Annual report
2021
Contents
North Energy at a glance .............................................................................................................. 3
CEO’s Statement ............................................................................................................................................. 4
Directors’ report ................................................................................................................................................ 8
Corporate Governance ..................................................................................................................... 18
Financial Statements & Notes ............................................................................................ 24
Responsibility Statement ............................................................................................................... 50
Shareholder Information ................................................................................................................ 52
Auditor’s report ................................................................................................................................................... 54
North Energy at a glance | 3
North Energy at a glance
North Energy ASA (“North Energy” or “Company”) is an industrial investment company
seeking to provide shareholders with an attractive return on its shares based on a
strategy of active ownership. The Company is investing within the energy value chain
and other industries and its vision is to be a successful and respected investment
company with focus on long term value creation.
Key figures
In 2021 the main investments of North Energy have been shares in
Reach Subsea ASA (“REACH”) and shares in Touchstone Exploration Inc
(“TXP”). In addition, the Company made its first investment within the
renewable sector represented by the ownership in Wind Catching
Systems AS. All investments are held directly under North Energy.
At the end of 2021, the Company counted 2 full time employees. In
addition, the Company had ongoing consultancy agreements with
2 senior advisors. From 1st of January 2022 the senior advisors have
been employed by the Company in the roles as co-CEO. North Energy’s
head office is in Oslo. The Company is listed on the Euronext Expand
Oslo Stock Exchange with the ticker “NORTH”.
MNOK 2021
2020
Earnings before tax -46.2 138.2
Tax 18.4 -17.8
Net result -27.8 120.4
Total Assets 339.0 424.1
Equity 321.3 401.9
Equity % 95% 95%
Market capitalisation 31.12 319.0 303.6
4 | Dear shareholder
Global economy
The year 2021 has been a year of continued
strong performance in global financial markets.
The Oslo Stock Exchange (OSEBX) benchmark
index appreciated by 24.3% in 2021, continuing
its strong performance in the aftermath of the
spring 2020 stock market correction. Other
international indices have also performed
strongly with the S&P 500 index rising by 27.2%.
Despite the Covid-19 pandemic continuing to
affect the global economy, global GDP growth
for 2021 is estimated by IMF at 5.9% which is the
strongest year since the global financial crisis in
2008. Both monetary and fiscal policies globally
continue to be highly accommodative despite
indications of reduced quantitative easing and
higher interest rates from global central banks.
Inflation across the global economy rose rapidly
in 2021 and is becoming an increasing source of
concern.
Energy markets in 2021
Energy markets also continued their recovery
in the aftermath of the Covid-19 shock with
favorable developments seen across both crude
oil, electricity, and natural gas. The European
electricity markets were particularly dramatic
with extreme levels of volatility and electricity
prices rising to unprecedented levels in H2 2021
across many parts of Europe.
Brent crude oil benchmark rose from $51/bbl
to $79/bbl through 2021 and have continued to
increase in early 2022 to levels not seen since
2014. Natural gas prices were also very strong,
particularly in Europe, with Dutch TTF natural
gas prices increasing from €18/MWh to a peak
of €180/MWh towards late 2021. US natural gas
prices rose from $2.5/MMBtu to $3.5/MMBtu
with periodic spikes above $6/MMBTu. Global
regional spreads in natural gas markets continue
to be very high with Asian prices ending the
year above $30/MMBtu and European prices
in H2 2021 rising to as much as $60/MMBtu. In
absolute terms, prices for natural gas reached
historically high levels in many parts of the world
and spread to per barrel equivalents with crude
oil have also been extraordinary with natural gas
trading at substantial premiums to crude oil.
The year 2021 has also been a year of
heightened volatility in energy markets as
wind and solar production form a greater part
of the electric production mix. Production of
energy from renewable sources, with variable
output depending on weather conditions, has
underlined the need for increased investments
in clean base load and/or storage solutions to
align greener forms of electricity production
with demand. Given price developments in
electricity and natural gas markets, major
imbalances in global energy infrastructure are
emerging and becoming increasingly evident as
the world transitions towards cleaner sources of
energy.
Dear Shareholders!
The year 2021 in brief:
• Comprehensive income of -27.8 MNOK
• Paid dividends of NOK 52.8 MNOK (NOK 0.45 per share)
• New team of co-CEOs appointed in December 2021
• Continued work on developing our portfolio of investments
Dear shareholder | 5
As previously stated, our strategy has
generally been to avoid early phase, venture,
or similar types of companies with significant
technological risks and unproven business
models. We continue to have a clear preference
for companies with established business models,
revenue generation and potential for high return
on capital. Despite this, we completed our first
early phase investment in late 2020 through
investing in Wind Catching Systems. We are
pleased with our investment in Wind Catching
Systems which has also provided the company
with valuable insights in respect of investing in
early phase companies.
In our 2020 Annual Report we highlighted the
increased technological risks related to the
energy transition as the long-term demand
outlook for carbon intensive energy sources
such as oil and gas is uncertain. Despite high
profitability in the short term, demand for
conventional energy will ultimately start to
decline at some point as the world transition
towards a decarbonized society. Being energy
investors with a long-term perspective, this
implies that we are forced to adapt and form
views on the future of energy technology. High
prices for conventional energy sources are
also likely to accelerate the transition towards
decarbonized solutions and as the political
pressure to decarbonize increases this will
become increasingly evident.
The backdrop of higher energy prices has been
good for the company’s portfolio of investments
with underlying operations in Reach Subsea,
Touchstone Exploration and Wind Catching
Systems all developing favorably in 2021. Despite
significant share price volatility, particularly in
Touchstone Exploration, we believe significant
progress has been made towards becoming a
leading oil and natural gas producer in Trinidad.
Perspectives on the future
Innovation in energy technology continues to be
a focus for North Energy. We are continuously
searching for investment opportunities that
provide energy solutions in a more cost-
effective way with a reduced carbon emission
footprint. This applies both to developing our
existing portfolio of investments as well as new
opportunities.
Through a combination of robotic technology and
autonomous operations, Reach Subsea intends
to significantly lower the cost, eliminate the
operational risk to offshore personnel, and reduce
the carbon footprint of subsea services. At current
European electricity prices, the competitiveness
of floating offshore wind solutions is increasing
rapidly and if current electricity prices are
sustained, many applications of floating offshore
wind have likely reached grid parity levels already.
This would be a true game changer in terms of
technology adaptation.
Energy investments
Investments in conventional oil and gas markets
are recovering but continue to be at low levels
compared to the historical highs reached in
the years 2012-14. Regardless of ongoing efforts
to transition global energy supply towards
sustainable solutions, conventional energy such
as coal, natural gas and crude oil continue to
form the backbone of global energy supply.
Investments in renewable energy reached a
new all-time high in 2021 and the outlook for
increased investments in renewable energy is
still favorable.
Increased investments in energy are
required to meet increasing energy demand,
particularly from the middle class in emerging
economies. While the higher energy prices
we have seen in 2021 are likely to stimulate
increased investments, energy prices may stay
elevated for some time both due to regulatory
developments and the generally long lead
time on new investments. We also expect that
elevated energy prices could have an impact
on both consumer and business behavior.
Although mitigating actions have been taken
by many governments to dampen the effect of
higher energy prices, the feedthrough effects
of sustained higher energy prices may have
significant impacts on both inflation and global
GDP growth in the coming years.
6 | Dear shareholder
entry of Wilhelmsen New Energy as a major
co-shareholder in Reach Subsea complete the
strategic building blocks surrounding Reach
Remote, further strengthening the commercial
potential. These initiatives will give Reach Subsea
access to cutting edge proprietary technology,
strengthen its competitive position through
offering clients better and more cost-effective
solutions, and access to a broader network.
Although a certain level of normality has
returned to the valuation of newly established
companies, valuations continue to be quite
elevated and discount likelihoods of commercial
success we mostly find unrealistic. In general,
stock market valuations are elevated, and we will
continue to take a cautious approach in terms of
new investments while working on developing
our existing holdings.
Rachid Bendriss
co-CEO
Didrik Leikvang
co-CEO
see a clear path towards commercial adaptation
of new technology.
Wind Catching Systems is a good example
of this, being an innovative solution for
floating wind turbines that is mostly based on
conventional technology. The company has
further development work to complete before
it is ready for commercial adaptation, however
we see a clear path towards commerciality
as both regulatory developments and higher
energy prices is rapidly making floating
wind cost competitive. We also believe Wind
Catching Systems has a strong competitive
advantage being approximately 5 times more
efficient in use of maritime acreage compared
to competing solutions. Acreage efficiency is
already becoming a topic of political interest
as the offshore wind industry increasingly
competes for coastal acreage with other
maritime industries and stakeholders.
Through our active ownership, we also seek out
new technology initiatives within our existing
portfolio of industrial holdings. Reach Subsea
has strengthened its technological footprint and
in-house data management capabilities, both
through the Reach Remote project as well as the
acquisition of Octio, MonViro and iSurvey. Our
active ownership strategy also involves bringing
in strategic partners that can help unleash the
inherent potential in our holdings. As such, the
The key enabler for new technology adaptation
will generally either be solutions that are more
cost effective, better, or more readily available
than existing solutions. In respect of energy
markets, we believe the sustainable transition
is closely related to the cost and regulatory
environment of CO2 emissions. Both through
government subsidies and regulations, the
absolute and relative cost of higher CO2
emissions will rise over time, and ultimately
translate into increased attractiveness of
decarbonized alternatives, both in terms of
user affordability and availability. As we have
previously highlighted, new sources of energy
need to be both cost effective and practical
for the transition to a sustainable society to
succeed.
Within this strategic backdrop we intend to
develop our portfolio of industrial holdings in
accordance with our stated philosophy as value
oriented and contrarian investors. Our view
is that there is inherently no conflict between
‘growth’ and ‘value’ based investing, as value is
always a function of both existing cash flows and
projected growth in future cash flows. Although
most of our investments will continue to be cash
generative businesses, we also intend to increase
our focus on growth-oriented technology
opportunities. The key criteria being i) we believe
these offer an attractive risk/return, ii) they have
understandable technological risks, and iii) we
Dear shareholder | 7
Directors’
report
Directors’ report | 9
Despite the continued uncertainty related to the
covid pandemic, the global economy and stock
markets performed well during 2021. The value
of North Energy’s investments, on the other
hand, have in total remained fairly unchanged.
Touchstone Exploration entered 2021 with high
expectations, but covid-related delays in the
start-up of production at Coho and Cascadura
and the production test of the Chinook discovery
deeming it non-commercial disappointed
the market. Thus, the Touchstone share price
depreciated by 28% during the year leading to
a NOK 44.7 million value reduction for North
Energy. This was compensated by our investment
in Reach Subsea where a share price appreciation
of 37% and dividends received gave North Energy
a value contribution of NOK 44.7 million. The
strong performance of the Reach Subsea share
was fuelled by the company’s record results for
2021, exceeding the previous record set in 2020.
At the end of the year, North Energy had 2 full-
time employees, which is the same as at the end
of 2020.
Important events
Market development
Despite the ongoing challenges as a result of
COVID-19, the Company continued to manage
the business prudently during the year. 2021
has been a year of contrasts with a boom and
the Financial Supervisory Authority of Norway
(Finanstilsynet). North Energy’s main strategy
as an industrial holding company is through its
ownership to exercise significant influence in the
various investment objects. The main purpose
is to get a return through owning companies
that generate value from their operations, and
not through buying and selling companies and
financial instruments. Against this background, it
is thus the Board’s conclusion that North Energy
can not be classified as an AIF.
North Energy’s current mandate from
shareholders is to own, manage and provide
financing for activities within the energy industry,
and other industries where the company has
relevant competence. The Company is an
industrial holding company with a portfolio of
independent investments, both listed and unlisted.
