Lysaker, February 15, 2019, Main events from Magnora’s fourth quarter 2018:
- On June 07, 2018 Magnora ASA (former Sevan Marine ASA) (the “Company” or “Magnora”) entered into an agreement to sell its intellectual property, shares in HiLoad LNG AS and to transfer certain other assets and obligations, including employees, to Sembcorp Marine Integrated Yard Pte Ltd (“SMIY”). The transaction was completed on September 4, 2018, and the Company received the agreed cash consideration of USD 39 million. The Company retained its net cash position, the Dana Western Isles license agreement and the financial benefit of the Shell Penguins license agreement.
- At the annual general meeting held on May 24, 2018, shareholders approved a share capital reduction and return of NOK 0.50 per share to shareholders. In addition, at the extraordinary general meeting held on July 06, 2018, shareholders approved a further share capital reduction and return of NOK 2 per share to shareholders. At the extraordinary general meeting held on October 12, 2018 Magnora also agreed to pay an interim dividend of NOK 6.0 per share. On November 13, 2018, following agreement with Teekay, the above distributions totalling NOK 447 159 492 or NOK 8.5 per share were paid to shareholders.
- On July 06, 2018, Teekay and a group of shareholders entered into an agreement whereby Teekay agreed to offer its 43.5 percent shareholding in Magnora to all other shareholders in Magnora on a pro rata basis for a price of NOK 10 per share, subject to adjustment for any distributions from Magnora until completion of the offer (the “Teekay Offer”). Upon completion of the Teekay Offer, Magnora agreed to withdraw the lawsuit against Logitel Offshore Pte Ltd. and the parties have agreed not to bring or pursue any other claims against each other and their affiliates in relation to activities prior to July 06, 2018. The Teekay Offer expired on November 9, 2018 and the Teekay Offer was completed on 12 November 2018. Settlement and delivery of the shares was completed on November 19, 2018.
- At the extraordinary general meeting held on December 18, 2018, a new board consisting of Mr. Torstein Sanness (Chairman), Hilde Ådland (Board Member) and John Hamilton (Board Member) was appointed.
- At the extraordinary general meeting held on December 18, 2018, an authorisation was also granted to the Board of Directors to initiate a share buyback program. The program was launched on January 16, 2019.
- Following the transaction with SMIY and Teekay Offer, the current main business focus of the Company is managing the Western Isles and Shell Penguins license agreements.
- The Western Isles agreement gives Magnora the right to USD 0.5 per barrel of oil produced and offloaded from the Western Isles FPSO (the “FPSO”) during the lifetime of the FPSO. The FPSO is owned and operated by Dana Petroleum and is currently producing at the Western Isles development in the UK sector of the North Sea. First oil was achieved in Q4 2017. The FPSO has a production capacity of 44,000 barrels per day. The related revenue for Q4 2018 was NOK 13.4 million (NOK 13.8 million) which was the equivalent of approximately 33 550 barrels per day on average for Q4 2018 compared with 36 500 on average for Q3 2018.
- The Penguins agreement gives Magnora the right to future license income of approximately USD 16 million from the Shell Penguins FPSO project. The Penguins FPSO is currently under construction in Asia. The payments of USD 16 million in total, are tied to three milestones. These three milestones are: 1) the completion and sail away of the FPSO from the construction yard 2) the installation of the FPSO at the field and achievement of first oil, and 3) the successful production, offloading and gas export of 4 million barrels which is estimated to be approximately 6 months after successful start-up. It is anticipated that the construction of the Penguins FPSO will be completed in Asia during mid 2021. Achievement of the further milestones will take place subsequently.
- Adjusted EBITDA, excluding one-off items, was NOK 10.8 million (NOK 9.6 million), an increase of NOK 1.3 million versus the third quarter. The driver for the increase was a reduction in the operating cost of NOK 1.3 million, mainly due to reduced cost in Magnora’s two Asia subsidiaries, Sevan Asia Pte Ltd and Sevan Shanghai Co Ltd, which entered solvent liquidation in Q3 combined with lower overhead cost in Magnora ASA. The liquidation process expected to be completed by year end 2019.
- Operating costs, including one-off items, decreased by NOK 12.8 million compared to the third quarter 2018 to income of NOK 0.3 million (NOK 12.5 million cost). The main driver for the decrease was a reduction in one-off costs in total of NOK 11.6 million mainly due to the reversal of accrued Logitel related legal fees (NOK 4.1 million) and reduced transaction cost as the SMIY transaction was completed in Q3. Excluding one-off items, operating costs in the quarter decreased by NOK 1.3 million to NOK 3.2 million (NOK 4.5 million).
- Net profit increased to MNOK 57.5 driven largely by the recognition of a deferred tax asset of NOK 42.8 million in the quarter. The deferred tax asset is based on the current tax rate in Norway and estimated taxable income the next 5 years. The book value of the deferred tax asset represents a minor part of the total accumulated tax losses.
Please see Magnora 2018 Q4 Report below
Magnora 2018 Q4 Report
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For more information please contact:
Reese McNeel, CEO, Magnora ASA
+47 415 08 186
The information in this announcement is subject to the disclosure requirements of the Norwegian Securities Trading Act section 5-12 and/or the Oslo Børs – Continuing Obligations.