Noreco 2020 Report

ANNUAL REPORT 2020
Norwegian Energy
Company ASA
N O R E CO 20 20 AN N UAL R EP O R T 1
ANNUAL REPORT 2020
Contents
PART I
4 About Noreco
5 Highlights
7 Letter from the Executive Chair
8 Overview of Assets
9 Dan
12 Gorm
15 Halfdan
18 Tyra
20 Tyra Redevelopment
PART II
24 Introduction
25 Performance Status
26 Short Term Focus
27 Sustainability Linked KPIs
28 Decommissioning & Recycling of the Tyra Facilities
29 Renewable Power
30 Subsurface CCS and Energy Storage
31 Offshore Hydrogen & PtX Production
32 DHRTC
33 Biodiversity in the DUC
PART III
35 Noreco's Board of Directors
37 Directors' Report
48 Reporting of Payments to Governments
49 Corporate Governance Report 2020
56 Corporate Social Responsibility
59 Statutory Accounts 2020
75 Consolidated Statements
129 Auditor's Report
135 Statement of Compliance
136 Alternative Performance Measures
138 Supplementary Oil and Gas Information (unaudited)
139 Information About Noreco
PART I
About Noreco
4 About Noreco
5 Highlights
7 Letter from the Executive Chair
8 Overview of Assets
9 Dan
12 Gorm
15 Halfdan
18 Tyra
20 Tyra Redevelopment
About Noreco
Norwegian Energy Company ASA (“Noreco” or the “Company”)
is an Oslo Stock Exchange listed oil and gas company trading
under the ticker “NOR”. The Company was established in 2005
and completed the transformational acquisition of Shell’s up-
stream assets in Denmark in 2019.
As a result of this transaction, Noreco lower opex significantly and unlock

established itself as a material inde- gross reserves in excess of 200
pendent E&P company, focused on mmboe. The Company has a focus
the North Sea and the second-larg- on developing and implementing
est oil and gas producer in Denmark. solutions that will improve the long-
The Company holds a 36.8% non-op- term position of oil and gas as a key
erated interest in the Danish Under- part of the global energy mix while
ground Consortium (“DUC”) through reducing greenhouse gas emissions
its fully owned subsidiary Noreco Oil on the Danish Continental Shelf.
Danmark A/S. The DUC is comprised The Company has proven and prob-
of 11 producing fields that collective- able (“2P”) reserves of 201 million bar-
ly form four production hubs: Dan, rels of oil equivalent (“mmboe”) at the
Gorm, Halfdan and Tyra, and is a joint end of 2020 based on an indepen-
venture between Total E&P Denmark dent CPR assessment and contin-
A/S (“Total”) (43.2%) as operator, gent reserves (“2C”) of approximately
Noreco (36.8%) and Nordsøfonden 200 mmboe.
(20.0%).
The DUC is currently redeveloping

the Tyra field, which will extend
production by 25 years. Redeveloped
Tyra is expected to increase Noreco’s
net production by 90 percent, de-
crease field emissions by 30 percent,
2020
Highlights
OPE R ATIONAL
• Solid operational performance: • Proactive COVID-19 measures to

Net production from Halfdan, Dan protect people and ensure busi-
and Gorm of 28.5 mboepd at an ness continuity: The operational
average realized oil price of USD efficiency during the year was
66.8/bbl moderately impacted by COVID-19.
No reported COVID-19 infections
• Stable producing assets: Current among offshore personnel and the
producing hubs with low decline manning successfully returned to
rates provide predictable outlook pre-COVID-19 levels in October
for 2021 with expected production 2020
of 25.5 – 27.5 mboepd
• Resilient asset values throughout
• Solid base of 2P reserves: Total 2P the year: No asset impairments
reserves of 201 mmboe at year end necessary in a challenging envi-
ronment, demonstrating value of
• 2C resource base of 200 mmboe: DUC assets
Low risk organic growth identified
in high value, low capex projects
within the DUC
FINANCIAL
• Fully funded to deliver the Tyra for which the Company would
redevelopment project: Unre- be commercially compensated
stricted cash of USD 259 million during 2020, generated a total
at the end of 2020, coupled cash payment to us of USD 98
with undrawn RBL capacity of million over the period
approximately USD 250 million
post-completion of underwritten • Operations remained profitable
amend, extend and increase of and cash generative despite
facility, strongly supports Nore- market volatility: As a result of
co’s financial position through the Noreco’s hedging arrangements,
Tyra redevelopment period the Company generated adjust-
ed EBITDA and cashflow from
• Strong realisations driven by operations during 2020 of USD
material hedging arrangements: 358 million and USD 346 million,
Average realized oil price in 2020 respectively
of USD 66.8/bbl, an approximate-
ly 66 percent premium to the • Return of capital to sharehold-
average Dated Brent price of USD ers: Share buyback of approxi-
40.3/bbl over the same period mately USD 10 million during the
first half of 2020 demonstrates
• Financial outcome of operations Noreco’s long-term desire to
enhanced by guaranteed liquids return capital to shareholders,
volumes: Liquids Protection with significant increase in levels
Agreement with Shell, which fixed of this expected once Tyra is
a minimum level of oil production onstream
2020 HIGHLIGHTS CONTINUED
T YR A
• A game-changing project: To • First delivery from yard: In Sep-

date the largest project carried tember, two jackets were safely
out on the Danish Continental installed on Tyra after completing
Shelf, expecting to increase net fabrication at Dragados Offshore
production by 90 percent, de- S.A.
crease emissions by 30 percent
and unlock gross reserves in • Updated schedule for first gas:
excess of 200 mmboe Due to COVID-19, local govern-
mental imposed restrictions at
• Successful execution of offshore the fabrication yards impacted
decommissioning campaign: the schedule of the new Tyra top-
Wellhead- and riser platforms sides, and first production from
removed by the world’s largest redeveloped Tyra is expected in
crane vessel, Sleipnir, and the Q2 2023
Tyra East and Tyra West pro-
duction platform topsides were
removed by Pioneering Spirit in
August
• Safety and sustainability:

Dismantling work carried out
onshore for increased safety and
more than 95 percent of Tyra
installations are being recycled.
2020
Letter from
Executive Chair
2020 was an unprecedented year for everyone, and for our
industry in particular. It was also the first full year reflecting
Noreco’s ownership in the Danish Underground Consortium.
The pandemic impacted everyone and our industry was not
immune, with a combination of extreme market volatility and
operational impacts to be mitigated. While we didn’t predict
this when fully hedging our price and volume exposure in
2020 as part of the DUC acquisition, the benefits were ma-
terial nonetheless. The robust performance safeguarded by
these arrangements is a testament to the underlying and con-
tinuing resilience of our business model. As we are moving
through 2021 and get closer towards Tyra first gas, our focus
will remain on creating value for our shareholders.
Operationally, we delivered pro- We agreed early this year an under-

duction at the top end of our annual written increase to USD 1.1 billion of
guidance and our 2P reserves re- our Reserve Based Lending Facility
placement ratio since we complet- that, combined with the price hedg-
ed the DUC acquisition in mid-2019 ing protected contribution from
stands at 104 percent. Our prog- our production base, enhances
ress to date shows the value of the our financial position. Through the
steps our organization takes daily to defined, fully funded growth that
ensure we deliver the long-term val- Tyra provides we will deliver a near
ue potential of our DUC investment. doubling of production and a step-
Beyond our stable base of produc- change in cash flow generation. As
ing assets, the Tyra Redevelopment we consider what is next for Noreco
Project is substantially progressed beyond Tyra, we have over 200
and will continue to de-risk during mmboe of contingent resources
2021. The full modernization of the and several identified opportuni-
facilities will extend field life by 25 ties that are being progressed with
Riulf Rustad years while maintaining a produc- the objective of supporting our
Chair of the Board tion capacity of 60,000 barrels of longer-term production and future
oil equivalent per day and enable cash flow levels.Post-Tyra, with sub-
substantial volumes from new stantially lower capex commitments
projects going forward. The proj- that can be scaled appropriately,
“Our long-term capital ect reached important milestones our long-term capital discipline will
discipline will support during 2020, with an extensive off- support significant free cash flow
significant free cash flow shore decommissioning campaign generation and our intention to
generation and our intention carried out and the first delivery return capital to shareholders in a
was taken from yard. This year will material and sustainable manner.
to return capital to share- be an activity-intensive year with
holders in a material and the sail away of the accommodation
sustainable manner” module and the three wellhead
and riser platforms significantly
progressing the project towards
first gas.
OUR ASSETS
Overview
The acquisition of Shell’s upstream assets in DUC which was
completed July 2019 transformed Noreco into the second
largest oil and gas producer in Denmark and a significant E&P
player. The asset portfolio includes four hubs and 11 produc-
ing fields of which three hubs are currently producing and one
hub is under redevelopment. The Company has a significant
reserves base with 201 mmboe of 2P reserves and approxi-
mately 200 mmboe of 2C reserves.
OIL /GAS PRODUCTION SPLIT
77 % OIL
23% GAS
2 P RESE RVES
201
mmboe (net)
TYRA
PRODUCTION
28.5
mboepd (net)
HALFDAN
GORM
DAN
OPE R ATIONAL
E FFICIE NCY
82%
OUR ASSETS
Dan Hub
ALMA
DAN
KRAKA
REGNAR
Producing field
Discovery
No production
The Dan field, which is a core asset on the DCS, was discov-
ered in 1971 and brought on production in 1972. Dan was
NET RESE RVES the first field in production in Denmark, and close to 28 per-
mmboe cent of total Danish oil production has been extracted from
31.2
the Dan field.
The Dan field is one of the largest North Sea chalk fields with both Ekofisk
and Tor Formations, both with oil rims overlying gas caps and communication
between the two formations. The reservoirs are high porosity, but low perme-
ability with long transition zones. The Dan field has been developed in several
phases and now consists of a total of 12 platforms, 45 active oil wells and 37
NET PRODUCTION active water injectors. Dan has two satellite fields, Kraka and Regnar (shut-in).
mboepd
2.6
The Dan process centre consists of the Dan F complex, the old Dan complex,
and the satellites Kraka and Regnar. Dan was brought on-stream in 1972,
Kraka in 1991, Regnar in 1993. The oil production from Dan is transported to
Gorm while the gas is transported to Tyra.
OPE R ATIONAL
E FFICIE NCY
75%
Dan Field
NET PRODUCTION HIGHLIGHTS 2020
mboepd • MFB-10 A and MFB 13 workovers
2.3
were carried out successfully,
replacing tubing, new upper and
lower completion, and Xmas
trees, adding circa 1 mmboe.
• Chemical injection on Dan

installed.
• MFB-21 and MFB-22 wells have

been closed since the beginning
of 2020 due to well integrity
issues, planning to be restored in
Q2 2021, adding 1,400 boepd)
NET PRODUCTION Kraka Field