The Board has considered whether North
Energy can be classified as an alternative
investment fund (AIF) subject to regulation by
Board of Directors’ Report 2021
The business
North Energy ASA (“North Energy” or “Company”) was established in 2007 with
the goal of exploring commercial accumulations of oil and gas on the Norwegian
Continental Shelf (“NCS”). The Company’s business is conducted from its offices
located in Oslo. In May 2016, an extraordinary general meeting resolved a new strategy
and business model whereby North Energy would become an industrial holding
company pursuing investment opportunities in the energy sector. In July 2017, the
Board of Directors of North Energy decided to discontinue the Company’s petroleum
activities on the Norwegian Continental Shelf (“NCS”) and to close the subsidiary North
E&P, which was the base for all petroleum activities in North Energy. The closure of
North E&P and the simplification of the Company’s legal structure was completed
in 2020, resulting in a structure with only one legal entity, North Energy, holding all
investments and carrying out business activities.
10 | Directors’ report
following bust in energy transition related stocks,
a surge in virtually all commodity prices, global
central banks embarking on a path of monetary
tightening, and supply chain bottle necks
emerging in various pockets in a rebounding
global economy. This has affected North
Energy’s most important investment segments
through higher energy prices, increased demand
for offshore subsea services, and increased
demand for renewable energy production
solutions. North Energy has a healthy balance
sheet with no interest-bearing debt and has
through 2021 remained cautious in its approach
towards new investments.
North Energy will remain focused on protecting
health of employees and communities and
continue to follow advice from public health
officials.
Corporate matters
In December, the Board of North Energy
announced the following changes in the
Management team. Mr. Knut Sæberg retired
from his position as CEO on 31 December
2021. Effective from 1 January 2022 Mr. Rachid
Bendriss and Mr. Didrik Leikvang accepted
roles as co-CEOs in the Company collectively
responsible for managing the business. Both Mr.
Bendriss and Mr. Leikvang have since 2016 been
engaged as strategic and financial advisors for
the company. Further, Mr. Rune Damm, Finance
manager since 2015, has from 1 January 2022
assumed the role as CFO.
Investment in Reach Subsea
Reach Subsea ASA (Reach) is a company listed
on Oslo Stock Exchange with the objective
to become a leading subsea service provider,
offering solutions to survey the seabed and
solutions for maintaining the integrity of the
client’s subsurface equipment and infrastructure.
During the year, Reach has delivered record
high results exceeding the previous record set
in 2020. The result is driven by high utilization
and successful project execution. Reach has
continued the development of the Reach
Remote project, a new innovative solution for
providing subsea services on a remote and
autonomous basis, reducing cost and risk to
personnel and eliminating carbon footprint.
The company states that it is on track for 2023
delivery of Reach Remote.
After year-end, Reach announced two major
strategic initiatives with the acquisition of
offshore survey specialist iSurvey Group
AS, and the strategic co-operation with
Wilhelmsen New Energy on Reach Remote.
The agreement with Wilhelmsen New Energy
involves a directed equity issue of NOK 150
million, providing equity funding for the first
two Reach Remote unmanned service vehicles.
Through these initiatives, Reach will strengthen
its in-house capabilities on data management
and processing, an important feature of
Reach Remote, and strengthen the set-up for
commercialisation of Reach Remote.
The company is very well positioned for the
future, with a financially well performing existing
business, a solid plan in place for reshaping the
delivery model and backed by a strong financial
position with some NOK 350 million in cash and
working capital following completion of the NOK
150 million equity injection from Wilhelmsen
New Energy.
The Reach-share has during the year provided
a total return, including dividends, of 44%. North
Energy has a shareholding of 32% in Reach
and is represented with two members in the
board of the company. Upon completion of
the two announced major strategic initiatives,
North Energy and Wilhelmsen New Energy will
be joint major shareholders of Reach with 21%
each.
Investment in Touchstone Exploration
Touchstone Exploration (TXP) is a Canadian
based company, being listed both on the
London and Toronto stock exchanges. The
company has during 2021 completed its 5 well
exploration programme on the Ortoire Block on
shore Trinidad.
Directors’ report | 11
innovative technology for floating offshore wind
systems (“WCS technology”). The wind turbines
are designed for all weather conditions, with the
potential to produce electricity at a significantly
lower cost and with substantially less use of
space than any other known technology today.
Together with its key technology partner Aibel
AS and IFE (Institute for Energy Technology),
and with support from Innovasjon Norge, the
company intends to finalize and commercialize
the WCS technology. The company continues to
develop its organization in parallel with maturing
the technology and concept together with its
key technology partners Aibel and IFE.
The development of the Windcatching
technology is progressing as expected. The
first stage of the wind tunnel testing in Milano,
aimed at verifying some of the key design
features, was completed during the summer
of 2021. The results were encouraging, and
the company has now verified that the tested
design features revealed results on par with,
or better than, assumptions used in the wind
energy model. Further engineering work will
continue in 2022 with key areas of focus being
marine engineering and equipment design in
partnership with Tier 1 equipment providers to
optimize the operating performance of the unit.
Discussions are also ongoing with respect to
future client adoption for the WCS concept.
Coho-1 was the first well drilled in the 5-well
programme on the Ortoire Block. The company
estimates the net future production rate from
Coho-1 to be in the range from 1,300 – 1,600
barrels of oil equivalent (boe) per day, which will
double the company’s overall production.
The two Cascadura wells are targeted for
production in the third quarter of 2022. The
company estimates the net future production
rate from Cascadura to be in the range of 10,000
– 13,000 boe per day, with additional upside from
future development wells.
Touchstone expects production from the Ortoire
block to increase cash flow significantly and
contribute to a substantial reduction in volatility
of future earnings. Based on the natural gas
sales agreement with the National Gas Company
of Trinidad and Tobago, Touchstone has secured
offtake for all natural gas produced from the
Ortoire license.
The Touchstone share has in 2021 depreciated
by 24%, measured in NOK. North Energy has a
shareholding of 6% in the company and is not
represented in any of Touchstone’s governing
bodies.
Investment in Wind Catching Systems AS
In March 2021, North Energy declared its option
to invest an additional NOK 10.0 million in Wind
Catching Systems AS (WCS), which holds a new
During the fourth quarter, the company
announced the completion of drilling of the
Royston-1 exploration well and the drilling results.
The well, which is the deepest exploration well
drilled by Touchstone to date, encountered
substantial hydrocarbon accumulations. An
aggregate of 393 gross feet of hydrocarbon pay
was identified in two unique thrusts sheets in the
Herrera GR7 and GR7bc sands. The three planned
production tests of Royston-1 confirmed a light oil
discovery both in the lowermost section and the
upper most section of the well. The company plans
to perform an extended production test designed
to assess optimal flowing conditions to maximize
production and data collection. Additional
information from the long-term production test is
anticipated during the first quarter 2022.
Middle Miocene turbidite deposits have
historically been prolific producers onshore
Trinidad. As highlighted by the company, the
Royston-1 well did not target the best sands in
the lower intermediate Herrera GR7a sheet and
future wells are likely to be optimized to target
these sections. A light oil discovery in Royston-1
also bodes well for the Krakken well planned for
2022, in which the company intends to target a
very large cretaceous turbidite play similar to the
Guyana/Suriname discoveries.
The company aims to bring the Coho-1 discovery
onto production during the first half of 2022.
12 | Directors’ report
The Board is not aware of any significant
considerations that affect the assessment of
the Company’s position as of December 31,
2021, or the net result for the year, other than
those presented in the Directors’ report and the
financial statements.
Revenues reported in 2021 was NOK 0.2 million
while the revenues reported in 2020 was NOK
0.1 million. The revenue for 2021 is related
to consultancy services. Payroll and related
expenses in 2021 were NOK 9.2 million, up
from NOK 4.2 million in 2020. Other operating
expenses in 2021 were NOK 18.4 million, up from
NOK 12.2 million in 2020. The increase in payroll
expenses is due to a severance compensation to
the former CEO. The increase in other operating
expenses is explained by the provision for
potential liabilities.
Operating loss for 2021 was at NOK 46.7 million,
versus an operating profit of NOK 135.5 million
for 2020. The decrease is mainly the result of
decreased market value of investments as well
as higher operating expenses. The market value
of the investment in Touchstone Exploration
dropped by NOK 44.7 million through the year,
while the investment in the associated company
Reach Subsea contributed with an income
through profit and loss of NOK 30.3 million for
the year.
As per year-end 2021, North Energy had NOK
326.6 million in total investments measured
at market value. In addition, the Company
had a cash position of NOK 40.0 million. The
corresponding figures from 2019 were NOK
305.8 million in investments and NOK 119.3
million in cash.
Going concern
Pursuant to section 3-3a of the Norwegian
Accounting Act, the Board confirms the going
concern assumption and that the financial
statements are prepared on this basis. That
assumption rests on the Company’s financial
position, as well as forecast for 2022.
Comments on the annual financial
statements
The financial statements of North Energy
ASA have been prepared in accordance with
International Financial Reporting Standards
(“IFRS”) as adopted by the European Union and
in accordance with the additional requirements
pursuant to the Norwegian Accounting Act.
After completion of the intra-group merger
between North Energy ASA and North Energy
Capital AS in the third quarter 2020, North
Energy ASA is the only remaining Company
in the Group. Comparison figures presented
for 2020 are the consolidated figures for the
former Group.
North Energy has a shareholding of 31% in
the company on an undiluted basis (26% on a
fully diluted basis) and is represented on the
board of directors with one member and one
observer.
Other investments
North Energy has several minor investments
with a combined market value of approximately
NOK 23 million at the end of 2021. During the
year the Company sold Interoil shares that were
received in 2020 in a partly conversion of Interoil
bonds. Number of Interoil bonds owned by
North Energy remains 0.8 million.
In December 2021, North Energy invested NOK
8.9 million in a private placement in Chariot Ltd.
(Chariot), which is an Africa-based transitional
energy company aiming to be a provider of
cleaner energy across the African continent
via its Transitional Gas and Transitional Power
business streams. The company has a high value
gas project in Morocco and an exciting new
venture in renewable hybrid energy focused on
Africa. Chariot Ltd.’s shares are traded on the
London stock exchange.
Tyveholmen AS, which is 50% owned and
accounted for as an associated company,
contributed with a profit of NOK 0.3 million in
2021.
Directors’ report | 13
investments for NOK 11.0 million, and a negative
cash flow of NOK 15.6 million from the operating
activities.
The operating profit before tax is lower than
cash flow from operating activities mainly due
to unrealized loss on financial investments partly
offset by income from associated companies.
The Company has no costs and no activities
related to research and development.
The Board regards the Company’s financial
position as of end 2021 as solid. The coronavirus
pandemic represented a continued uncertainty
to the global economy, although developments
in global capital markets have been strong in
2021. The Board expects that full economic
normalisation will still take time for many sectors
with particularly high uncertainty related to
supply chain challenges and normalization of
interest rate policies globally.
Allocation of net profit
The Board of North Energy proposes that the
net loss of NOK 27.8 million in the company is
transferred to other equity.
Corporate governance
Corporate governance in North Energy is based
on the Norwegian code of practice for corporate
governance. A separate status report related
Total assets at year-end were NOK 339.0 million,
down from NOK 424.1 million at year-end 2020.
The decrease is mainly due to a reduced book
value of investments and the payment of NOK
52.8 million in dividends to shareholders.
Total equity at the end of the year was NOK
321.3 million, down from NOK 401.9 million at
the end of 2020. The decrease is explained by
total comprehensive loss of NOK 27.8 million
last twelve months and by dividend payment
to shareholders of NOK 52.8 million. The
Company’s equity ratio stood at 95.0 percent at
the end of the year.
The company has no interest-bearing debt
beyond IFRS 16 related lease liabilities at the end
of the year.
North Energy recorded NOK 40.0 million in cash
at the end of the year. This is down from NOK
119.3 million at the end of last year mainly due
to dividend payment of NOK 52.8 million, cash
outflow from investing activities of NOK 11 million
and operating expenses.
Net cash flow was negative by NOK 79.3 million
in 2021, compared to a positive NOK 91.3 million
for 2020. The main reason for the negative cash
flow for this year is the payment of dividend
to shareholders of NOK 52.8 million, the net
proceeds from sale and purchase of financial
Net financial items for 2021 were positive at NOK
0.5 million, versus NOK 2.7 million for 2020. The
positive figure this year, as well as last year, is
related to interest income.
