue. The parent company’s long term commitment to Norway and Denmark provides good basis for further development of the business. The Norwegian transparency rule The Norwegian regulation regarding “Report on Payments to Governments” is warranted the Norwegian Accounting Act (Regnskapsloven) § 3-3 d. VNG Norge has published the reporting according to this regulation together with the Annual Financial statement for 2015.
VNG Norge is well positioned to continue developing the operations in Norway and Denmark. The oil and gas industry and its contractors are affected by the low-oil price, cost reduction measures and reduced activity level. VNG
28 April 2016
Hans-Joachim Polk Chairman of the Board
Atle Sonesen Managing Director
Anton Irmen Board Member
Bodo Rodestock Vice Chairman of the Board
Mike Diekmann Board Member
Liv Monica Stubholt Board Member
Unni Byrkjeland Board Member
Tone Jacobsen Board Member
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The Board
Hans-Joachim Polk Chairman of the Board
Bodo Rodestock Vice Chairman of the Board
Liv Monica Stubholt Board Member
Anton Irmen Board Member
Unni Byrkjeland Board Member
Tone Jacobsen Board Member
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Mike Diekmann Board Member
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Numbers
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Profit and loss statements In NOK thousands Sales revenues Other operating revenues
1 January – 31 December
Note
2015
2014
2
619 948
415 784
2,20
32 829
9 427
652 777
425 211
Operating revenues Exploration costs
3,7
587 095
307 478
Production costs
21
226 483
216 239
4
49 966
91 894
5,12
365 338
189 160 *
12
-13 881
0
Impairment of tangible assets
5
540 300
53 610
Other operating expenses
6
12 638
63 320
Operating costs
1 767 937
921 700
Operating loss
-1 115 160
-496 490
12 469
8 827
59
2 964
13,20
51 002
59 609
16
-136 492
-135 056
160
50
Salary and other personnel costs Depreciation Change in estimate asset retirement obligation
Interest income Other financial income Interest expenses to group companies Net foreign exchange gain/(loss) Interest expenses Accretion expense asset retirement obligation
12
Other financial expenses Net financial items Loss before taxes Income taxes
8
Loss of the year
39 571
20 889 *
4 858
93
-219 555
-203 905
-1 334 715
-700 395
1 004 819
515 102 *
-329 896
-185 293
-329 896
-185 293
Allocation of net income for the year: Transferred to Accumulated deficit
11
* Change in accounting principle, reference is made to note 5, 11 and 12.
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Balance sheets
31 December
In NOK thousands
Note
2015
2014
Capitalised exploration costs
7
535 605
389 493
Deferred tax assets
8
568 805
163 320 *
ASSETS Intangible assets
Total intangible assets
1 104 410
552 813
1 753 805 *
Non-current assets Tangible assets
5
1 517 468
Pension assets
15
0
5 668
Shares in subsidiaries
17
268 233
268 233
1 785 701
2 027 706
383
94
9
902 368
765 873
10
23 498
112 234
926 249
878 201
3 816 361
3 458 720
Total non-current assets Current assets Accounts receivable Other receivables Cash and cash equivalents Total current assets Total assets * Change in accounting principle, reference is made to note 5, 11 and 12.
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Balance sheets
31 December
In NOK thousands
Note
2015
2014
Share capital
11
144 089
124 089
Share premium reserve
11
2 038 871
1 858 871
2 182 960
1 982 960
EQUITY AND LIABILITIES Equity
Paid-in equity Accumulated deficit
11
Total equity
-1 319 616
-989 719 *
863 344
993 240
12
890 596
777 550 *
13, 20
1 675 387
1 397 898
2 565 984
2 175 449
Accounts payable
40 894
1 225
Withholding taxes and social security payable
20 080
21 348
326 059
267 457
387 033
290 030
3 816 361
3 458 720
Non-current liabilities Asset retirement obligation Long-term intercompany loan Total non-current liabilities Current liabilities
Other current liabilities
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Total current liabilities Total equity and liabilities * Change in accounting principle, reference is made to note 5, 11 and 12.