mboepd
0.3
Kraka is a tie-back to the Dan field
and is an oil field located 8 km to
the southeast of the Dan field. The
field was brought on production in
1991 and produces oil and gas from
the Ekofisk chalk ten wells have
been drilled and currently 7 oil wells
are producing.
DAN HUB 2021 OUTLOOK The on-going and planned de- studies with the objective to
velopment of Dan, Kraka and further increase oil recovery.
Regnar is based on several field
development plans and individual
well proposals. These activities
include well and reservoir
management (WRM) activities,
drilling activities and development
DAN HUB 2021 OUTLOOK
Several reservoir management studies are currently on-going

and planned with the intention to determine the potential to in-
crease hydrocarbon recovery from the Dan field. In addition,
processed data from the 2016 4D seismic survey covering
the Dan and Kraka fields will be utilized in all studies to identify
opportunities to improve field recovery. Production enhance-
ment initiatives will be continuously evaluated based on the
data acquired.
OUR ASSETS
Gorm Hub
GORM
ROLF
SKJOLD
DAGMAR
Producing field
No production
The Gorm field was discovered in 1971 and brought on pro-

duction in 1981, the second Danish field in production after
NET RESE RVES
Dan. The Gorm hub also includes Skjold, Rolf and Dagmar,
mmboe
and is the export hub for most of the liquids produced in
17.5
Denmark.
The field produces oil and gas from the Ekofisk and Tor Chalk reservoirs.
The field is a domal structure divided into a deeper western A-block and the
shallower eastern B-block. In total 46 wells have been drilled, with currently
18 active producers and six active water injectors. Gorm serves as the second
stage processing center for Halfdan, and as an oil transfer hub for Dan, Tyra,
NET PRODUCTION and Halfdan. The oil is transported ashore to Frederica via pipeline from the
mboepd riser platform Gorm E while gas is sent to Tyra.
1.6
OPE R ATIONAL
E FFICIE NCY
77%
Gorm Field
NET PRODUCTION
HIGHLIGHTS 2020
mboepd
• Successful well service inter- were also executed, results were
0.5
ventions (SSD shifting) GFN 38, very satisfactory, resulting in a
GFN 53B, GBN-58A adding back halting of the production decline
approximately 850 boepd in Gorm during 2020.
• Well scale inhibitor squeezes • Stable oil production on Rolf.
NET PRODUCTION Skjold Field

mboepd
0.9
The Skjold field is an oil satellite flank areas. In total thirty wells have
tie-back to Gorm. It was discovered been drilled, with currently 13 active
in 1977 and brought on production oil producers and seven active
in 1982. The field is a dome shaped water injectors.
structure with a relative thin chalk
reservoir on the crest, which thick-
ens towards the outer crest and
NET PRODUCTION Rolf Field

mboepd
0.1
Rolf is an oil field, which has been intervals of good permeability with
developed as a satellite to Gorm. fracture connected matrix porosity.
The field was discovered in 1981 Three wells have been drilled, with
and brought on production in 1985. currently one active oil producer.
The field produces from the Ekofisk
and Tor Chalk reservoir with
GORM HUB 2021 OUTLOOK A “Gorm reconfiguration” project chain from subsurface to export
was initiated in 2020 and con- to shore of the Gorm processing
tinued to develop this year with hub and its satellite fields and are
an objective to assess possible economically evaluated to form
strategies for operating the Gorm a firm recommendation for the
Hub past its mature life and into Gorm Hub. The study and recon-
its late life (up to the Cessation of figuration proposals for Gorm will
Production – COP). The assess- continue through 2021.
ment integrates the entire value
OUR ASSETS
Halfdan Hub
HALFDAN
NORTH EAST
HALFDAN MAIN
Producing field
The Halfdan hub includes Halfdan and Halfdan NE. Halfdan is

the largest producing field in Denmark and the most important
NET RESE RVES
DUC asset in terms of value and resources, both technically
mmboe
and commercially.
65.6 The Halfdan main field was discovered in 1998, brought on stream in 1999
and Halfdan North East in 2004. There are no distinct boundaries separating
the Halfdan main field and Halfdan North East area. Halfdan North East is a
development of the gas accumulation in the Ekofisk formation to the North
East of the Halfdan field. The main field produces oil and gas from the Tor
Chalk reservoir. The Halfdan main oil accumulation is contiguous with the Dan
accumulation. It has been developed in four phases, and 71 wells have been
NET PRODUCTION
drilled, with currently 35 active oil producers and 17 active water injectors.
mboepd
Halfdan North East has been developed in three phases, and 21 wells have
6.2
been drilled, with currently 16 active gas producers.
Halfdan consists of two main groups of platforms, Halfdan A and Halfdan

B in addition to an unmanned wellhead platform, Halfdan CA (North East).
Produced oil is transported in pipeline to Gorm while the gas is transported
to Tyra West. Gas can in addition be imported (for injection) and exported to
Dan. Injection water is supplied from Dan.
OPE R ATIONAL
E FFICIE NCY
87%
Halfdan Field
NET PRODUCTION HIGHLIGHTS 2020
mboepd • Well maintenance operations • As a consequence of COVID-19
6.2
completed according to plan. the number of failures and well
integrity shortfalls during the
• Well service activities planned year were significant above
for the year were put on hold due satisfactory levels including
to COVID-19 precautions and larger shortfalls associated with
rescheduled for H1 2021. not having a drilling rig in 2020.
• Wireline work was largely focused