The result before tax in 2021 is a loss of NOK
46.2 million compared to an income of NOK
138.2 million reported last year. The loss is
mainly due to a negative change in fair value
of investments of NOK 45.2 million offset by a
positive result from investments in associates of
NOK 26.9 million.
Change in deferred tax in 2021 is reported as
an income of NOK 18.4 million, while 2020 was
an expense of NOK 17.8 million. The amount
last year included a minor provision to cover
possible tax implications regarding an ongoing
control of the accounts covering the years 2016
up to and including 2019 from the Norwegian
Tax Administration. This provision has been
reversed in the 2021 tax figure. The company has
deferred tax assets of NOK 0.5 million that are
not recognised in the balance sheet at the end
of the year.
Loss for the year 2021 was NOK 27.8 million,
compared to an income for the year 2020 of
NOK 120.4 million. The loss amounts to both
basic and diluted earnings per share of negative
NOK 0.24 this year, versus a positive NOK 1.04
per share in 2020.
14 | Directors’ report
and managed in a systematic and cost-efficient
manner. The Company is exposed to financial
risk in various areas, as described below.
Monitoring of risk exposure and assessment
of the need to deploy financial instruments are
pursued continuously.
Operational risk
North Energy is an enterprise where operational
risk is closely related to its expertise and the
integrity of our IT systems. The Company
therefore devotes attention to developing
its expertise and organisation, ensuring that
measures for cyber security are up to date, and
to its management systems.
Market risk
With a growing investment business, North
Energy is exposed to market risk involving
the risk of changing conditions in the specific
marketplace in which the Company makes
investments. Sources of market risk include
changes in market sentiment as well as
recessions, political turmoil, changes in interest
rates, natural disasters, climate changes and
regulatory changes related to climate, and
terrorist attacks. During 2021, the Covid-19
pandemic has continued to spread throughout
the world. Many countries, including Norway,
have had a number of restrictions towards the
inhabitants leading to significantly reducing
business and social activities. The Norwegian
Several considerations, which collectively ensure
a good and broad composition, have been
considered when electing the Board. These
include an appropriate gender distribution, good
strategic, industry competence and accounting
expertise, a good division between owner-
based and independent candidates. The Board
functions collectively as an Audit Committee.
Instructions have been developed and adopted
for the CEO, the Board and the Company’s
Nomination Committee. The instructions for
the Board specify its principal duties and the
responsibilities of the CEO towards the Board, as
well as guidelines for handling matters between
the Board and the executive management. The
instructions for the Nomination Committee
specify its mandate and provide guidelines on its
composition and mode of working.
The Company’s Articles of Association provide
no guidance on the composition of the Board,
other than that it must comprise of three to nine
Directors. The articles do not authorise the Board
to purchase the Company’s own shares or to
issue shares.
Risk assessment
Overall objectives and strategy
North Energy’s financial risk management is
intended to ensure that risks of significance for
the Company’s goals are identified, analysed,
to the code has been included in this Annual
Report. Any non-compliance with the code is
specified and explained in the status report.
The Board intends to take account of all factors
relevant to the Company’s overall risk picture.
By doing so, it aims to ensure that the collective
operational and financial exposure is at a
satisfactory level. In accordance with market
practice for listed companies the Company has
purchased liability insurance to cover individual
and collective liability exposure for the board
members and CEO.
North Energy’s Articles of Association contain
no provisions which wholly or partly exceed
or restrict the provisions in chapter 5 of the
Norwegian Public Companies Act.
Directors’ report | 15
employees, and the Company office is in Oslo.
North Energy aims to have a good gender
balance and is an equal opportunity employer.
Currently there are only male employees,
however, future recruitments will be based on
the principle of equal opportunity.
At the Company’s General Meeting in April 2021,
the Board of Directors were re-elected. Out of the
three directors elected, one is female.
The rate of absence due to illness during 2021
was below 1 per cent of total hours worked.
The Board considers it to be of importance that
employees regard North Energy as a safe and
motivating workplace.
Remuneration is determined in accordance with
the content of the work and the employee’s
qualifications. The remuneration of the executive
management is described in the notes to the
financial statements. Also, in accordance with
the Public Limited Liability Companies Act §
6-16, the guidelines for remuneration to senior
executives in North Energy ASA was adopted
by the Annual General Meeting in 2021. The
signed remuneration report for 2021 will be put
forth the Annual General Meeting in 2022 and
is published together with the annual report.
The remuneration report can be found on www.
northenergy.no
through that affect our equity.
Credit risk
The Company’s receivables are as of end 2021
marginal and the risk of bad debts is, therefore,
considered low.
Foreign exchange
The foreign exchange risk through transactions
is low due to limited volumes. However, the
Company invest in securities that are registered
in foreign currencies and are through these
investments exposed to exchange rate
fluctuations.
HSE and the natural environment
The work environment in North Energy is
regarded as satisfactory. No incidents or
accidents relating to North Energy’s activities
were reported in 2021. North Energy’s goal is to
prevent any incidents or accidents to employees
or partners working with the Company and to
conduct business in a way that will not damage
the environment. Based on best judgement,
the Company’s employees will conduct their
operations in a safe, environmentally responsible,
and ethically sound manner. North Energy
will remain focused on protecting health of
employees and communities and continue to
follow advice from public health officials.
Human resources and equal opportunities
North Energy had at the end of the year two
government has offered financial rescue
packages to stabilize the economy; however,
many industrial segments are still in a disarray
with a potential value-reducing effect also for
North Energy’s investments. Although we have
seen relief in the restrictions, it is still uncertain
when the pandemic effects will abate and when
the markets will be fully recovered.
Liquidity risk
The Group’s ongoing financing needs are
forecasted on a continuous basis, and the level
of activity is tailored to liquidity. The Company’s
primary source of funding is equity.
North Energy has a solid balance sheet and a
sound financial situation with limited liabilities.
Also, it is North Energy’s assessment that the
main investments have sound financial positions,
limiting the risk of unforeseen requirements
for liquidity contributions from North Energy.
However, the fact that many business markets
are still in a disorder because of the virus and
that the time for full recovery is uncertain, this
might affect North Energy’s liquidity longer term.
Interest rate risk
As of year-end 2021 the Company is debt free
and is, therefore, not directly exposed to interest
rate changes. Fluctuations in interest rates may,
however, affect the financial position of and
the market valuation of our investments and
16 | Directors’ report
Corporate social responsibility (“CSR”)
North Energy’s vision is to be a successful and
respected investment company with focus on
long term value creation. North Energy’s most
important contribution to society is to create
value and invest in forward looking companies
that operate in an environmentally, ethically,
and socially responsible manner. The Board
of North Energy gives emphasis to a positive
contribution being made by the Company
to those sections of society affected by its
operations, while simultaneously looking after
the interests of its owners. The Company follows
this up by integrating social and environmental
considerations in its strategy and day-to-day
operations. The operations of the company
North Energy ASA have negligible effect on the
external environment. As a significant shareholder
in several companies, North Energy works to
promote businesses that are responsible and
sustainable, including the financial, social, and
environmental consequences of the operations.
This is demonstrated by the Company’s main
financial investment, Touchstone Exploration,
which emphasizes recruiting local staff and have
a high degree of female employees. Touchstone
is committed to working with partners both
at national and local levels to ensure high
environmental standards in Trinidad. Furthermore,
Reach Subsea, which is North Energy’s main
industrial investment, launched the Reach
Remote solution. This is an innovative service
Directors’ report | 17
North Energy intends to further develop the
company in accordance with its strategy,
balancing investments in conventional energy
markets with renewable energy opportunities.
Through its holdings in Reach Subsea,
Touchstone Exploration and Wind Catching
Systems the Board believes the company
is well positioned to take advantage of
continued strong demand for energy from both
conventional and renewable sources.
The Company will seek to maintain optionality
in order to successfully execute its long-term
strategy and actively seek opportunities to
develop and expand the industrial portfolio.
However, in light of the significant uncertainties
the Board still expect to take a cautious
approach in the time to come. North Energy
will remain focused on protecting health of
employees and communities and continue to
follow advice from public health officials.
Outlook
Although developments in global capital markets
have been strong in 2021, the Board expects that
full economic normalisation will still take time for
many sectors with particularly high uncertainty
related to supply chain challenges and
normalization of interest rate policies globally.
Also, elevated long term valuation levels leave
less room for future returns to be derived from
yield compression and multiple expansion.
Energy market balances have been tight in
2021 resulting in rising prices for both crude oil,
natural gas and electricity. The Board believes
the outlook for energy prices to be good due
to significant underinvestments in conventional
energy supply over the last few years. Despite
a clear global trend towards cleaner energy
sources, the demand for conventional energy
continues to be strong, which will likely support
high prices going forward.
solution which will virtually eliminate carbon
footprint when brought to market later in 2022.
North Energy has developed a policy statement
which further describes its commitment to
CSR. The document is published on www.
northenergy.no.
Ownership
North Energy had 2202 shareholders at year-
end 2021 and the top 20 owners together held
62.7 percent of the shares in the North Energy.
The share price on the last day of trading in 2021
was NOK 2.68, while on the last day of trading in
2020 the share price was NOK 2.55. The share
price peaked at NOK 4 on 19 March, while the
lowest price in 2021 was NOK 2.14 on 20 August.
Oslo, 24th of March 2022
Anders Onarheim Elin Karfjell Jogeir Romestrand
Chair Director Director
Rachid Bendriss Didrik Leikvang
co-CEO co-CEO
18 | Corporate Governance
The following information is presented according
to the same structure as the code and contains
the same 15 main elements.
1. Implementation and reporting on
corporate governance
It is the executive management’s job to ensure
that the areas of responsibility, individually and
collectively, are prioritized according to the Com-
pany’s values and business codes. The Company
has established clear guidelines for corporate
social responsibility. These can be found on the
Company’s website, www.northenergy.no.
2. The business
North Energy’s business purpose is to directly or
indirectly own, manage and provide financing for
activities within the energy industry, and other
industries where the company has relevant
competence.
North Energy targets to become a successful
and respected investment company. The Com-
pany will achieve this through solid fundamental
analysis and a focus on long-term value creation.
Where relevant, the company seeks to create val-
ue for the shareholders in a sustainable manner.
Corporate Governance
Pursuant to section 3, sub-section 3b of the Norwegian Accounting Act, North Energy is required to include a description of its
principles for good corporate governance in the Directors’ report of its Annual Report or, alternatively, refer to where this information
can be found. The Norwegian Corporate Governance Board (NCGB) has issued the Norwegian code of practice for corporate
governance (the code), which can be found at www.nues.no. Observance of the code is based on the “comply or explain” principle,
which means that companies must explain either how they comply with each of the recommendations in the code or why they
have chosen an alternative approach.
The Euronext Oslo Stock Exchange requires that listed companies on Oslo Børs and Euronext Expand provide an explanation of
their corporate governance policy annually. Current requirements for companies listed on the Oslo Stock Exchange can be found at
https://www.euronext.com/en/markets/oslo.
Corporate Governance | 19
North Energy’s Articles of Association specify
clear parameters for its operations, while its
vision, goals and strategies are at the core of its
management philosophy and operations.
3. Equity and dividends
The Company’s dividend policy, outlined on its
website, states that any payment of dividends
is based on the annual profits generated by the
operating activities of the Company. Subject
to available liquidity and financial position, the
Company intends to distribute an annual dividend
in an amount equal to 40-60% of net profits. This
dividend policy has been in effect from fiscal year
2020 with the first dividend of NOK 53 million
resolved by the annual general meeting held on
April 14, 2021. The Company has a strong financial
platform and a solid foundation for executing its
strategy as an industrial investment company. Go-
ing forward, available financial funds are expected
to be deployed to support this core strategy.
All proposals from the Board concerning divi-
dends must be approved by shareholders at the
General Meeting to ensure that the Company’s
equity and dividend are consistent with its objec-
tives, strategies, and risk profile.