28 April 2016
Hans-Joachim Polk Chairman of the Board
Atle Sonesen Managing Director
Anton Irmen Board Member
Bodo Rodestock Vice Chairman of the Board
Mike Diekmann Board Member
Liv Monica Stubholt Board Member
Unni Byrkjeland Board Member
Tone Jacobsen Board Member
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Cash flow statements
1 January – 31 December
In NOK thousands
Note
2015
2014
-1 334 715
-700 395
5
365 338
189 160
12
-13 881
0
Impairment
5
540 300
53 610
Tax refund
8
580 895
520 975
Expensed exploration costs previously capitalised
7
6 466
0
-118 344
-31 219
97 002
141 402
5 668
-2 134
16 233
-8 184
144 961
163 214
Net cash flows from operating activities Loss before income tax Depreciation Reversal of depreciation related to ARO asset
Changes in current assets Changes in current liabilities Changes in other current balance sheet items Changes in asset retirement obligation
12
Net cash flows from operating activities Net cash flows used in investing activities Investments in tangible assets
5
-558 104
-1 070 418
Investments in intangible assets
7
-153 082
-337 720
17
0
-30 694
-711 186
-1 438 832
477 489
1 330 659
Net cash flows from financing activities
477 489
1 330 659
Net increase in cash and cash equivalents
-88 736
55 041
112 234
57 193
23 498
112 234
Investments in subsidaries Net cash flows used in investing activities Net cash flows from financing activities Increase in long-term intercompany loan
11, 13
Cash and cash equivalents as of 01.01
10
Cash and cash equivalents as of 31.12
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Notes NOTE 1. ACCOUNTING PRINCIPLES The financial statements have been prepared in accordance with the Norwegian Accounting Act and Norwegian generally accepted accounting principles (NGAAP).
INTANGIBLE ASSETS; CAPITALISED EXPLORATION COSTS Costs related to geological and geophysical activities as well as other exploration costs are expensed when occurred. Expenditures to acquire mineral interests in oil and gas properties and expenditures to drill and equip exploration wells are capitalised as exploration and evaluation expenditures within intangible assets until it has been clarified whether the exploration well has found proven reserves or not. If, following evaluation, the exploration well is determined not to be commercial, the previously capitalised costs are expensed.
CLASSIFICATION AND VALUATION OF BALANCE SHEET ITEMS Tangible assets are assets intended for long time ownership or use. Other assets are classified as current assets. Receivables to be repaid within one year are classified as current assets. Long- and short-term liabilities are classified according to the same principles. Tangible assets are valued at cost, but are impaired to the recoverable amount on a decline in value if it is expected that the decline is not temporary. Tangible assets with a limited useful life are depreciated over the estimated economic life of the asset. Long-term liabilities are included in the balance sheets at the nominal amount when established. Current assets are valued at the lower of purchase cost and market value. Short-term liabilities are included in the balance sheets at the nominal amount when established. USE OF ESTIMATES Preparing the accounts in accordance with accounting principles makes it necessary for the management to adopt estimates and evaluate conditions which affect the value of the assets and liabilities in the balance sheets, and for revenues and expenses for the fiscal year. The final, realised values may differ from these estimates. JOINTLY CONTROLLED ASSETS Interests in jointly controlled assets (license partnerships) are recognised by including the company’s share of assets, liabilities, revenues and expenses on a line-byline basis.
Capitalised exploration costs are not depreciated. The assets are reclassified and depreciated as part of tangible assets when the decision to develop a particular area is made. TANGIBLE ASSETS; OIL AND GAS FIELDS Costs related to development of production facilities and the acquisition cost of production licences with proven reserves are capitalised and depreciated using the unit of production method. According to this method, annual depreciation is calculated as cost plus forecasted cost to develop multiplied by the ratio between the year’s petroleum sale and the total economic remaining proven and probable reserves. OTHER TANGIBLE ASSETS Other tangible assets are capitalised and depreciated over the expected life of the assets. Depreciation is calculated based on the initial cost of the assets and by using the straight-line method. Maintenance of tangible assets is expensed as incurred and included in other operating expenses, whilst additions and improvements are capitalised and depreciated. FARM-IN TRANSACTIONS For exploration and evaluation asset acquisitions (farm-in arrangements) in which there has been made an arrangement to fund a portion of the selling partner’s (farmor’s) exploration and/or future development expenditures (carried interests), these expenditures are reflected in the financial statement as and when the exploration and development work is carried out.