on maintaining well integrity
with several subsurface safety
valve replacements and repairs.
Multi-finger caliper runs were
performed either to check the
condition of wells which were
suspected of having rapid corro-
sion or to calibrate well corrosion
model.
Further Developments
HCA GAS LIFT HALFDAN NORTH
The HCA gas lift project is planned There are a number of projects and
to be executed in Q4, 2021. The gas studies ongoing for the greater
lift is required in order to support Halfdan development. The most
well production and thereby opti- mature is the Halfdan North project
mize production potential. Project which targets a reservoir located
scope comprises tie-in modifica- between the producing Halfdan
tions to Halfdan B topside facilities and Tyra SE fields. In December
as well as a gas lift manifold to be 2020 the DUC submitted field
installed at Halfdan C development plans to the Danish
Energy Agency for the potential
field expansions of the Halfdan
North development.
HALFDAN HUB 2021 OUTLOOK
Production enhancement initiatives will be continuously
evaluated based on the data acquired.
Reservoir models and recovery optimisation, integrated

static and dynamic models of the Halfdan and Halfdan North-
east fields were built and reviewed as part of the Greater
Halfdan Field Development Plan (FDP). As a part of the
Greater Halfdan Field Development Plan (FDP), models were
built to allow a consistent evaluation approach across
reservoirs and areas while also addressing the interaction
between the Ekofisk and Tor reservoirs. The models are used
to identify development opportunities, to optimise the
existing development and to increase the ultimate recovery
from the field.
OUR ASSETS
Tyra Hub
LULITA
HARALD EAST
FREJA
HARALD WEST
SVEND
The Tyra Field is the largest gas condensate
field in the Danish Sector of the North Sea.
It was discovered in 1968 and production
started in 1984. Its facilities process more
than 90 percent of the gas produced in
Denmark, as well as the entire gas
production of the DUC.
The Tyra main field is a gas field discovered in 1968

BOJE
and brought on production in 1984. Tyra South East
is an oil dominated field area discovered in 1991 and
brought on in 2002, with first oil in 2015. The field
produces mainly from the Ekofisk and Tor Chalk ADDA
reservoirs. A total of 93 wells have been drilled on VALDEMAR
Tyra main and South East, with currently 47 active
oil and gas producers. The Tyra field consists of two ROAR
main process centers, Tyra East and Tyra West, which
are linked to five unmanned satellite fields, including
Tyra Southeast, Harald, Valdemar, Svend and Roar. TYRA
The gas is exported to shore and the oil is exported
to Gorm E. The Tyra East and West comprises of 11
platforms and due to subsidence, the field is currently
being redeveloped.
Producing field
No production
NET RESE RVES

mmboe
86.8
Tyra Field Valdemar Field
HIGHLIGHTS 2020 The Valdemar field is an oil and gas field discovered in
• All wells on Tyra and its satellites safely plugged and 1977 and further appraised in 1985 and brought on pro-
abandoned for the extended shutdown related to the duction in 1993. The Lower Cretaceous chalk has been
Tyra Redevelopment. The project had significant prog- the primary development target, and 26 wells have been
ress during 2020. For further details please see Tyra drilled on Valdemar, with currently 22 active oil and gas
Redevelopment section in the Asset Overview. producers.
Roar Field Harald Field

Roar is a gas field with an oil rim tie-back to Tyra East. Harald is a gas/condensate field located in the
The field was discovered in 1968 and further appraised north-western part of the Danish sector. The Harald
in 1981. The field was brought on production in 1996. The field comprises two structures; Harald East discovered
field produces gas and condensate from the Ekofisk and in 1980 and Harald West discovered in 1983. The fields
Tor Chalk reservoir. Four gas producer wells have been were brought on production in 1997. The Harald West
drilled, with all currently being active. reservoir consists of Middle Jurassic sandstones, and
Harald East is an elongated dome structure in the Upper
Cretaceous Ekofisk and Tor Formation. Four wells have
been drilled, two on Harald West and two on Harald East,
and all four wells are currently active.
Lulita Field
Lulita is an oil field with a gas cap discovered in 1991
which was brought on production in 1998. The reservoir
consists of Middle Jurassic sandstones. Two wells have
been drilled. However only one is producing. DUC holds
a 50 percent interest in the Lulita field with Ineos (40%)
and Noreco (10%) as partners.
Tyra Redevelopment
Tyra is a natural gas field in the Danish sector of the North Sea
currently under redevelopment. The Tyra Redevelopment
project is, to date, the largest project carried out on the
Danish Continental Shelf, and is expecting to increase net
production by 90 percent and unlock gross reserves in ex-
cess of 200 mmboe. Redeveloped Tyra will decrease opex
significantly and lower emissions at the field by 30 percent.
In addition, the completed project will extend field life by 25
years and produce enough gas to power what equals to 1.5
million homes in Denmark
BACKGROUND
In 2016, The Danish Underground Consortium announced its plan to cease
production from the Tyra gas field by the end of 2019 and to redevelop the
field infrastructure. The Tyra hub required redevelopment due to compaction
of the chalk reservoir, where the seabed has subsided by six metres over a
period of 30 years of production. The redevelopment project was necessary
to ensure that both crew and equipment are safe, as well as maintaining an ef-
ficient level of production. Final investment decision was made in December
2017, following the approval by the Danish authorities.
The execution of the project is both a global and local effort. In addition to
fabricating installations in both Europe and Asia, project efforts are being
executed locally in Esbjerg and offshore in the Danish North Sea. The scope
of the project includes removing old facilities, modifying existing ones,
and installing new features. The two existing process and accommodation
platforms will be replaced by one new process platform and one new accom-
modation platform. The four wellhead platforms and two riser platforms will
have their jackets extended by 13 meters, and the current topsides will be
replaced.
2020 MILESTONES & DEVE LOPME NT