Equity as of December 31, 2021, was NOK 321 mil-
lion, compared with NOK 402 million at year-end
2020, giving an equity ratio of 95 per cent, which
is at the same level as year-end 2020. Liquidity is
regarded as satisfactory in relation to the Com-
pany’s future obligations.
Cash and cash equivalents totaled NOK 40 mil-
lion as of December 31st. The Company has no
interest-bearing debt as per year end.
At the AGM on April 14, 2021, the Company’s
Board was granted authorization to increase the
share capital with 11,904,706 shares, equaling an
increase of 10 per cent. At present, this authoriza-
tion is not used.
4. Equal treatment of shareholders and trans-
actions with close associates
Should North Energy be a party to any trans-
action that may involve a close associate of the
Company or other companies that Directors,
senior executives or their close associates have a
significant interest in, whether directly or indi-
rectly, the parties concerned must immediately
notify the Board. All such transactions must be
approved by the Chief Executive Officer and the
Board and, where required, a market notification
must be sent.
5. Freely negotiable shares
The North Energy share is listed on the Euronext
Expand Oslo exchange. All shares are freely ne-
gotiable. The Articles of Association impose no
restrictions on the negotiability of the share.
6. General Meetings
The AGM is North Energy’s highest authority.
The Company’s AGM in 2021 were held in ac-
cordance with the Public Companies Act.
The Board endeavors to ensure that the General
Meeting is an effective forum for communication
between the Board and the Company’s share-
holders. Thus, the Board makes provision for the
highest possible participation by the Company’s
owners at the General Meeting. Notice of the
meeting and supporting documentation for
items on the agenda are made available on the
Company’s website no later than 21 days before
the General Meeting. Provision is also made for
shareholders to vote in advance of the Compa-
ny’s General Meeting, and elections are organ-
ized such that it is possible to vote individually
for candidates nominated to serve in the Com-
pany’s elected bodies. Shareholders who cannot
attend the General Meeting in person are able
to appoint a proxy to vote on their behalf. Proxy
forms are provided that allow the proxy to be
instructed how to vote on each agenda item.
The Board determines the agenda for the
General Meeting. However, the most important
items on the agenda are dictated by the Public
Companies Act and the Company’s Articles of
Association. Meeting minutes are published on
the Company’s website the day after the General
Meetings, at latest.
20 | Corporate Governance
7. Nomination Committee
The Nomination Committee submits recommen-
dations for candidates to be elected, along with
a justification, to the General Meeting, as well as
nominates the Chair of the Board. Furthermore,
the Committee will submit substantiated propos-
als for the remuneration of Directors and rec-
ommend Committee members. Establishment
of the Committee is stipulated by the Articles of
Association, and its work is regulated by instruc-
tions adopted by the General Meeting.
Nomination Committee members serve inde-
pendently of the Board, and the Company’s
executive management. Members of the Com-
mittee receive a fixed remuneration which is
not dependent on results. The General Meeting
decides on all recommendations made by the
Committee.
The members of the Nomination Committee are
Hans Kristian Rød (Head), and Merete Haugli.
8. Board of Directors: composition and
independence
Following the recommendation from the Nom-
ination Committee approved at the AGM, the
Board consists of two men and one woman
who serve as shareholder-elected Directors. All
have broad experience. Two of these Directors
are elected independently by the Company’s
shareholders. The Directors provide industry-spe-
Corporate Governance | 21
9. The work of the Board of Directors
The Board’s work is regulated by instructions. Its
duties consist primarily of managing North En-
ergy, which includes determining the Company’s
strategy and overall goals, approving its action
program, and ensuring an acceptable organi-
zation of the business in line with the Compa-
ny’s Articles of Association. The Board can also
determine guidelines for the business and issue
orders in specific cases. The Board must look
after North Energy’s interests, and not act as
individual shareholders.
A clear division of responsibility has been es-
tablished between the Board and the executive
management. The Chief Executive is responsible
for operational management of the Company
and reports regularly to the Board. The admin-
istration is responsible for preparing matters for
board meetings. Ensuring that the work of the
Board is conducted in an efficient and correct
manner in accordance with relevant legislation
is the responsibility of the Chair. The Board
ensures that the auditor fulfils a satisfactory and
independent control function. It presents the
auditor’s report to the General Meeting, which
also approves the remuneration of the auditor.
It was resolved in 2014 that the Audit Commit-
tee’s duties would be discharged directly by the
Board. Likewise, the duties of the Compensation
Committee, established by the Board in 2014,
is now handled directly by the Board following
On 1 July 2020, North Energy entered into new
advisory agreements with Isfjorden AS (owned
by Didrik Leikvang) and Celisa Capital AS (owned
by Rachid Bendriss) in replacement of the previ-
ous agreement with North Advisors to provide
strategic and financial advisory services to the
Company.
The new agreements, which were approved by
the Board of Directors, were based on a fixed
annual fee where the net remuneration per
advisor was at approximately the same level as
the average yearly fee under the old advisory
agreement. However, the total advisory fee paid
by the Company was reduced compared to the
average annual costs under the previous agree-
ment with North Advisors. Anders Onarheim
continued in his role as Chairman of the Board of
North Energy but is no longer an advisor for the
Company and has no common business interest
with the new advisors other than being share-
holders of North Energy ASA.
On December 8, 2021, the company announced
changes to the management whereas Mr. Knut
Sæberg retires from his position as CEO on
December 31, 2021. As of January 1, 2022, Mr.
Rachid Bendriss and Mr. Didrik Leikvang have
accepted roles as co-CEO in the company. At the
same date the advisory agreements have been
terminated.
cific professional expertise and experience from
national and international companies. More
information on each Director is available at www.
northenergy.no.
Shareholder-elected Directors are elected for
two-year terms. Elections are conducted in such
a way that new directors can join the board
every year.
Apart from Chairman Anders Onarheim, North
Energy regards its Directors as independent
of the Company’s executive management and
significant business partners. At present, all three
Directors own shares directly or indirectly in
North Energy. No director holds options to buy
further shares.
As a key part of its business strategy, North En-
ergy has elected to strengthen its management
resources. The Company negotiated in 2016
an advisory agreement whereby North Ener-
gy outsourced certain strategic, financial and
business advisory services to North Advisors AS
(“North Advisors”), an advisory company owned
by a group of key stakeholders of North Energy,
including Anders Onarheim, Didrik Leikvang and
Rachid Bendriss. As remuneration for its services,
North Advisors received a fee equivalent to 2 per
cent per year on the consolidated book equity of
North Energy.
22 | Corporate Governance
12. Salary and other remuneration of
executive personnel
On the 14 April 2021 the AGM adopted the
proposal from the Board of Directors for new
guidelines for remuneration to senior executive
in North Energy ASA. The guidelines are compli-
ant with the requirements as set out in the Public
Limited Liability Companies Act § 6-16 a, and the
Regulations on guidelines and report on remu-
neration for senior executives.
The Board determines the remuneration of the
senior executives, and the remuneration is de-
termined on the basis of an overall assessment
where the main emphasis in the variable part of
the remuneration is based on achieved results
and implementation of the strategy plan based
on the company’s values and ethical guidelines,
The Board is also considering the responsibility
involved, qualifications, the complexity of the
work and the results achieved.
The Board issues a yearly remuneration report
according to the requirements as set out in the
Public Limited Liability Companies Act § 6-16 b,
and the Regulations on guidelines and report
on remuneration for senior executives § 6. The
report should be approved at the Annual Gener-
al Meeting.
13. Information and communications
North Energy keeps its shareholders and inves-
tors regularly informed about its commercial and
financial status. The Board is conscientious that
cilitates collaboration and learning and ensures
continuity in the execution of the company’s
processes.
The executive management regularly follow
up conditions which could pose a financial
risk to the Company, and reports these to the
Board. Reporting to the Board by the Compa-
ny gives emphasis both to the on-going risk in
daily operations and to risk associated with the
investment opportunities presented. In addition,
the Board carry out an overall risk assessment
at least twice a year which takes account of all
the Company’s activities and the exposure these
involve. The Board does also at regular intervals
have the auditor’s assessments of financial risk
presented.
11. Remuneration of the Board of Directors
The Nomination Committee recommends the
Directors’ fees to the General Meeting, and takes
account of their responsibility, qualifications, time
spent and the complexity of the business. Direc-
tors’ fees are not profit-related. North Energy has
not issued any options to its shareholder-elected
Directors.
None of the shareholder-elected Directors have
undertaken special assignments for North En-
ergy other than those presented in this report,
and none have received compensation from the
Company other than normal Directors’ fees.
a resolution in a Board meeting in 2017. The
objective of the Compensation Committee is to
ensure that compensation arrangements sup-
port the Company’s strategy and enable it to
recruit, motivate and retain managers of a high
standard, while complying with requirements set
by governing bodies, fulfilling shareholder expec-
tations and being in line with the expectations of
the rest of the workforce. The Board conducts an
annual evaluation of its work, competence, and
performance.
Six board meetings were held in 2021, out of
which five meetings were conducted as video/
audio conferences while one meeting was con-
ducted physically. The attendance at the meet-
ings from the Board members were 100%.
10. Risk management and internal control
Strict standards are set for the Company’s inter-
nal control and management system. Work on
further development and improvement of North
Energy’s management system and associated
documentation is a priority job in the Compa-
ny’s corporate governance and risk manage-
ment. Emphasis have been put on developing
risk systems and internal control procedures
adapted to the Company’s strategy as an invest-
ment company. The Company’s management
system is a good tool for the executive manage-
ment and the workforce and reduces the risk of
errors and misunderstandings. The system fa-
Corporate Governance | 23
15. Auditor
The annual financial statements are audited by
PricewaterhouseCoopers AS. The Board receives
and considers the auditor’s report after the finan-
cial statements for the relevant year have been
audited. The auditor submits an annual plan for
the conduct of audit work and attends board
meetings when the consideration of accounting
matters requires their presence. In at least one
of these meetings, the auditor makes a presenta-
tion to the Board without the executive man-
agement being present. The auditor presents a
declaration of independence and objectivity. Re-
lations with the auditor are regularly reviewed by
the Board to ensure that the auditor exercises an
independent and satisfactory control function.
The Board presents the auditor’s fee to the Gen-
eral Meeting for approval by the shareholders.
to provide as correct a picture as possible of the
Company’s financial position.
14. Takeovers
North Energy’s Articles of Association contain no
restrictions on or defense mechanisms against
the acquisition of the Company’s shares. In
accordance with its general responsibility for the
management of North Energy, the Board will act
in the best interests of all the Company’s share-
holders in such an event. Unless special grounds
exist, the Board will not seek to prevent takeover
offers for the Company’s business or shares.
Should an offer be made for the shares of North
Energy, the Board will issue a statement with its
recommendation as to whether shareholders
should accept it.
all stakeholders shall receive the same infor-
mation at the same time, and all financial and
commercial information is made available on
the Company’s website simultaneously. Stock ex-
change announcements are distributed through
www.newsweb.no and made available on the
Company’s website.