FOREIGN CURRENCY The company’s functional and reporting currency is NOK. Cash equivalents denominated in foreign currency are measured at the exchange rate at the year-end. Foreign currency transactions are recorded applying the exchange rate at the date of the transaction.
UNITIZATION AND REDETERMINATION For exploration licences, an unitization is accounted for based on historical costs, as it is often difficult to determine the fair value. For unitizations involving licenses that are not in the exploration phase, it will be decided whether the transaction has commercial substance.
REVENUE RECOGNITION Revenues related to petroleum products are recorded when the title passes to the customer according to the contractual terms.
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Notes If the transaction has commercial substance it will be accounted for at fair value. If not, the transaction will be accounted for based on continuity.
Removal assets are depreciated as part of tangible assets as described above (Unit of Production-method). The unwinding of the discounting effect is charged to profit and loss as a financial expense.
The same principles will be used for redeterminations. IMPAIRMENT Intangible assets and tangible assets are assessed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the assessment determines that the assets are impaired, the carrying amounts of those assets are written down to the recoverable amount, which is the higher of fair value less cost to sell and value in use. The unit of account used for assessment of impairment will be the lowest level at which it is possible to identify cash inflows that are independent of cash inflows from other groupings of assets. For oil and gas assets, this is carried out at the field or license level. In the assessment of value in use, the expected future cash flows is discounted to the net present value by applying a discount rate after tax. The discount rate is derived from the Weighted Average Cost of Capital (WACC). For producing licences and licences in a development phase, the recoverable amount is calculated by discounting future cash flows after tax. The basis for data input for the various fields is normally the operator’s reporting to the Revised National Budget (RNB). Future cash flows are determined in the various licences based on the production profile for the remaining reserves. The lifetime of the field for the purpose of impairment testing is normally determined by the point in time when the operating cash flows from the field becomes negative. DECOMMISSIONING AND REMOVAL OBLIGATIONS Provisions are made for the net present value of the estimated costs of decommissioning installations at the end of the producing life of fields, based on price levels and technology at the balance sheet date. The decommissioning provision is recognised with a corresponding entry to property, plant and equipment. Changes in these estimates and changes to the discount rates are dealt with prospectively and reflected as an adjustment to the provision and corresponding asset included within property, plant and equipment.
The principle for accounting of decommissioning and removal obligations has been changed. Previously the provision for decommissioning and removal was built up gradually in step with the economic life of the installations. The effect of the changed principle is booked against equity. The 2014 profit and loss, balance sheets and notes are restated to reflect the new principle. OVER-/UNDERLIFT OF PETROLEUM PRODUCTS In producing fields, obligations and receivables will arise between the licence owners if the owners’ shares of the production differ from the quantities sold or lifted by the companies. Obligations arising as a result of lifted quantities of crude oil and NGL being larger than the company’s share in the licence are valued at the production cost and receivables arising as a result of lifted quantities of crude oil and NGL which are less than the company’s share in a licence, are valued at the lower of the production cost and sales price. SUBSIDIARIES The company’s subsidiary is valued at cost. The investment is valued at acquisition cost for the shares, unless a write-down has been necessary. Write-down to fair value is performed when the impairment is due to circumstances that cannot be assumed to be temporary. Any impairment loss is reversed when the basis for the impairment no longer exists. INCOME TAXES Income taxes are expensed when incurred, i.e. tax costs are related to the annual result before tax. The tax cost in the profit and loss includes tax payable for the year and changes in deferred taxes. When calculating the tax expense, the applicable tax rates for standard taxation of 27% and special taxation of 51% have been used. Deferred tax (27% and 51% for 2014, 25% and 53% for 2015) has been calculated based on the temporary differences between accounting values and tax values. The reason for the use of deferred tax/deferred tax benefit is different principles for the establishment of the commercial and taxable result. Tax-increasing as well as tax-reducing timing differences which reverse or may be reversed during the same period have been balanced
30
The accumulated effect of changes in estimates and in financial and actuarial assumptions (actuarial gains or losses) less than 10% of the higher of defined benefit pension obligations and pension plan assets at the beginning of the year was not recognised. When the accumulated effect was above the 10% limit at the beginning of the financial period, the excess amount was recognized in the income statement over the estimated average remaining service period. The net pension cost for the period was classified as salaries and personnel costs. Social security cost on under-funded pension liability and periodic pensionable contribution, was accrued. Costs related to defined contribution plans were expensed as they occur.
