Oslo Stock Exchange down 1.1%, weighed down by oil drops – Stocklink financial information

Oslo Stock Exchange down 1.1%, weighed down by oil drops – Stocklink financial information

With a significant drop in oil prices were heavily oil-related stocks Wednesday at the Oslo Stock Exchange, which fell 1.07 percent to 602.84 points.

At closing on the exchange was burnt oil traded at $ 95.3 per barrel, down $ 1.3 pronounced since closing yesterday, and the lowest level since the summer of 2012.

Oil Crackling

The last of the day declines attributable including reports of increased oil supply from the oil cartel OPEC, but from analysts hold predicted that the bottom has been reached in oil prices. The decline from the peak in June of $ 115 has come in the wake of weaker balance between supply and demand coupled with lower risk premiums.

– We’re at the bottom now, for both burned and WTI, said commodity analyst Jens tangible presence Pedersen Danske Bank to Bloomberg, citing that OPEC has expressed concern about the price drop, which indicates that the oil taps will be turned again to stabilize oil prices.

The Marketplace gave drop in oil prices resulted in oil-related stocks. Among the biggest, Statoil and Seadrill sent down respectively 0.9 percent and 1 percent, while the second oil companies got even heavier. Seismic companies PGS and TGS fell respectively by 2.9 and 4.6 percent, Aker Solutions was down 3.9 percent, Subsea 7 fell 4.5 percent and Fred. Olsen Energy fell 4 percent.

Bloodbath in oil companies

Most of all dropped the small oil company Noreco. After an avalanche of bad news ended the stock down 76 percent, and from analysts hold considered that the company will have to take drastic measures.

On the morning of Wednesday announced Noreco the shutdown on the important Huntington field, large write-downs and that there is a risk that the company will not be able to meet its financial obligations. As if that’s not enough pull Chairman and a Director on the day.

– Noreco’s recent operational and financial update looks like a nightmare, says Swedbank analyst Teodor Sveen Nilsen in an update.

The Huntington Noreco, which owns 20 percent, have been told that the field from October 1 will have limited access to export gas, which will cause the field to 18 October will be able to produce up to 3,500 barrels of oil equivalent per day.

Then, a system related to exportation be closed from 18 October through the month. It comes in addition to a shutdown period from 1 November to 5 December 2014 It is not expected anything from oil Huntington during this period, according to Noreco.

– These new information about a prolonged shutdown Huntington field creates uncertainty whether the Company will be able to meet its financial obligations and covenants in these agreements at the end of the year, warns oil company.

– Massive impairment

At Huntington Noreco can additionally be forced to take write-downs of around 700 million after tax, as a result of much lower Huntington-production in 2015, the operator budgets than Noreco has in its forecasts.

– There is a surprising and massive write-downs on the Huntington field, which means cutting values ​​so much that there is a significant risk of the debt exceeds the value of the assets, says analyst Henrik Madsen at Arctic Securities The online newspaper Stocklink.