The annual financial statements for North En-
ergy are made available on its website at least
three weeks before the General Meeting. Interim
reports are published within two months after
the end of each quarter. North Energy publishes
an annual financial calendar which is available
on the Oslo Stock Exchange website and on
www.northenergy.no. The Board emphasizes
openness and equal treatment in relation to all
relevant parties in the market and strives always
Oslo, 24th of March 2022
Anders Onarheim Elin Karfjell Jogeir Romestrand
Chair Director Director
Rachid Bendriss Didrik Leikvang
co-CEO co-CEO
Financial
Statements
& Notes
Financial Statements & Notes – North Energy | 25
Financial Statements
Income statement
(NOK 1 000) Note 2021 2020
Sales 178 112
Payroll and related expenses 5 (9 165) (4 207)
Depreciation and amortisation 11, 16 (1 096) (1 466)
Other operating expenses 6 (18 351) (12 223)
Change in fair value of financial investments 21, 2 (45 152) 126 883
Net result from investments in associates 19 26 862 26 391
Operating profit/(loss) (46 724) 135 490
Financial income 17 593 2 931
Financial expenses 17 (80) (210)
Net financial items 512 2 720
Profit/(loss) before income tax (46 212) 138 210
Income tax 15 18 383 (17 783)
Profit/(loss) for the year (27 829) 120 427
Attributable to:
Owners of North Energy ASA (27 829) 122 048
Non-controlling interests 0 (1 621)
(27 829) 120 427
Earnings per share (NOK per share)
- Basic 13 (0,24) 1,04
- Diluted 13 (0,24) 1,04
26 | Financial Statements & Notes – North Energy
Statement of comprehensive income
(NOK 1 000) Note 2021 2020
Profit/(loss) for the year (27 829) 120 427
Other comprehensive income, net of tax:
Total other comprehensive income, net of tax 0 0
Total comprehensive income/(loss) for the year (27 829) 120 427
Attributable to:
Owners of North Energy ASA (27 829) 122 048
Non-controlling interests 0 (1 621)
(27 829) 120 427
Financial Statements & Notes – North Energy | 27
Statement of financial position
ASSETS
(NOK 1 000) Note 31.12.21 31.12.20
ASSETS
Non-current assets
Property, plant and equipment 16 148 131
Right-of-use assets 11 3 103 1 374
Investments in associates 19 141 312 111 369
Other receivables 7 120 258
TOTAL NON-CURRENT ASSETS 144 683 113 132
Current assets
Trade and other receivables 8 195 181
Financial investments at fair value through profit and loss 21 154 129 191 422
Cash and cash equivalents 9 39 986 119 332
TOTAL CURRENT ASSETS 194 311 310 935
TOTAL ASSETS 338 993 424 067
28 | Financial Statements & Notes – North Energy
Statement of financial position
EQUITY AND LIABILITIES
(NOK 1 000) Note 31.12.21 31.12.20
EQUITY
Share capital 10 119 047 119 047
Treasury shares 10 (3 411) (3 411)
Share premium 850 378 903 141
Other paid-in capital 30 691 30 691
Retained earnings (675 404) (647 575)
Total equity 321 301 401 893
LIABILITIES
Non-current liabilities
Deferred tax liability 15 0 18 383
Leasing liabilities 11 2 531 304
Other non-current liabilities 12 2 513 0
Total non-current liabilities 5 044 18 687
Current liabilities
Leasing liabilities, current 11 642 1 163
Trade creditors 30 30
Tax payable 15 0 0
Other current liabilities 12 11 977 2 296
Total current liabilities 12 649 3 488
Total liabilities 17 693 22 175
Total equity and liabilities 338 993 424 067
Oslo, 24th of March 2022
Anders Onarheim Elin Karfjell Jogeir Romestrand
Chair Director Director
Rachid Bendriss Didrik Leikvang
co-CEO co-CEO
Financial Statements & Notes – North Energy | 29
Statement of changes in equity
Other Non-
Share Treasury Share paid-in Retained controlling Total
(NOK 1 000) capital shares premium capital earnings interests equity
Equity at 1 January 2020 119 047 (3 411) 903 141 30 691 (732 070) (14 653) 302 746
Paid dividend from subsidiary to non-controlling interests * (21 280) (21 280)
Change in non-controlling interests * (37 553) 37 553 0
Total compehensive income for 2020 122 048 (1 621) 120 427
Equity at 31 December 2020 119 047 (3 411) 903 141 30 691 (647 575) (0) 401 893
Total comprehensive income for 01.01.21-31.12.21 (27 829) (27 829)
Paid dividend (52 763) (52 763)
Equity at 31 December 2021 119 047 (3 411) 850 378 30 691 (675 404) 0 321 301
* On 8 April 2020 the General Meeting in North Energy Capital AS, a company owned 80% by North Energy ASA, approved a proposal for distribution of dividend of NOK 106.4 million, representing the total available
equity in the company. Subsequent to the dividend distribution, an agreement was signed where North Energy ASA acquired the remaining 20% interest in North Energy Capital AS. From this date North Energy
Capital AS was owned 100% by North Energy ASA. In August 2020 North Energy Capital AS was merged with North Energy ASA.
30 | Financial Statements & Notes – North Energy
Cash flows statement
(NOK 1 000) Note 2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax (46 212) 138 210
Adjustments:
Depreciation 11,16 1 096 1 466
Pensions 138 92
Change in fair value of financial investments 21 45 152 (126 883)
Net result from investments in associates 19 (26 862) (26 391)
Changes in trade creditors 0 (18)
Changes in other accruals 12 11 087 (3 277)
NET CASH FLOWS FROM OPERATING ACTIVITIES (15 600) (16 800)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment 16 (42) 0
Investment in associates 19 (10 000) (5 045)
Dividends from associates 19 6 919 800
Purchase of financial investments 18 (13 385) (25 285)
Proceeds from sales of financial investments 18 5 526 158 930
NET CASH FLOWS FROM INVESTING ACTIVITIES (10 982) 129 399
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid 10 (52 763) 0
Dividends paid from subsidiary to non-controlling interests 0 (21 280)
Net cash flows from financing activities (52 763) (21 280)
NET CHANGE IN CASH AND CASH EQUIVALENTS (79 345) 91 319
Cash and cash equivivalents at 1 January 9 119 332 28 013
CASH AND CASH EQUIVIVALENTS AT 31 DECEMBER 9 39 986 119 332
Financial Statements & Notes – North Energy | 31
32 | Financial Statements & Notes – North Energy
NOTE 1 General information
The financial statements of North Energy were approved by the Board of
Directors and CEO on March 24, 2022.
North Energy ASA is a public limited company incorporated and domiciled
in Norway, with its main office located in Oslo. The company’s shares were
listed on former Oslo Axess (now Euronext Expand), an exchange regulated
by the Euronext Oslo Stock Exchange, on February 5, 2010. The company’s
ticker is NORTH.
After completion of the intra-group merger between North Energy ASA
and North Energy Capital AS in August 2020, North Energy ASA is the only
remaining Company in the former Group. Comparison figures presented
in the income statement for 2020 is the consolidated figures for the Group
up until the merger, in addition to the figures for North Energy ASA for the
period after the merger.
NOTE 2 Summary of significant accounting policies
The principal accounting policies applied in the preparation of these
financial statements are laid out below. Unless otherwise stated, these
policies have consistently been applied to all periods presented.
2.1 Basis for preparation
The consolidated financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS) as adopted by the
European Union (EU), and in accordance with the additional requirements
pursuant to the Norwegian Accounting Act.
The financial statements have been prepared on a historical cost basis.
2.2 Investment in associates
Associates are all entities over which the Company has significant influence
but not control or joint control. This is generally the case where the
Company holds between 20% and 50% of the voting rights. Investments in
associates are accounted for using the equity method of accounting, after
initially being recognised at cost.
Under the equity method of accounting, the investments are initially
recognised at cost and adjusted thereafter to recognise the Company’s
share of the post-acquisition profits or losses of the investee in profit or loss,
and the Company’s share of movements in other comprehensive income
of the investee in other comprehensive income. Dividends received or
receivable from associates are recognised as a reduction in the carrying
amount of the investment.
The carrying amount of equity-accounted investments is tested for
impairment whenever events or changes in circumstances indicate that
the carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the investment’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of
the investment’s fair value less costs of disposal and value in use.
2.3 Foreign currency
Functional currency and presentation currency
The Company’s presentation currency is Norwegian kroner (NOK).
Transactions in foreign currency
Foreign currency transactions are translated into NOK using the exchange
rates on the transaction date. Monetary balances in foreign currencies are
translated into NOK at the exchange rates on the date of the balance sheet.
Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation of monetary assets and liabilities
denominated in foreign currencies are recognised in the income statement.
Financial Statements & Notes – North Energy | 33
2.4 Property, plant and equipment
Property, plant and equipment are stated at historical cost, less accumulated
depreciation and any impairment charges. Depreciation is calculated on a
straight-line basis over the asset’s expected useful life and adjusted for any
impairment charges. Expected useful lives of long-lived assets are reviewed
annually, and where they differ from previous estimates, depreciation
periods are changed accordingly. Ordinary repairs and maintenance costs
are charged to the income statement during the financial period in which
they are incurred. The costs of major renovations are included in the
asset’s carrying amount when it is probable that the company will derive
future economic benefits. Gains and losses on disposals are determined
by comparing the disposal proceeds with the carrying amount and are
included in operating profit. Major assets with different expected useful lives
are reported as separate components. Each component is depreciated on a
straight-line basis over its expected useful life.
Property, plant and equipment are reviewed for potential impairment
whenever events or changes in circumstances indicate that the carrying
amount of an asset exceeds its recoverable amount. The recoverable
amount is the higher of the asset’s fair value less costs required to sell the
asset and its value in use. The value in use is determined by reference to
discounted future net cash flows expected to be generated by the asset. The
difference between the asset’s carrying amount and its recoverable amount
is recognised in the income statement as impairment. Property, plant and
equipment that suffered impairment are reviewed for possible reversal of the
impairment at each reporting date.
2.5 Leases (as lessee)
The Company adopted IFRS 16 – Leases from 1 January 2019. IFRS 16
defines a lease as a contract that conveys the right to control the use of an
identified asset for a period of time in exchange for consideration. For each
contract that meets this definition, IFRS 16 requires lessees to recognize
a right-of-use asset and a lease liability in the balance sheet with certain
exemptions for short term and low value leases. Lease payments are to be
reflected as interest expense and a reduction of lease liabilities, while the
right-of-use assets are to be depreciated over the shorter of the lease term
and the assets’ useful life. Lease liabilities are measured at the present value
of remaining lease payments, discounted using the Company’s calculated
borrowing rate.
2.6 Financial assets
The Company’s financial assets are listed and non-listed equity instruments,
receivables and cash and cash equivalents. The classification of financial
assets at initial recognition depends on the financial asset’s contractual cash
flow characteristics and the Group’s business model for managing them.
The Company classified its financial assets in four categories:
• Financial assets at amortized cost
• Financial assets at fair value through OCI with recycling of cumulative
gains and losses
• Financial assets designated at fair value through OCI with no recycling of
cumulative gains and losses upon derecognition
• Financial assets at fair value through profit and loss
Financial assets at amortized cost
The Company measures financial assets at amortized cost if both of the
following conditions are met:
• The financial asset is held within a business model with the objective to
hold financial assets in order to collect contractual cash flows and,
• The contractual terms of the financial asset give rise on specified dates
to cash flows that are solely payments of principal and interest on the
principal amount outstanding
Financial assets at amortized cost are subsequently measured using the
effective interest (EIR) method and are subject to impairment. Gains and
34 | Financial Statements & Notes – North Energy
losses are recognized in profit or loss when the asset is derecognized,
modified or impaired. The Groups financial assets at amortized cost
includes trade receivables and other short-term deposits.
Receivables are initially recognised at fair value less impairment losses.
Financial assets at fair value through profit and loss
Financial assets at fair value through profit or loss include financial assets
held for trading, financial assets designated upon initial recognition at fair
value through profit or loss, or financial assets mandatorily required to be
measured at fair value. Financial assets are classified as held for trading if
they are acquired for the purpose of selling or repurchasing in the near
term. Derivatives, including separated embedded derivatives, are also
classified as held for trading unless they are designated as effective hedging
instruments. Financial assets at fair value through profit or loss are carried
in the statement of financial position at fair value with net changes in fair
value recognized in the statement of profit or loss.
2.7 Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits with banks and
other short-term highly liquid investments with original maturities of three
months or less.
2.8 Borrowings
All loans and borrowings are initially recognised at cost, being the fair value
of the consideration received net of transaction/issue costs associated
with the borrowing. After initial recognition, interests-bearing loans and
borrowings are subsequently measured at amortised cost using the effective
interest method. Any difference between the consideration received net of
transaction/issue costs associated with the borrowing and the redemption
value, is recognised in the income statement over the term of the loan.
2.9 Taxes
Income taxes for the period comprises tax payable and changes in deferred
tax.