and included at net value. Net deferred tax asset (including the tax benefit of loss carry forward) is accounted for in the balance sheets to the extent it is likely that it may be utilised. The uplift reduces the base for special tax. Earned and deferred uplift from capitalised expenditures have been fully reflected in the tax calculation. Refund of tax related to exploration costs according to the Petroleum Tax Act § 3c.5 is recorded as income under taxes in the profit and loss statement and included as other receivables in the balance sheet. PENSION LIABILITIES The company has a contribution based pension arrangement were costs are expensed as incurred. The arrangement meet the requirement of mandatory pension arrangement “OTP�.
CASH FLOWS STATEMENT The cash flows statement is presented using the indirect method. Current assets include all bank deposits and cash at the end of the year, including the non-distributable tax-withholding account.
The company had a defined benefit plan, which was terminated 30 June 2015. The obligation was valued at the present value of accrued future pension benefits on the balance sheet date. Pension plan assets were valued at their fair value.
31
Notes NOTE 2. OPERATING REVENUE
In NOK thousands
2015 BRAGE
NJORD
Crude oil
81 101
20 676
6 708
20 692
6 436
16 220
12 527
45 755
5 232
2 836
100 337
87 123
NGL Dry gas Sales revenues
HYME
2014
Product / field
DRAUGEN
SUM
BRAGE
NJORD
HYME
DRAUGEN
SUM
57 873 343 891 503 541
87 684
36 229
50 056
8 670
11 426
0
5 603
25 699
66 351
8 338
21 846
2 722
5 614
38 520
69 542 362 947 619 948 104 692
69 501
33 647 194 005 351 565
36 369 205 222 415 784
Other income
32 829
9 427
Total operating revenues
652 777
425 211
NOTE 3. EXPLORATION COSTS In NOK thousands
2015
2014
Exploration costs from licenses
148 185
185 151
Dry exploration wells
369 217
56 507
6 466
0
63 227
65 820
587 095
307 478
2015
2014
Wages and salaries
133 328
138 376
Social security costs
21 447
21 478
Pension costs including social security costs (note 15)
18 101
12 282
2 285
5 225
-125 196
-85 468
49 966
91 894
Exploration costs capitalised in previous years (note 7) Other exploration costs including seismic Total
NOTE 4. SALARY AND OTHER PERSONNEL COSTS In NOK thousands
Other personnel costs Recharged salaries and other personell cost Total
All employees of VNG Norge are eligible to participate in the company’s current performance bonus scheme, of which bonus payment is based on corporate results, company and individual performances. The bonus is paid in cash. The company changed in 2015 its pension arrangement from a defined benefit plan to a contribution based pension arrangement. The arrangement meet the requirement of mandatory pension arrangement “OTP”, and the costs are expensed as incurred. The company employed 88.1 man-years in 2015. At the end of the year, the company employed 90 persons. Expensed compensation to key management 2015: Name Atle Sonesen Fees paid out in 2015 for the board of directors were NOK 160 000.