During 2020 several milestones were reached, moving the project closer to-
wards what will be a state-of-the-art North Sea production and export facility.
The execution of the Offshore Decommissioning Campaign was successfully
completed according to plan in the summer. The wellhead and riser plat-
form topsides and bridges were removed by the world’s largest crane vessel
Sleipnir, and the Tyra East and Tyra West production platform topsides were
removed by Pioneering Spirit. Dismantling work was carried out onshore for
increased safety. Sustainability is a core driver for the project with both the
removed platforms being recycled at Modern American Recycling Services’
(M.A.R.S.) recycling yard in Frederikshavn where more than 95 percent will be
recycled. The recycling of the old Tyra topsides at M.A.R.S. is to date the larg-
est recycling of offshore installations carried out in Denmark. The wellhead
and riser platform topsides and bridges are recycled at Sagro’s recycling yard
in Rotterdam.
In September, the project took delivery of two jackets after completing

fabrication in the yard, Dragados Offshore S.A, in Spain. The jackets form the
foundation for the new Tyra process and accommodation platforms and were
the first new jacket structures delivered and installed for the Tyra Redevelop-
ment project.
Due to the global pandemic, local governmental imposed restrictions at the

fabrication yards and the global supply chain had an impact on the schedule
of the new Tyra topsides and as a consequence the schedule for first gas was
updated to Q2 2023.
OUTLOOK 2021
High activity levels at both the platforms and two modules take module is being fabricated by
fabrication yards and offshore is place on three yards: Sembcorp Rosetti Marine in Ravenna, Ita-
expected during 2021, and sev- Marine in Singapore is currently ly, and the process module by
eral key milestones will move the fabricating the wellhead- and ris- McDermott in Batam, Indonesia.
project significantly towards first er platforms for Tyra East and Tyra
gas. Fabrication of the two West, the accommodation
OUTLOOK 2021 CONTINUE D
Both the accommodation module and the Tyra
East wellhead and riser platform are expected
to be delivered from the yards and sail away
during 2H followed by initiation of offshore
hook-up. Shortly after, the Tyra West well-
head- and riser platform will be delivered from
Sembcorp for sail away. The remaining yard
fabrication left for the project will be completed
in 2022, and the process module will sail away
for hook-up and installation during that same
year. First gas from the redeveloped Tyra is
expected in Q2, 2023.
PART II
Sustainability
24 Introduction
26 Short Term Focus
27 Sustainability Linked KPIs
28 Decommissioning & Recycling of the Tyra Facilities
29 Renewable Power
30 Subsurface CCS and Energy Storage
31 Offshore Hydrogen & PtX Production
32 DHRTC
33 Biodiversity in the DUC
Energy Transition in
a Profitable Way
Noreco recognizes that, as a Company engaging in the
COMPANY OBJECTIVES
production of oil and gas, it has a responsibility to be an
& COMMITME NTS active participant in the Energy Transition, both within and
• Transparency in the reporting of outside of the DUC.
the Company’s operational and
environmental performance With hydrocarbons expected to remain an important part of the energy
mix for the foreseeable future, reducing emissions is the key component to
• Facilitation of improved technical,
ensure that Noreco’s activities can continue to contribute with the smallest
commercial and economic
environmental footprint possible. As part of the DUC, Noreco is committed
framing of sustainability initiatives
reducing emissions from the DUC operations by 400-500 kton towards
achieved through partnerships
2030, and thereby contribute to the delivery of the Danish 70% CO2 target
• Focus on renewable power supply in 2030. However, in order to justify the deployment of capital, the activ-
to Noreco’s offshore installations ities to deliver these targets will need to support the broad objectives of
• Pursue extended lifetime of the Noreco’s stakeholders, including being value additive to the Company and
offshore installations by embrac- its shareholders. Hence sustainability at Noreco is viewed through this lens.
ing and integrating sustainable
initiatives supporting continued The Company has taken the first step of lowering the cost of participating
use of subsurface structures for in projects that result in significant environmental enhancements through
CCS and for energy storage its RBL’s ESG linkage. The Company intends that its future reporting and
communication on sustainability will be based on GRI guidance and follow
• Evaluate through partnerships the recommendations of the Task Force on Climate-related Financial
renewable technologies for Disclosures.
hydrogen and Power-to-X (“PtX”)
offshore including potential syn- Beyond the environment, Noreco will continue to advance a social agenda
ergies between Noreco’s offshore that supports its people and communities through operating sustainably
hydrocarbon production facilities and safely, while also behaving in a way that recognizes the importance of
and offshore renewable technol- diversity. The Company established an ESG Committee in 2020 which
ogies is contributing to the establishment and execution of a long term
sustainability strategy.
OUR ASSET
RE MARKS 2020 PE RFORMANCE
CO2 emission
The main source of CO2e is the fuel gas required for production. In addition CO2 verified: 270245 tons CO2
the figure also includes the contribution form flaring and other fuels . The GHG all sources: 322,6 ktCO2e
2020 emission is low due to the production shut down of the Tyra and GHG Int:
Harald facilities during the Tyra Redevelopment
Fuel consumed
Fuel is consumed by single cycle gas turbine powering generators, gas FG verified: 100,46 mill Nm3
compressors and pumps. Natural gas fuel consumption for 2020 is lower GHG FG: 237,8 ktCO2e
and diesel consumption is higher due to the production shut down of the Diesel verified: 2298 m3
Tyra and Harald facilities during the Tyra Redevelopment GHG Diesel: 6,2 ktCO2e
Flaring
Flaring of natural gas is occurring on all hubs when required to allow safe Flare verified: 14,97 mill Nm3 GHG
operation during production upsets and non-routine operation. Flare: 43,10 ktCO2e
Fugitive emissions
Venting of gas from production facilities is to ensure safe operation. GHG Venting: 15,6 kt
Venting is primarly from systems operating at atmospheric pressure but CO2e CH4: 395,4 tons
it occurs also during facilities maintenance. The reported figure is likely
underestimated.
Oil discharge to Sea