Tax is recognised in the income statement, except to the extent that it
relates to items recognised in other comprehensive income or directly
in equity. In this case the tax is also recognised in other comprehensive
income or directly in equity.
Deferred tax assets and liabilities are calculated based on existing
temporary differences between the carrying amounts of assets and
liabilities in the financial statements and their tax bases, together with tax
losses carried forward at the balance sheet date. Deferred tax assets and
liabilities are calculated based on the tax rates and tax legislation that are
expected to exist when the assets are realised or the liabilities are settled,
based on the tax rates and tax legislation that have been enacted or
substantially enacted on the balance sheet date. Deferred tax assets are
recognised only to the extent that it is probable that future taxable profits
will be available against which the assets can be utilised. The carrying
amount of deferred tax assets is reviewed at each balance sheet date
and reduced to the extent that is no longer probable that the deferred tax
asset can be utilised. Deferred tax assets and liabilities are not discounted.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets against current tax liabilities
and when the deferred taxes assets and liabilities relate to income taxes
levied by the same taxation authority on the same taxable entity.
2.10 Defined contribution pension plans
The Company’s payments under defined contribution pension plans are
recognised in the income statement as employee benefits expense for the
year to which the contribution applies.
Financial Statements & Notes – North Energy | 35
2.11 Provisions
A provision is recognised when the company has a present legal or
constructive obligation resulting from past events, it is probable (i.e. more
likely than not) that an outflow of resources will be required to settle the
obligation, and the amount has been reliably estimated. Provisions are
reviewed at each balance sheet date and adjusted to reflect the current
best estimate. Provisions are measured at the present value of the
expenditures expected to be required to settle the obligation. The increase
in the provision owing to passage of time is recognised as a financial cost.
The Company recognises a provision and an expense for severance
payments when there exists a legal obligation to make severance
payments.
The Company recognises a provision and an expense for bonuses to
employees, when the company is contractually obliged or where there is a
past practice that has created a constructive obligation.
2.12 Trade creditors
Trade creditors are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method.
2.13 Financial investments
Financial investments are measured at fair value. Changes in fair value
are recognized in profit and loss under operating items. The Board and
management of the Company is following up all investments at fair value
according to the business model of the Company.
2.14 Revenue recognition
Revenues from sales of services are recorded over time when the service
are performed.
2.15 Contingent liabilities
Contingent liabilities are not recognised in the financial statements unless an
outflow of resources embodying economic benefit has become probable.
Significant contingent liabilities are disclosed, except for contingent liabilities
where the probability of the liability occurring is remote.
2.16 Earnings per share
The calculation of basic earnings per share is based on the profit
attributable to owners of the Company using the weighted average number
of ordinary shares outstanding during the year after deduction of the
average number of treasury shares held over the period.
The calculation of diluted earnings per share is consistent with the
calculation of the basic earnings per share, but gives at the same time effect
to all dilutive potential ordinary shares that were outstanding during the
period, by adjusting the profit/loss and the weighted average number of
shares outstanding for the effects of all dilutive potential shares, i.e.:
• The profit/loss for the period is adjusted for changes in profit/loss that
would result from the conversion of the dilutive potential ordinary shares.
• The weighted average number of ordinary shares is increased by the
weighted average number of additional ordinary shares that would
have been outstanding assuming the conversion of all dilutive potential
ordinary shares.
2.17 Segment reporting
The Company reports only one business segment which includes the
investment activities. Based on this, no segment note is presented, and this
is in accordance with management’s reporting.
2.18 Cost of equity transactions
Transaction costs directly linked to an equity transaction are recognised
directly in equity, net after deducting tax.
36 | Financial Statements & Notes – North Energy
2.19 Treasury shares
Own equity instruments which are reacquired (treasury shares) are
recognised at cost and deducted from equity. No gain or loss is recognised
in the income statement on the purchase, sale, issue or cancellation of the
Company’s own equity instruments. Any difference between the carrying
amount and the consideration is recognised in equity.
2.20 Cash Flows Statement
The cash flow statement is prepared by using the indirect method.
2.21 Events after the balance sheet date
The financial statements are adjusted to reflect events after the balance
sheet date that provide evidence of conditions that existed at the balance
sheet date (adjusting events). The financial statements are not adjusted to
reflect events after the balance sheet date that are indicative of conditions
that arose after the balance sheet date (non-adjusting events). Non-
adjusting events are disclosed if significant.
2.22 Changes in accounting policies and disclosures
(a) New and amended standards and interpretations adopted by the
Company
New standards, amendments and interpretations to existing standards
effective from 1 January 2021 did not have any significant impact on the
financial statements.
(b) New and amended standards and interpretations issued but not
adopted by the Company
A number of new standards or amendments to standards and
interpretations are effective for annual periods beginning on or after 1
January 2022 and have not been applied in preparing these consolidated
financial statements. None of these new standards and amendments to
standards and interpretations are expected to have any significant impact
on the Company’s financial statements.
NOTE 3 Financial risk management
3.1 Financial risks
The Company is exposed to a variety of risks, including market risk, credit
risk, interest rate risk, liquidity risk and currency risk.
This note presents information about the Company’s exposure to each
of the aforementioned risks, and the Company’s objectives, policies and
processes for managing such risks. The note also presents the Company’s
objectives, policies and processes for managing capital.
(a) Market risk
North Energy is exposed to market risk involving the risk of changing
conditions in the specific marketplace in which the Company makes
investments. Sources of market risk include changes in market sentiment
as well as recessions, political turmoil, changes in interest rates, natural
disasters, and terrorist attacks. During 2021, the Covid-19 pandemic has
continued to spread throughout the world. Many countries, including
Norway, has been “closed down” and in others the business and social
activities have been reduced significantly. Towards the end of the year
many countries have lifted their restrictions and trades are back to a level
comparable to before the pandemic outbreak.
(b) Credit risk
The Company is mainly exposed to credit risk related to bank deposits.
The exposure to credit risk is monitored on an ongoing basis. As all
counterparties have a high credit rating, there are no expectations that any
of the counterparties will not be able to fulfil their liabilities. The maximum
exposure to credit risk is represented by the carrying amount of each
financial asset in the balance sheet.
Financial Statements & Notes – North Energy | 37
(c) Interest rate risk
At 31 December 2021 as well as 2020 the Company has no interest-bearing
borrowings with floating interest rate conditions and is consequently not
exposed to interest rate risk.
(d) Liquidity risk
The Company’s liquidity risk is the risk that it will not be able to pay its
financial liabilities as they fall due. The Company’s approach to managing
liquidity risk is to ensure that it will always have sufficient liquidity to meet
its financial liabilities as they fall due, under normal as well as extraordinary
circumstances, without incurring unacceptable losses or risking damage
to the Company’s reputation. Sufficient liquidity will be held in regular bank
accounts at all times to cover expected payments relating to operational
activities and investment activities.
The Company’s financial liabilities are short-term and fall due within 12
months.
(e) Currency risk
The company’s functional currency is the NOK, and the Company is
exposed to foreign exchange rate risk related to the value of NOK relative
to other currencies. The Company is exposed to currency risk related to
its activities mainly because parts of the Company’s investments are USD,
CAD, and GBP-based. The Company has not entered into any agreements
to reduce its exposure to foreign currencies.
3.2 Capital management
The Company’s aim for management of capital structure is to secure the
business in order to yield profit to shareholders and contributions to other
stakeholders. In addition, a capital structure at its optimum will reduce the
costs of capital. To maintain or change the capital structure in the future,
the Company can pay dividends to its shareholders, issue new shares or
sell assets to reduce debt. The Company may buy its own shares. The point
of time for this is dependent on changes in market prices.
The Company monitors its capital structure using an equity ratio, which is
total equity divided by total assets. As of December 31, 2021, the equity ratio
was 94.8% which is at the same level as last year.
The company will handle any increased future capital requirements by
selling assets, raising new capital, taking up loans, establishing strategic
alliances or any combination of these, and by adjusting the company’s
activity level if necessary.
NOTE 4 Critical accounting estimates and judgements
4.1 Critical accounting estimates and assumptions
The preparation of the financial statements in accordance with IFRS
requires management to make judgements and use estimates and
assumptions that affect the reported amounts of assets and liabilities,
income, and expenses.
The estimates and associated assumptions are based on historical
experience and various other factors that are considered to be reasonable
under the circumstances. The estimates and underlying assumptions are
reviewed on an ongoing basis.
Currently, the Company’s most important accounting estimates are related
to the following items:
a) Other current liabilities
See note 21 for information about possible implications in connection with
a control by the tax Administration of North Energy ASA’s accounts for the
years 2016 up to and including 2019.
38 | Financial Statements & Notes – North Energy
NOTE 5 Payroll and related expenses, remuneration of directors and
management
Amounts in NOK 1 000 2021 2020
Salaries 3 293 3 473
Payroll tax 626 561
Pension costs 161 161
Other benefits 5 085 12
Total 9 165 4 207
Average number of employees 2,0 2,3
Pensions
The company has a defined contribution pension plan. The pension ar-
rangements fulfil the requirements of the Norwegian Act on mandatory
occupational pensions.
Remuneration to directors and management in 2021:
The board of directors shall prepare a declaration in accordance with the
Norwegian Public Limited Liability Companies Act (Allmennaksjeloven)
§6-16a.
The information in accordance with the Norwegian Accounting Act §7-31b
are available in a separate report that is published on
www. northenergy.no
Amounts in NOK 1 000
Directors'
fees Salaries Pension Other *
Management **
Knut Sæberg (CEO) 2 186 79 4 432
Board of directors
Anders Onarheim (chair) 500
Elin Karfjell (director) 250
Jogeir Romestrand (director) 250
Total 1000 2 186 79 4432
* Other includes provision for severance payment, allowances to cover telephone and internet,
group life insurance and travel insurance.
** Figures for remuneration to management are exclusive payroll tax.
Remuneration to CEO:
The company’s former CEO had an agreement with an annual salary of
NOK 2,0 million in 2021. Other benefits included regular allowances to cover
telephone, internet, pension, group life insurance and travel insurance. In
addition, he was included in the general employee bonus programme as
determined by the board of directors. The bonus was limited to 4 months
of salary. The bonus was linked to the achievement of specified parame-
ters. Both financial and non-financial parameters are used. In the event of
resignation at the request of the board of directors, the CEO had a right to
a severance payment equivalent to two years of gross fixed salary. If the
CEO resigns, there is no severance payment. In december the former CEO
signed an agreement with the board regarding resignation by the end of
the year, hence the company made a provision of NOK 5.0 million (includ-
ing social securities taxes) for a severance payment to the CEO.
Financial Statements & Notes – North Energy | 39
NOTE 5 Payroll and related cost, remuneration to board of directors and
management (continued)
Remuneration to directors and management in 2020:
Amounts in NOK 1 000
Directors'
fees Salaries Pension Other *
Management **
Knut Sæberg (CEO) 2 053 78 22
Board of directors
Anders Onarheim (chair) 225
Elin Karfjell (director) 225
Jogeir Romestrand (director) 225
Total 675 2 053 78 22
* Other includes allowances to cover telephone and internet, group life insurance and travel
insurance.
** Figures for remuneration to management are exclusive payroll tax.
NOTE 6 Other operating expenses and remuneration to auditor
Other operating expenses consist of:
Amounts in NOK 1 000 2021 2020
Travelling expenses 12 103
Consultant and other fees 10 335 11 451
Other administrative expenses 8 004 669
Total 18 351 12 223
Remuneration to auditor is allocated as specified below:
Amounts in NOK 1 000 2021 2020
Audit 313 556
Attestations 0 0
Other assistance 270 257
Total, incl. VAT 583 813
NOTE 7 Other non-current receivables
Other non-current receivables consist of:
Amounts in NOK 1 000 2021 2020
Premium fund pensions (prepaid premium) 120 258
Total 120 258
40 | Financial Statements & Notes – North Energy
NOTE 8 Trade and other receivables
Trade and other receivables consist of:
Amounts in NOK 1 000 2021 2020
Prepaid expenses 63 49
Premium fund pensions (prepaid premium) 132 132
Total 195 181
NOTE 9 Cash and cash equivalents
Cash and cash equivalents:
Amounts in NOK 1 000 2021 2020
Bank deposits 39 986 119 332
Total cash and cash equivalents 39 986 119 332
Of this:
Restricted cash for witheld taxes from employees salaries 185 181
NOTE 10 Share capital and shareholder information
2021 2020
Number of issued shares at 1 January 119 047 065 119 047 065
New shares issued during the year:
Issued in exchange for cash 0 0
Number of issued shares at 31 December * 119 047 065 119 047 065
Nominal value NOK per share at 31 December 1,00 1,00
Share capital NOK at 31 December 119 047 065 119 047 065
* Inclusive 1,795,472 treasury shares.