32
Salary
Pension
Other benefits
5 319 089
197 651
205 224
NOTE 5. TANGIBLE ASSETS 2015 In NOK thousands
Producing oil and gas fields
Oil- and gas fields under development
Tools and equipment
Total
Adjusted cost of 31.12.14
2 267 821
299 533
59 182
2 626 536
231 301
294 322
16 281
541 904
0
16 200
0
16 200
Addition asset retirement obligation asset
93 994
16 701
0
110 694
Reclassifications
15 280
-14 776
0
504
2 608 395
611 979
75 463
3 295 838
Cumulative depreciation as of 31.12.14
-828 203
0
-44 528
-872 731
Depreciation for the year
-355 365
0
-9 973
-365 339
Additions Capitalised financial costs
Cost as of 31.12.15
Impairment
-540 300
0
0
-540 300
-1 723 868
0
-54 501
-1 778 369
884 528
611 979
20 962
1 517 468
In NOK thousands
Producing oil and gas fields
Oil- and gas fields under development
Tools and equipment
Total
Cost as of 31.12.13
871 489
18 475
55 617
945 581
29 676
0
0
29 676
901 164
18 475
55 617
975 257
1 366 657
206 668
3 565
1 576 889
Cumulative depreciation as of 31.12.15 Carrying amount as of 31.12.15
2014
Change in principle (Asset retirement obligation asset) Adjusted cost of 31.12.13 Additions Reclassifications
0
74 390
0
74 390
2 267 821
299 533
59 182
2 626 536
Cumulative depreciation as of 31.12.13
-599 655
0
-30 306
-629 961
Depreciation for the year
-174 938
0
-14 222
-189 160
-53 610
0
0
-53 610
-828 203
0
-44 528
-872 731
1 439 618
299 533
14 654
1 753 805
Cost as of 31.12.14
Impairment Cumulative depreciation as of 31.12.14 Carrying amount as of 31.12.14
Investments in oil and gas fields are depreciated according to the unit of production method, whereas, on investments in tools and equipment, straight-line depreciation over 3-5 years is made. The company has changed principle for accounting of Asset Retirement Obligation. Reference is made to note 11 and 12 for more details. IMPAIRMENT Due to the significant drop in hydrocarbon prices during 2015, an impairment trigger was identified hence impairment tests have been performed. The impairment tests resulted in impairment for two producing asset amounting to NOK 540.3 million in 2015. For all other assets, the recoverable amount exceed the carrying value and no need for impairment was identified.
33
Notes KEY ASSUMPTIONS FOR IMPAIRMENT TESTING OIL PRICES Oil price curves are based on the managements estimated and available market data. Information about market prices for the next 4 years can be derived from the futures contracts market. On a mid-term to long term basis the price curve is based on the management’s assumptions. DISCOUNT RATE The post-tax real term discount rate is set to 7.1%. The producing assets Njord and Draugen are production hubs in the Halten Terrace. Due to available capacity and potential developments in the area, it is likely that the assets will see tie in’s from one or more fields. A tie in will positively impact the “value in use” of the assets due to tariff income, increased life of the field and delay in abandonment costs. The probability of a tie in for present discoveries are captured in the calculation of “value in use” for the respective producing assets. The Snilehorn- and PL 586 discoveries are potential tie in candidates.
34
NOTE 6. OTHER OPERATING EXPENSES In NOK thousands Office, IT and other costs Insurance Services Travelling costs
2015
2014
56 994
58 887
68
64
112 256
41 174
5 496
5 290
-162 175
-42 096
12 638
63 320
Amounts exclusive of VAT and in NOK thousands
2015
2014
Statutory auditing fees
1 166
508
547
320
1 713
828
Recharged other operating expenses Total
The cost of the company’s auditor is included in other costs and can be specified as follows:
Other consultants fee Total auditors' fee
The company has signed leases for 5 years renting of offices in Oslo and Stavanger, total leasing commitment is NOK 69.1 million.