Water is produced from the fields together with the hydrocarbons and 34,13 tons oil 5,7 mg/L
discharged to sea after separation, if not reinjected. if not reinjected. The 5,99 mill m3 water
water produced is partly formation water and partly injected sea water.
Spills
Spills from closed systems and from handling of various liquids are reported 18 Platform reported spills
in accordance with environmental regulation. 270 Kg Chemicals
42 Kg Oil
NOx, SOx emission

The operation of gas turbine drives and diesel engines offshore causes NOx: 1,41 tons
emissions of nitrogen oxides and sulphur oxides. SOx: 14,72 tons
Net figures based on data made available by the operator of the DUC
NORECO’S ASSET
The Company’s
Short-Term Focus
In 2021 we will focus on a number of activities to establish the
smallest environmental footprint possible.
Tyra on stream The 2023 reinstatement of the Tyra hub will reduce fuel consumption and
provide a higher operating efficiency. Redeveloped Tyra is expected to
have 30 percent lower emissions compared to the old Tyra facility and in
addition lower the flaring by 90 percent.
Flare reduction Flare reduction intiatives have been evaluated during 2020 and will in 2021
include a Halfdan reroute for final stabilisation. Also, the evaluation of Gorm
stabilisation may contribute to 2021 flare reduction.
Electrification A study of the potential of introducing renewable power to replace gas driv-
en single cycle turbines was initiated in 2020 to evaluate the modification
scope on Noreco's facilities. This study is being continued with a focus on
defining the technical configuration, the most optimal replacement method
and defining the associated costs. Noreco see this activtity as a signficant
step towards lowering Noreco's carbon footprint.
Emmission monitoring Improvements are being made to emission monitoring by initiating annual
leak detection and repair campaigns (LDAR) with focus on comprehensive
register of sources, measurement equipment and evaluation option for
better quantification of fugitive emissions. Transition towards new software
additionally will improve reporting efficiency and data analytics. Further,
novel technique development will be supported in the area of drone imag-
ing technology and LIDAR 3Ds.
Chemicals Chemicals are being phased out and replaced by green chemicals in a con-
tinued dialogue with Danish Environmental Protection Agency.
NORECO'S ASSETS
Sustainability Linked KPIs

Company specific KPIs set based on two objectives:
(1)emissions reduction, and (2)power from renewables
To justify the deployment of capital, the activities to deliver targets need to support the broad
objectives of Noreco’s stakeholders, including being value additive to the Company and its
shareholders. Noreco has taken the first step of lowering the cost of participating in projects that
result in significant environmental enhancements through the Company's RBL’s ESG linkage.
KPI
Emissions Reduction (Scope 1 and Scope 2)
TIME FR AME
Kg CO2e/boe
2024 2026 2027
KPI Target: KPI Target: KPI Target:

24 23 < 16
Key Noreco Activities: Key Noreco Activities: Key Noreco Activities:
Tyra production on-stream Facilities Reconfiguration Renewable power
KPI
Renewable Power
TIME FR AME
USD per annum
% of power from renewable sources (e.g. electrification)
2021-23 2023-26 2027 2029
KPI Target: KPI Target: KPI Target: KPI Target:

$1-3mm FID of Phase 1 30% 80%
Key Noreco Activities: FID of Phase 2 Key Noreco Activities: Key Noreco Activities:
DUC: Phase 1 renewable Phase 1: replace existing power Phase 2: replacing
power front-end studies generation with electric power mechanical driven units
initiated in 2020 generation
Decommissioning
& Recycling of
the Tyra Facilities
As part of the Tyra Redevelopment Project, the old Tyra pro-

duction facilities were removed during the summer of 2020 by
HMC’s crane vessel Sleipnir and Allseas’ vessel Pioneer Spirit.
The facilities were transferred to the new recycling yard of M.A.R.S. at

Frederikshavn in Denmark and to the Sagro’s recycling yard in Rotterdam,
Netherland. Removal of the 2 remaining jacket structures is scheduled for
2023. Scrapping and recycling is currently ongoing in the yards.
Total weight old facilities: 50,000 tonnes (40,000 tons topsides and 10,000
tons substructure).
The recycling of the old Tyra topsides at M.A.R.S. is the largest recycling of
offshore installations in Denmark’s history and 95 percent of the old facilities
are expected to be recycled.
THE COMPANY'S VIEW ON NORECO'S OPPORTUNITY SET
Renewable Power
as an Enabler for Transition
Renewable power supply is one of the key component of the Danish energy transition. Locating
renewable power in the vicinity of the Company's oil and gas facilities can forge synergies
between existing installations and the new power infrastructure. Notably, Noreco's installations
are located in shallow water also allowing for cost effective utilization of wind farm developments
in the vicinity.
Supply from a wind farm which has a mesh grid connection with other off-
shore windfarms and with shore grids can be the enabler for a significant
reduction of emissions from Noreco's oil and gas installations. This both in
respect of reducing fuel consumption but also in order to increase production
efficiency.Renewable power can thus be part of the solution to continue
producing remaining hydrocarbon reserves in a sustainable way.
An electricity grid connection in the central north sea may also utilise the
nearby power cable infrastructure available or in the making (e.g. Viking Link,
German grid.)
A central North Sea wind farm with the Company's facilities as an early
offtake point can also be a required front runner for a future Danish Energy
Island with renewable storage and grid connections to Denmark, UK and
other North Sea countries.
Partnering with wind farm developers and infrastructure stakeholders can