North Energy ASA has one share class with equal rights for all shares.
Financial Statements & Notes – North Energy | 41
Main shareholders as of 31 December 2021:
Shareholder
Number of
shares % share
AB INVESTMENT AS 21 953 776 18,4%
CELISA CAPITAL AS 10 888 145 9,1%
ISFJORDEN AS 8 465 651 7,1%
INTERTRADE SHIPPING AS 3 500 000 2,9%
TRIOMAR AS 3 100 000 2,6%
CORUNA AS 3 000 000 2,5%
JPB AS 2 946 875 2,5%
SALTEN KRAFTSAMBAND AS 2 419 215 2,0%
ARNT HAGEN HOLDING AS 2 373 972 2,0%
BAKKANE ARVID 2 070 547 1,7%
BOYE HANS JØRGEN 1 797 828 1,5%
NORTH ENERGY ASA 1 795 472 1,5%
TAJ HOLDING AS 1 692 030 1,4%
Avanza Bank AB 1 570 226 1,3%
ROME AS 1 440 000 1,2%
ORIGO KAPITAL AS 1 343 569 1,1%
CLEARSTREAM BANKING S.A. 1 336 163 1,1%
HEDEN HOLDING AS 1 035 000 0,9%
SÆBERG KNUT 1 002 352 0,8%
Swedbank AB 997 556 0,8%
Total 20 largest shareholders 74 728 377 62,8%
Other shareholders 44 318 688 37,2%
Total 119 047 065 100,0%
Number of shares owned by management and directors at 31 December 2021:
Management
Knut Sæberg (CEO up to 31.12.2021) 1 002 352 0,8%
Didrik Leikvang (Advisor up to 31.12.2021)
through Isfjorden AS
8 750 651 7,4%
Rachid Bendriss (Advisor up to 31.12.2021),
through Celisa Capital AS
10 888 145 9,1%
Board of Directors
Anders Onarheim (chairman), through AB Investment AS,
Spitsbergen AS and Liju Invest AS 23 428 465 19,7%
Jogeir Romestrand (director), through Rome AS 1 440 000 1,2%
Elin Karfjell (director), through Elika AS 407 700 0,3%
Total 45 917 313 38,6%
Number of shares owned by management and directors at 31 December 2020:
Management
Knut Sæberg (CEO) 1 002 352 0,8%
Didrik Leikvang (Advisor) through Isfjorden AS 8 465 651 7,1%
Rachid Bendriss (Advisor), through Celisa Capital AS 10 603 145 8,9%
Board of Directors
Anders Onarheim (chairman), through AB Investment AS,
Spitsbergen AS and Liju Invest AS 23 228 465 19,5%
Jogeir Romestrand (director), through Rome AS 1 300 000 1,1%
Elin Karfjell (director), through Elika AS 267 700 0,2%
Total 44 867 313 37,7%
42 | Financial Statements & Notes – North Energy
NOTE 11 Leases
Right-of-use assets:
The Company leases office facilities. The Company’s right-of-use assets are
categorised and presented in the table below:
Amounts in NOK 1 000
Right-of-use assets Office facilities
2021
Acquisition cost at 1 January 2021 4 638
Addition of right-of-use assets 3 046
Disposals of right-of-use assets (246)
Acquisition cost 31 December 2021 7 438
Accumulated depreciation and impairment 1 January 2021 (3 264)
Depreciation (1 071)
Impairment 0
Accumulated depreciation and impairment 31 December 2021 (4 335)
Carrying amount of right-of-use assets 31 December 2021 3 103
2020
Acquisition cost at 1 January 2020 5 420
Addition of right-of-use assets 0
Disposals of right-of-use assets (782)
Acquisition cost 31 December 2020 4 638
Accumulated depreciation and impairment 1 January 2020 (1 668)
Depreciation (1 597)
Impairment 0
Accumulated depreciation and impairment 31 December 2020 (3 264)
Carrying amount of right-of-use assets 31 December 2020 1 374
Lower of remaining lease term or economic life 5.25 years
Depreciation method Linear
Leasing liabilities: 2021 2020
Lease liabilities at 1 January 1 466 3 873
Additions new lease contracts 3 046 0
Disposals lease contracts (296) (782)
Accretion lease liabilities 78 (135)
Payments of lease liabilities (1 122) (1 490)
Total leasing liabilities 31 December 3 173 1 466
Break down of lease debt:
Short-term 642 1 163
Long-term 2 531 304
Total lease debt 3 173 1 466
Maturity of future undiscounted lease payments under non-cancellable lease
agreements:
2021 2020
Within 1 year 874 1 221
1 to 5 years 2 640 313
After 5 years 330 -
Total 3 844 1 534
The leases do not impose any restrictions on the Company’s dividend policy or
financing opportunities.
Financial Statements & Notes – North Energy | 43
NOTE 12 Other current and non-current liabilities
Other Current liabilities
Amounts in NOK 1 000 2021 2020
Public duties payable 368 306
Holiday pay 361 349
VAT payable (46) 15
Other accruals for incurred costs 11 294 1 625
Total 11 977 2 296
Other non-current liabilities
Amounts in NOK 1 000 2021 2020
Severance payment liability 2 513 0
Total 2 513 0
On 6 May 2020 North Energy received a notice from the Norwegian Tax
Administration informing that they are starting a control of North Energy ASA’s
accounts for the years 2016 up to and including 2019. On 13 December 2021
the company received the report from the control together with a notification
of changes of VAT from the control period. The company has submitted a
response to the notification. To cover for a possible settlement of the claim a
provision of NOK 7.5 million, as other operating expenses, has been made in
2021. The provision is included in Other current liabilities.
In December, the Board of North Energy announced that Mr. Knut Sæberg
would retire from his position as CEO on 31 December 2021. The Company has
made a provision of NOK 5.0 million (including employement tax) to cover for
a severance payment to the former CEO. NOK 2.5 million of the provision is
classified as current liabilites and NOK 2.5 million as non-current liabilities.
NOTE 13 Earnings per share
Amounts in NOK 1 000 2021 2020
Profit/(loss) for the year attributable to owners of
North Energy ASA (NOK 1 000)
(27 829) 122 048
Weighted average number of shares outstanding
including treasury shares
119 047 065 119 047 065
Weighted average number of treasury shares
outstanding
(1 795 472) (1 795 472)
Weighted average number of shares outstanding
excluding treasury shares
117 251 593 117 251 593
Earnings per share (NOK per share)
- Basic (0,24) 1,04
- Diluted (0,24) 1,04
44 | Financial Statements & Notes – North Energy
NOTE 14 Related parties and non-controlling interests
The Company’s transactions with related parties:
Amounts in NOK 1 000
(a) Purchases of services
Purchase of services from Description of services 2021 2020
North Advisors AS Consultancy services 3 705
Celisa Capital AS Consultancy services 3 750 1 875
Isfjorden AS Consultancy services 3 750 1 875
On 1st of July 2020, North Energy ASA entered into advisory agreements
with Isfjorden AS (owned by Didrik Leikvang) and Celisa Capital AS (owned
by Rachid Bendriss) in replacement of the previous agreement with North
Advisors AS to provide strategic and financial advisory services to North
Energy ASA. The agreements were terminated by the end of 2021. Starting
from 1st of January 2022, the advisors Didrik Leikvang and Rachid Bendriss
have been appointed as co-CEOs in the Company.
(b) Remuneration to management and directors
Refer to note 5.
(c) Overview of subsidiaries and non-controlling interests in subsidiaries
In August 2020 North Energy Capital AS was merged with North Energy
ASA. After completion of this intra-group merger between North Energy
ASA and North Energy Capital AS, North Energy ASA is the only remaining
Company in the former Group.
NOTE 15 Tax
Specification of income tax:
Amounts in NOK 1 000 2021 2020
Tax payable 0 0
Change deferred tax 18 383 (17 783)
Total income tax credit 18 383 (17 783)
Specification of temporary differences, tax losses carried forward and deferred tax
Amounts in NOK 1 000 2021 2020
Property, plant and equipment and Right-of-use assets 2 939 1 116
Pensions 252 390
Leasing liabilities (3 173) (1 466)
Financial investments 104 448 151 220
Provisions (7 500) 0
Tax losses carried forward, onshore (99 029) (67 701)
Total basis for deferred tax (2 063) 83 559
Deferred tax asset/liability before valuation allowance 454 (18 383)
Uncapitalised deferred tax asset (valuation allowance) (454) 0
Deferred tax asset/(liability) 0 (18 383)
The financial investments in Touchstone Exploration as well as certain
bonds are treated outside of the exemption method used by the
Norwegion Tax Administration and hence subject to tax. Touchstone
Exploration has headquarters in Canada with operations in Trinidad.
The change in deferred tax is mainly due to a reduction in the unrealised
gain on financial investments outside the exemption method and an
increase in the tax losses carried forward due the current year loss.
Financial Statements & Notes – North Energy | 45
Reconciliation of effective tax rate:
Amounts in NOK 1 000 2021 2020
Profit/(loss) before income tax (46 212) 138 210
Expected income tax 22% 10 167 (30 406)
Adjusted for tax effects (22%) of the following items:
Permanent differences 6 170 4 586
Adjustments previous years 2 500 (2 500)
Changed tax rates 0 0
Change in valuation allowance for deferred tax assets (454) 10 537
Total income tax credit 18 383 (17 783)
NOTE 16 Property, plant and equipment
Amounts in NOK 1 000
Equipment, office
machines, etc
2021
Cost:
At 1.1.2021 434
Additions 42
Disposals 0
At 31.12.2021 476
Depreciation and impairment:
At 1.1.2021 (303)
Depreciation this year (25)
Impairment this year 0
Disposals 0
At 31.12.2021 (328)
Carrying amount at 31.12.2021 148
2020
Cost:
At 1.1.2020 434
Additions 0
Disposals 0
At 31.12.2020 434
Depreciation and impairment:
At 1.1.2020 (223)
Depreciation this year (80)
Impairment this year 0
Disposals 0
At 31.12.2020 (303)
Carrying amount at 31.12.2020 131
Economic life 3-10 years
Depreciation method linear
46 | Financial Statements & Notes – North Energy
NOTE 17 Finance income and costs
Finance income:
Amounts in NOK 1 000 2021 2020
Interest income bank deposits 13 119
Interest income on bonds 572 2 437
Foreign exchange gain 7 130
Other finance income 0 244
Total finance income 593 2 931
Finance costs:
Amounts in NOK 1 000 2021 2020
Other interest expenses 0 9
Foreign exchange loss 2 65
Other finance costs 78 137
Total finance costs 80 210
NOTE 18 Financial instruments
(a) Categories of financial instruments
at 31 December 2021:
Amounts in NOK 1 000
Financial assets
measured at
amortised cost
Financial assets
at fair value through
profit and loss
Assets:
Financial investments, current 154 129
Other current receivables (see note 8) 0
Cash and cash equivalents 39 986
Total 39 986 154 129
Amounts in NOK 1 000
Financial liabilities
measured at
amortised cost
Financial liabilities
at fair value
through profit or loss
Liabilities:
Trade creditors 30
Total 30 0
at 31 December 2020:
Amounts in NOK 1 000
Financial assets
measured at
amortised cost
Financial assets at
fair value through
profit and loss
Assets:
Financial investments, current 191 422
Other current receivables (see note 8) 0
Cash and cash equivalents 119 332
Total 119 332 191 422
Amounts in NOK 1 000
Financial liabilities
measured at
amortised cost
Financial liabilities
at fair value through
profit and loss
Liabilities:
Trade creditors 30
Total 30 0
Financial Statements & Notes – North Energy | 47
NOTE 18 Financial instruments (continued)
(b) Fair value of financial instruments
The carrying amount of cash and cash equivalents and other current
receivables is approximately equal to fair value, since these instruments
have a short term to maturity. Similarly, the carrying amount of trade
creditors and other current liabilities is approximately equal to fair value,
since the effect of discounting is not significant, due to short term to
maturity.