NOTE 7. INTANGIBLE ASSETS In NOK thousands
Capitalised exploration costs
Carrying amount as of 31.12.14
389 493
Additions
153 082
Reclassification
-504
Expensed exploration costs previously capitalised
-6 466
Carrying amount as of 31.12.15
535 605
In NOK thousands
Capitalised exploration costs
Carrying amount as of 31.12.13
126 163
Additions
337 720
Reclassification
-74 390
Expensed exploration costs previously capitalised
0
Carrying amount as of 31.12.14
389 493
35
Notes NOTE 8. INCOME TAXES
The year’s tax cost on ordinary profit is calculated as follows: In NOK thousands
2015
2014
-1 334 715
-700 395
Permanent differences
-50 956
95 834
Changes in temporary differences 27%
423 475
-263 173
-962 196
-867 734
768 663
745 023
-193 533
-122 711
-962 196
-867 734
123 259
115 186
Changes in temporary differences 51%
0
0
Uplift
0
0
-838 937
-752 548
Basis for tax refund this year
768 663
745 023
Loss carry forward 51%
-70 274
-7 525
599 557
581 119
-224
3 129
Deferred tax recorded as part of asset acquisition cost
0
-69 197
Tax payable recorded as part of asset acquisition cost
0
27 479
405 485
-27 428
1 004 818
515 102
Basis for 27% tax Net income before taxes
Basis for company taxes Basis for tax refund this year Loss carry forward 27% Basis for 51% tax Basis for company taxes Financing costs only subject to 27% tax
Basis for special tax
Tax expense Tax refund this year Adjustments previous years
Change in deferred tax Tax expense on income (loss)
TEMPORARY DIFFERENCES 2015 In NOK thousands
2014
25 %
53 %
27 %
51 %
Intangible assets
535 605
535 605
389 767
389 767
Tangible assets
245 471
245 471
586 803
586 803
Asset retirement obligation
-883 339
-883 339
-770 320
-770 320
881
881
1 101
1 101
0
0
4 534
4 534
-20 989
-20 989
-35 555
-35 555
-421 183
-132 164
-217 077
-59 905
0
-562 290
0
-415 087
Basis for deferred tax/deferred tax asset
-543 553
-816 824
-40 748
-298 663
Deferred tax/(deferred tax asset) as of 31.12.
-135 888
-432 917
-11 002
-152 318
Temporary differences
Gain and loss account Pensions, options, accruals Over-/underlift Tax loss to be carried f<orward Uplift to be carried forward and unused uplift
Deferred tax/(deferred tax asset) recognized as of 31.12.
-568 805
36
-163 320
RECONCILIATION OF EFFECTIVE TAX EXPENSE: In NOK thousands
2015
2014
Profit before taxes
-1 334 715
-700 395
Tax at nominal rate
-1 041 078
-546 308
Recognized tax expense
-1 004 818
-515 102
-36 259
-31 206
57 891
69 701
-73 461
-136 134
Adjustments from previous years
-2 352
-240
Financial cost 27%
62 862
58 745
Interests on loss carried forward
-3 216
-2 584
Change in tax rates
-5 465
0
0
41 717
36 259
31 206
2015
2014
188 918
137 496
9 159
14 341
Exploration tax refund
599 557
581 118
Other receivables
104 734
32 917
Total
902 368
765 873
Difference Reconciliation: Permanent differences, 78 % Uplift
Tax recorded as part of asset acquisition cost Total
NOTE 9. OTHER RECEIVABLES In NOK thousands Over/-undercall lisences Underlift
NOTE 10. DEPOSITS The company’s bank deposits at the year-end include NOK 11.7 million on the account for non-distributable withheld taxes.
37
Notes NOTE 11. EQUITY In NOK thousands Equity as of 31.12.2013
Share capital
Share premium
54 089
Accumulated deficit
Total
-791 169
491 791
-13 258
-13 258
-804 427
478 533
1 228 871
Change in principle asset retirement obligation Adjusted equity 31.12.2013
54 089
1 228 871
Increase in capital
70 000
630 000
0
700 000
0
0
-185 293
-185 293
124 089
1 858 871
-989 720
993 240
20 000
180 000
0
200 000
0
0
-329 896
-329 896
144 089
2 038 871
-1 319 616
863 344
Profit for the year Equity as of 31.12.2014 Increase in capital Profit for the year Equity as of 31.12.2015
The company has changed principle for accounting of asset retirement obligations. Reference is made to note 12 for more details. Effect of change in accounting principle asset retirement obligation Change in asset retirement obligation Change in asset retirement obligation asset Change in deferred tax balance sheet Change in equity Change in 2014 depreciation Change in decommissiong and removal Change in tax cost
31.12.14 -86 975 26 129 47 461 13 258 3 547 -2 962 -456
During 2014 the share capital in the company was increased from NOK 124 088 650 to 144 088 650 with the increase of 20 000 000 shares at a nominal value of NOK 1 each. NOK 10 was paid per share, given a total capital increase of NOK 200 000 000. The capital increase was funded through conversion of intercompany loan to equity. The share capital in the company at the year-end is therefore divided into 144 088 650 shares with a nominal value of NOK 1.00 per share. All shares in the company are held by VNG – Verbundnetz Gas Aktiengesellschaft. The parent company has its headquarters in Leipzig, Germany. The parent company prepares consolidated accounts, which include VNG Norge AS and its subsidiary VNG Danmark ApS. Group accounts can be obtained from:
VNG – Verbundnetz Gas Aktiengellschaft Braunstrasse 7 04347 Leipzig, Germany
38
NOTE 12. ASSET RETIREMENT OBLIGATIONS The company has changed principle for accounting of asset retirement obligations. The provision for future decommissioning of offshore installations is recognised at the net present value of the estimated cost at the end of the installations’ lifespan, based on the assumptions of today’s technology and level of cost. Future decommissioning costs are then discounted using a risk free rate. As per 31.12.2015 the interest used is 4,0%. The 2014 numbers in the balance sheet and in the profit and loss are restated to reflect the changed principle. An overview of the effects on the 2014 numbers can be found in note 11. Assets related to removal and abandonment are also included in note 5 under “Tangible assets”. The accretion expense is classified as finance cost in the profit and loss statement. When the asset related to the removal and abandonment is depreciated to zero, an estimate change reducing the asset retirement obligation is recognised as a reversal of depreciation in the profit and loss statement. In 2015 NOK 13.9 million was recognised. Previously the provision for future decommissioning and removal obligations for producing fields was accounted for using the unit of production method. The company’s share of total estimated decommissioning and removal obligation in the producing fields in 2014 was NOK 843.2 million (real terms), of which NOK 777.6 million was included in the balance sheet per 31.12.2014 as the calculated net present value.
In NOK thousands
2015
Adjusted provision as of 31.12.2014
777 550
Decommissioning cost
23 338
Accretion
39 571
Changes in estimate
96 813
Provisions as of 31.12.2015
890 596
In NOK thousands
2014
Provisions as of 31.12.2013
147 608
Change in accounting principle
89 938
Adjusted provision as of 31.12.2013
237 546
Purchase of producing asset
548 188
Decommissioning cost
29 073
Accretion
20 889
Adjusted provision as of 31.12.2014
777 550
39
Notes NOTE 13. LONG-TERM INTEREST-BEARING INTERCOMPANY OBLIGATION The company has a group loan from VNG – Verbundnetz Gas Aktiengesellschaft. The loan is structured as a credit facility with a limit of NOK 2.5 billion or similar in foreign currency (USD, EUR and DKK). It runs until March 2016. At the end of 2015 the borrowed amounts were NOK 603 000 000, DKK 141 710 000 and USD 101 000 000. The interest on the loan is 1 month NIBOR + 3 % margin if the facility is withdrawn in NOK. No security is pledged on the loan. VNG AG and VNG Norge has agreed on two new loan agreements which will replace the credit facility from 1. April 2016. An Exploration loan facility will finance the exploration activities and the other loan facility will cover the rest of the financing needs of VNG Norge. The exploration loan facility runs until 31 December 2017 and is limited to 90% of the expected exploration tax refund (maximum NOK 1.2 billion). The facility covering capex and other corporate needs terminates at 31 December 2022 and has a limit of NOK 1.6 billion.
NOTE 14. OTHER CURRENT LIABILITIES In NOK thousands
2015
2014
30 062
47 946
Net working capital from licences
113 357
97 017
Accruals
119 777
73 486
Salaries, holiday pay and related costs
Other short-term liabilities Total
40
62 863
49 008
326 059
267 457
NOTE 15. PENSION COSTS The company is required to have an occupational pension scheme in accordance with the Norwegian law on required occupational pension (“lov om obligatorisk tjenestepensjon”). The company’s pension scheme meets the requirements of that law. The company’s pension scheme was during 2015 changed from a defined benefit plan to a defined contribution scheme. The defined benefit plan was terminated 30 June 2015. The net pension asset was used to fund the pension contributions in the new pension scheme. The defined benefit plan gave the right to defined future benefits, which were mainly dependent on number of years worked, salary level at the time of retirement and the amount of payment from the national insurance fund. The obligations were covered through an insurance company. Employees covered under the scheme would have received 66% of their pay up to 12G at a retirement age of 67 years. At the end of 2014, 82 employees were covered by the scheme. Provisions for future pension commitments are made in accordance with calculations performed by an actuary.