become a early enabler for the transition towards a reduced emission from
our assets.
Partnering
opportunity
between oil and gas
and renewable
stakeholders
Nearby power Multiple offtake
infrastructure eg from Offshore Wind
Viking Link, German Farm – early supply
Wind Farm to oil and gas
Renewable
Reduce emissions power Central North Sea
Wind Farm - Front
of our oil and gas
runner for Energy
installations
Island
Giga Watt Central North

Wind Farm and Mesh Sea area for Wind
Grid connections by Farm Shallow
3rd party water 35-45 m
Subsurface CCS
and Energy Storage
Noreco's subsurface assets may after hydrocarbon depletion become a significant element in
supporting the change towards a renewable society
As part of the Danish energy transition there may be a need for shorter- or
longer-term CO2 capture and subsequent long term storage. the Company's
assets may contribute to such a storage opportunity by being able to hold
large quantities of CO2. The storage can be established in our oil and gas
field when depleted. Here Noreco's geological understanding and technical
expertise may prove significant in in assisting in the renewable transition.
Hydrogen production offshore in connection with an extensive offshore wind

farm development is a possibility in order to allow for seasonal energy storage
and energy back-up during periods with limited renewable production or
during periods of higher demand. Large seasonal storage of hydrogen can be
accommodated in the geological salt formations below several of our oil and
gas fields in the central North Sea. In partnership with renewable enterprises,
Noreco's understanding and surface capabilities can be applied to establish
the technical feasibility, the practical implementation and the operation of
such energy storage. Here also the potential for reusing our existing infra-
structure and facilities may become an enabler for lower costs. The planned
Danish Energy Island concept can, if placed close to the fields which have
geological salt formations, become the main producer of the hydrogen
utilizing such energy storage.
Partnering
opportunity
between oil and gas
and renewable
stakeholders
Opportunity
Opportunity
for reuse of
for reuse of oil and
existing oil and
gas facilities
gas pipelines
CCS and
Energy Depleted
Energy Island Storage field significant
potenatial
for CCS
Seasonal energy
Back-up for
storage (Hydrogen)
interruption of
in subsurface salt
renewable supply
dome caverns
Facilities: Offshore
Hydrogen & PtX Production
With the planned substantial expansion of the Danish offshore wind power to supply renewable
power to consumers in northern Europe, it will be of major importance to establish necessary
industrial solutions for producing and handling hydrogen and PtX offshore.
Hydrogen and the PtX production technology will need to Several electrolysis technologies are currently being
be adapted to offshore operating environment and the matured and progressed to serve the need for utilizing
facilities needs to be constructed to allow for efficient surplus wind power. Noreco see it important to be a
maintenance and safe operation. Here our knowledge contributor to such maturation by assisting with our
from Noreco's facilities and our understanding of safe upstream knowledge. This may also create potential
design practices can be a partnering opportunity with to reuse Noreco's offshore facilities in support of the
enterprises who are engaged in hydrogen as a renew- energy transition.
able energy source.
Arranging for hydrogen and PtX production close to
Initial evaluation of offshore hydrogen production fea- existing oil and gas installations and integrating these
sibility may utilize offshore oil and gas facilities as test solutions into a Danish Energy Island concept all located
ground before being deployed on a larger scale. The in the Danish central/southern North Sea will also allow
Company's offshore facilities may provide support for for export of hydrogen through existing gas infra-
such testing and also provide the necessary practical structure to Denmark's shore or to Netherlands.
know-how needed for large capacity industrial solutions.
Partnering
opportunity btween
oil and gas and
renewable
stakeholders
Opportunity for
reuse of existing oil
Opportunity
and gas pipelines
for reuse of oil and
for hydrogen to
gas facilities
Denmark and the
Offshore
Netherlands
Hydrogen
production Hydrogen
technology (Solid
Oxide Electrolyse
Energy Island Cells, Polymer
Electrolyte Mem-
brane Electrolysis)
partnering
Offshore
operational and
process safety
practices
DHRTC
Research and Technology

to Reduce Environmental
Impact
Together with its partners in the DUC, Noreco invests

in the research and development through partnership
with DTU (Technical University of Denmark). The DUC
has together established the Danish Hydrocarbon Re-
search and Technology Centre ("the DHRTC"). DHRTC
conducts research aimed towards responsible and efficient
oil and gas production from the Danish North Sea, while
seeking to reduce the environmental and climate footprint.
In 2020 the DUC contributed funding amounting to DKK 131
million to DHRTC.
WORK CONDUCTE D BY THE DHRTC:
Advanced Water Flooding

• Improve sweep efficiency of remaining oil in Tor and Ekofisk formations
Lower Cretaceous
• Improve recovery
Well and Production Technology

• Improve integrity and performance of existing and new wells
Operations and Maintenance Technology

• Functional model of process for AI assisted operator support
Enhanced Well Chemistry and Integrity

• Extension of commercial field life by enhanced methods for corrosion,
scale and souring prediction and mitigation
AI-assisted Structural Integrity

• Ensure the safety of structures for continued production
Produced Water Management