Fair value of the stock exchange-listed shares is the stock market price
at the balance sheet date (level 1 in the fair value hierarchy). Fair value of
bonds is based on quoted market prices at the balance sheet date (level 2
in the fair value hierarchy). Fair value of other non-listed investments are
valued using the best information available in the circumstances including
the entities’ own data. (level 3 in the fair value hierarchy).
Specification of financial instruments based on level in the fair value
hierarchy
Fair Value 31.12.2021 Level 1 Level 2 Level 3 Total
Shares 147 956 147 956
Bonds 6 173 6 173
Total fair value 147 956 6 173 0 154 129
There has been no transfer between level 1 and level 2 during 2021.
Reconciliation of level 3 in the fair value hierarchy Level 3
Opening balance 0
Movement during the period 0
Closing balance 0
Fair Value 31.12.2020 Level 1 Level 2 Level 3 Total
Shares 185 572 185 572
Total fair value 5 850 5 850
Total fair value 185 572 5 850 0 191 422
There has been no transfer between level 1 and level 2 during 2020.
(c) Creditworthiness of financial assets
The group does not have a system that separates receivables and loans
by counterparty credit rating. Cash and cash equivalents are receivables
from banks, and Standard & Poor’s credit rating of these banks is presented
below:
2021 2020
Bank deposits: 39 986 119 332
Amounts in NOK 1 000 2021 2020
No external credit rating
A
AA- 39 986 119 332
Total 39 986 119 332
(d) Financial risk factors
See note 3 for financial risk factors and risk management, sensitivity
analysis and capital management.
48 | Financial Statements & Notes – North Energy
NOTE 19 Investment in associates
Reconciliation and specification of carrying amount of investments in
associates:
Amounts in NOK 1 000 2021 2020
Opening balance carrying amount of investments in associates 111 369 80 733
Acquisition cost additional shares acquired, Reach Subsea ASA 0 0
Acquisition cost shares acquired, Wind Catching Systems AS 10 000 5 045
Impairment/reversal of impairment, Reach Subsea ASA 0 12 108
Share of net result in investment, Reach Subsea ASA 30 279 14 068
Share of net result in investment, Wind Catching Systems (3 729) 0
Share of net result in investment, Tyveholmen AS 312 215
Dividend received, Reach Subsea ASA (6 919) 0
Dividend received, Tyveholmen AS 0 (800)
Total carrying amount of investments in associates at balance date 141 312 111 369
Consist of:
Reach Subsea ASA 122 877 99 517
Tyveholmen AS 7 119 6 807
Wind Catching Systems AS 11 316 5 045
Total carrying amount of investments in associates at balance date 141 312 111 369
Specification of net result from investments in associates recognised in the
income statement:
Amounts in NOK 1 000 2021 2020
Impairment/reversal of impairment, Reach Subsea ASA 0 12 108
Share of net result in investment, Reach Subsea ASA 30 279 14 068
Share of net result in investment, Wind Catching Systems (3 729)
Share of net result in investment, Tyveholmen AS 312 215
Net result from investments in associates 26 862 26 391
Ownership interests in associates at 31 December: 2021 2020
Reach Subsea ASA 31,82 % 32,13 %
Tyveholmen AS 50,00 % 50,00 %
Wind Catching Systems AS 30,47 % 25,30 %
Financial figures for the associated company Reach Subsea ASA:
Amounts in NOK 1 000 (100% basis, unaudited) 2021 2020
Revenues 686 601 628 030
EBITDA 318 871 267 207
Pre-tax profit 73 046 43 103
Liquidity 149 035 105 396
Net working capital 57 746 25 079
Net interest bearing debt (118 876) (64 040)
Equity 286 806 210 154
The share price of Reach Subsea at year and was NOK 3.04 per share,
equivalent to a market based value of NOK 439.5 million. North Energy’s
relative share of this was NOK 140.2 million, based on the ownership of
31.82% .
The investment in Reach is accounted for as an associated company, using
the equity method. Thus, North Energy consolidates its share of the net
result from Reach, adjusted for any impairment or reversal of impairment
due to share price fluctuations. The market value of Reach Subsea at year
end 2021 was higher than the book value, hence there was no need for any
impairment.
Financial Statements & Notes – North Energy | 49
Financial figures for the associated company Tyveholmen AS:
Amounts in NOK 1 000 (100% basis, unaudited) 2021 2020
Revenues 5 402 5 127
Operating profit 762 501
Profit after tax 625 430
Liquidity 2 853 2 328
Total assets 13 738 13 195
Equity 13 278 12 477
Financial figures for the associated company Wind Catching Systems AS
Amounts in NOK 1 000 (100% basis, unaudited) 2021 2020
Revenues 0 72
Operating profit (12 260) (1 103)
Profit after tax (12 236) (1 118)
Liquidity 16 634 9 593
Total assets 21 109 9 801
Equity 18 208 8 060
The figures for WCS includes adjustments necessary to transform the figure
from NGAAP to IFRS.
NOTE 20 Contingent liabilities
As of 31 December 2021 the company is not involved in any other legal or
financial disputes. Please see note 12 for information on other current and non-
current liabilities.
NOTE 21 Financial investments, current
Financial investments include:
Amounts in NOK 1 000 2021 2020
Stock exchange-listed shares 147 956 185 572
Bonds 6 173 5 850
Bond funds 0 0
Total carrying amount financial investments, current 154 129 191 422
The main investments at 31 December 2021 consist of shares in Touchstone
Exploration and Chariot Ltd. as well as bonds in Interoil Exploration. The
main investments at 31 December 2020 consisted of shares in Touchstone
Exploration and bonds in Interoil Exploration.
Amounts in NOK 1 000 2021 2020
Change in fair value recognised in income statement under
operating items
(45 152) 126 883
Interest income bonds recognised as finance income 572 2 437
NOTE 22 Covid-19
The Covid-19 pandemic combined with increasing prices for energy like gas
and electricity, has had a significant impact on the economy and the markets
throughout 2021. After facing a significant value-reduction in the beginning of
2020, a recovery of market prices took place in the second half of 2020 and
throughout 2021. The direct impact of Covid-19 on North Energy’s investments
are limited by year end 2021.
NOTE 23 Events after the balance sheet date
There are no subsequent events with significant accounting impacts that have
occurred between the end of the reporting period and the date of this report
that are not already reflected or disclosed in these interim financial statements.
50 | Financial Statements & Notes – North Energy
We declare, to the best of our judgement, that
the annual financial statements for the period
from 1 January to 31 December 2021 have been
prepared in accordance with the applicable
accounting standards, and that the information
in the accounts fairly reflects the Company’s
assets, liabilities, financial position, and results as
a whole.
We also declare that the Directors’ report pro-
vides a true and fair view of the Company’s and
Group’s performance, results, and position, along
with a description of the most important risk and
uncertainty factors facing the Company.
.
Responsibility statement
by the Board of Directors and CEO
Oslo, 24th of March 2022
Anders Onarheim Elin Karfjell Jogeir Romestrand
Chair Director Director
Rachid Bendriss Didrik Leikvang
co-CEO co-CEO
Financial Statements & Notes – North Energy | 51
52 | Financial Statements & Notes – North Energy
In 2021, the North Energy share price provided a
total return, including dividends, of 22.7 per cent.
In comparison, an investment in the Oslo Børs
Benchmark Index over the same period provided
a positive return of 24.8 per cent, while the energy
index yielded a positive return of 50.7 per cent.
During the year, 58.4 million North Energy shares
changed hands on the Oslo Stock Exchange, up
from 47.4 million in 2020, representing a daily
average trading volume of 231,700 shares.
Dividend policy
The Board of Directors have adopted a dividend
policy which states that any payment of dividends
is based on the annual profits generated by the
operating activities of the Company. Subject to
available liquidity and financial position, North
Energy intends to distribute an annual dividend in
an amount equal to 40-60% of net profits.
Table: Top 20 shareholder as of 16 March 2022
Shareholder information
North Energy is listed on the Euronext Expand Oslo marketplace. The Company has one share class, and each share carries one
vote at the general meetings.
Investor Number of shares % of total Type Country
1 AB INVESTMENT AS 21 953 776 18,44 % Ordinary Norway
2 CELISA CAPITAL AS 10 888 145 9,15 % Ordinary Norway
3 ISFJORDEN AS 8 465 651 7,11 % Ordinary Norway
4 INTERTRADE SHIPPING AS 3 550 000 2,98 % Ordinary Norway
5 TRIOMAR AS 3 100 000 2,60 % Ordinary Norway
6 CORUNA AS 3 000 000 2,52 % Ordinary Norway
7 JPB AS 2 946 875 2,48 % Ordinary Norway
8 SALTEN KRAFTSAMBAND AS 2 419 215 2,03 % Ordinary Norway
9 ARNT HAGEN HOLDING AS 2 373 972 1,99 % Ordinary Norway
10 BAKKANE ARVID 2 090 276 1,76 % Ordinary Norway
11 BOYE HANS JØRGEN 1 797 828 1,51 % Ordinary Norway
12 NORTH ENERGY ASA 1 795 472 1,51 % Ordinary Norway
13 TAJ HOLDING AS 1 692 030 1,42 % Ordinary Norway
14 Avanza Bank AB 1 594 912 1,34 % Nominee Sweden
15 ROME AS 1 440 000 1,21 % Ordinary Norway
16 ORIGO KAPITAL AS 1 343 569 1,13 % Ordinary Norway
17 CLEARSTREAM BANKING S.A. 1 316 435 1,11 % Nominee Luxembourg
18 HEDEN HOLDING AS 1 284 211 1,08 % Ordinary Norway
19 PEDERSEN ROLF IVAR 1 007 598 0,85 % Ordinary Norway
20 SÆBERG KNUT 1 002 352 0,84 % Ordinary Norway
Total number owned by top 20 75 062 317 63,05 %
Total number of shares 119 047 065 100,0 %
Financial Statements & Notes – North Energy | 53
Ownership structure
At the end of 2021 North Energy had 2,202 shareholders, up from 1,505
shareholders at the end of 2020. Approximately 6.1 per cent of the
Company’s shares were owned by foreign investors at the end of 2021,
which is up from 4.6 per cent last year.
The Company’s employees, management, Board, and financial advi-
sors held in total 38.6 per cent of the shares in the Company by the
end of the year.
North Energy’s 20 largest shareholders held 62.8 per cent of the
shares as of 31 December 2021.
Share capital
North Energy’s share capital on 31 December 2021 was NOK 119 047
065 divided into 119 047 065 shares, each with a nominal value of NOK
1. The Company holds 1,795,472 treasury shares equivalent to 1.5 per
cent of the Company’s total share capital.
Auditors’
report
Auditors’ report | 55
56 | Auditors’ report
North Energy ASA will present financial statements on the
following dates in 2022:
Q1 2022 interim financial report: 10 May 2022
Half-yearly 2022 interim financial report: 25 August 2022
Q3 2022 interim financial report: 9 November 2022
Time and venue will be communicated at a later stage.
All dates are subject to change.
The annual General Meeting is planned to be held on
9 May 2022
North Energy ASA- Financial Calendar for 2022
North Energy ASA
Address: Tjuvholmen allé 19, 0252 OSLO
E-mail: post@northenergy.no
Phone: +47 22 01 79 50
Legal Org. Number: NO 891 797 702 MVA