In NOK thousands
30.06.15
31.12.14
Service costs
9 235
12 692
Interest costs on obligation
1 926
1 964
531
-1 370
Return on plan assets Administration costs
77
92
1 044
635
0
0
Net pension costs defined benefit plans
12 813
14 013
Defined benefit obligation
69 154
62 031
Fair value of plan asset
59 501
41 625
Unrecognised net actuarial loss
21 003
26 074
0
0
11 350
5 668
Amortisation of net actuarial losses (gain) Social security costs
Social security costs Net pension assets
The calculation of future pension commitments is based on the following economic assumptions (published by NRS in September 2014): 30.06.15
31.12.14
Expected return on plan assets
3.3%
3.8%
Discount rate
2.5%
3.0%
Rate of compensation increase
2.5%
3.3%
Expected increase in social security base amount (G)
2.3%
3.0%
Expected increase in pensions
0.0%
1.0%
41
Notes NOTE 16. NET FOREIGN EXCHANGE GAINS AND LOSSES In NOK thousands
2015
2014
Foreign exchange gain/(-loss), realised items
1 079
20 887
Foreign exchange gain/(-loss), unrealised items
-137 571
-155 943
Total
-136 492
-135 056
Most part of the unrealized loss is related to our intercompany loan in USD.
NOTE 17. INVESTMENT IN SUBSIDIARIES On 17 May 2010 VNG Norge AS established VNG Danmark ApS, in Denmark. The subsidiary has its registered office in the municipality of Copenhagen, Denmark, but is operated by the company, which owns 100% of VNG Danmark ApS. VNG Danmark ApS has a book value of NOK 268.2 million in the company’s balance sheet. VNG Danmark ApS’ financial result for 2015 is DKK -21.6 million and booked equity is DKK 110.3 million.
NOTE 18. FINANCIAL RISK The company is exposed to changes in prices on crude oil and natural gas. No contracts to reduce future price risks were executed in 2015. Similarly, the company is exposed to changes in exchange rates, especially USD. No futures or similar contracts have been made to reduce the company’s currency risk. The company considers the creditworthiness of its clients to be very good and therefore considers the risk of default low.
42
NOTE 19. RESERVES, TERM OF LICENCE ETC. (Not audited) The company operates with total remaining proven and probable reserves in standard cubic metre oil Equivalents (Sm³ oe). Reserves
mill. Sm³ oe
mill. Boe
Oil
1,910
12,013
Gas
0,451
2,837
NGL (Natural gas liquids)
0,287
1,805
Total
2,648
16,655
Reserve estimates are based on the company’s own calculations of proven and probable reserves. The calculations are based on the definitions in “Guidelines to classification of the petroleum resources on the Norwegian continental shelf” (Norwegian Petroleum Directorate, 2001). The reserves can be assigned to the following fields: License period
Estimated remaining production period
Brage
2030
12 yrs
Njord
2021
14 yrs
Hyme
2029
13 yrs
Draugen
2024
12 yrs
NOTE 20. TRANSACTIONS WITH RELATED PARTIES Related parties
Connection
Ownership
Parent company
100 %
Subsidiary company
100 %
In NOK thousands
2015
2014
Sale of services to VNG Danmark and VNG AG
5 074
8 825
461
4 214
3 405
4 421
67 202
59 609
2015
2014
382
534
0
279
382
255
VNG – Verbundnetz Gas Aktiengesellschaft (VNG AG) VNG Danmark ApS (VNGDanmark)
Recharge of costs to VNG Danmark and VNG AG Purchase of services from VNG AG Interest expense on long-term loan from VNG AG The reserves can be assigned to the following fields: In NOK thousands Accounts receivable Accounts payable Total
NOTE 21. FUTURE COMMITMENTS The company has no future commitments related to drilling of wells as operator as of 31 December 2015.
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Auditorâ&#x20AC;&#x2122;s report
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Country by country report
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ONLINE www.vng.no post@vng.no TELEPHONE +47 51 53 89 00 MAILING ADDRESS Postboks 720 Sentrum Nâ&#x20AC;&#x201C;4003 Stavanger