• Reduce the environmental footprint associated with oil and gas produc-
tion
Photo: ©DHRTC
Abandonment
• Cost effective abandonment for short and long-term environmental
protection
Biodiversity in the DUC
During the past years, the DUC, through the operator Total,
has carried out a broad range of scientific studies to increase
the understanding of the effects of projects and operations
on offshore biodiversity. Studies have been developed and
carried out by academics and environmental specialists with
expertise in the fields of marine mammal biology, underwater
acoustics, metagenomics and ecotoxicology.
The DUC supported marine mammal research program initiated in 2013 has
made another significant scientific contribution by providing data regarding
the effect on harbor porpoises of underwater sound generated by seismic
surveys. The results were published in the peer-reviewed scientific journal
Frontiers in Marine Sciences.
The DUC also supports researchers on the development of new scientif-

ic methodologies in the studies of biodiversity. For example, the partners
collaborated with researchers at DTU-aqua for the offshore deployment and
testing of state-of-the-art technology in remote and automated biodiversity
monitoring. The pilot study aimed at testing the use of a second-generation
environmental sample processor (ESP) in an offshore environment. The ESP
was deployed close to the facilities to sample and analyze environmental DNA
of porpoise, dolphin and fish species.
The Environmental Team in the DUC arranges dedicated biodiversity aware-

ness sessions with onshore and offshore operator employees. Offshore staff
is encouraged to report wildlife sightings around platforms and the informa-
tion is shared with large regional inventory of species like basking sharks or
bluefin tuna.
PART III
From the Boardroom

35 Noreco Board of Directors
37 Directors Report
48 Reporting of payments to Governments
49 Corporate Governance Report 2020
56 Corporate Social Responsibility
59 Statutory Accounts 2020
75 Consolidated Statements
129 Auditors Report
135 Statement of Compliance
136 Alternative Performance Measures
138 Supplementary oil and gas information (unaudited)
139 Information About Noreco
NORECO 2020 ANNUAL REPORT 34

The Board of Directors
RIULF RUSTAD
Executive chair
Riulf Rustad is a Norwegian businessman with a long track record from investments in
sectors such as oil & gas, oil services and offshore. Mr. Rustad operates through his
platform Ousdal AS and holds/has held various board positions, both in listed and unlisted
companies. Mr. Rustad was elected as Chairman of the board of directors of Noreco in
2016.
MARIANNE LIE
Board Member
Lie is a consultant at Fajoma Consulting AS. She holds various board positions including
Treasure ASA, and Wallenius Wilhelmsen ASA. She has previously held various board
positions including DNB ASA, R.S. Platou, Rainpower ASA and Fortum Corporation. Lie has
served as a member of the board of directors in Noreco since 26 May 2016.
TONE KRISTIN OMSTED

Board Member
Omsted holds a BA Hons. in Finance from University of Strathclyde. She has broad
experience from corporate finance and capital markets and currently serves as head of
investor relations at Entra ASA. Previous experience includes 14 years as an investment
banking executive at SEB Enskilda. She has also served on the board of directors of Panoro
Energy ASA. Omsted has served as member of the board of directors of Noreco since 26
May 2016.
COLETTE COHEN
Board Member
Cohen is a chemistry graduate from Queens University Belfast and also holds a master’s
degree in Project Management and Economics. Her career began with BP in 1991 and she
has worked for companies including ConocoPhillips and Britannia in the North Sea, Norway,
the US & Kazakhstan. Colette was SVP for Centrica Energy’s E&P UK/NL and in August 2016
became the CEO of The Oil & Gas Technology Centre. Cohen has served as member of the
board of directors of Noreco since 7 August 2019 and is currently elected until the ordinary
general meeting in 2021.

YVES-LOUIS DARRICARRÈRE
Board Member
Darricarrère is graduate of Ecole des Mines de Paris, Institut d’Etudes Politiques de Paris
and holds a master’s degree in Economics. After two years in lecturing and research, he
joined in 1978 Elf Aquitaine (later merged with Total) holding various leading positions. In
July 2012, he became President of Total Upstream, which brought together Exploration &
Production and Gas & Power; he filled the position until he retired in August 2015. Mr.
Darricarrère is currently a Senior Advisor with Lazard, a multinational financial advisory and
asset management firm, as well as a Senior Lecturer in energy geopolitics at the Institut
d’Etudes Politiques de Paris, a board member of ORTEC and CIS and chair of the board of
NHV. Mr. Darricarrère has served as member of the board of directors of Noreco since 7
August 2019 and is currently elected until the ordinary general meeting in 2021.
CHRIS BRUIJNZEELS
Board Member
Bruijnzeels holds a master’s in Mining Engineering from the University of Delft. He is

currently Chairman of ShaMaran Petroleum Corp. and has various other board positions.
Chris has since 1985 worked with International Petroleum Corp, Lundi has served as
member of the board of directors of Noreco since 7 August 2019 and is currently elected
until the ordinary general meeting in 2021.n Petroleum, PGS Reservoir Consultants, Shell
and NAM in various leading positions. Mr Bruijnzeels has served as member of the board of
directors of Noreco since 7 August 2019 and is currently elected until the ordinary general
meeting in 2021.
Robert J. McGuire
Board Member
McGuire is a senior professional at MAEVA Group, LLC., a turnaround and restructuring

firm. He has a 25 year global track record as an advisor, investor and business leader, has
served on numerous boards and has extensive experience in the energy sector, having led
the European energy businesses at both Goldman Sachs and J.P.Morgan. He has a BA from
Boston College and an MBA from Harvard Business School. Mr McGuire has served as
member of the board of directors of Noreco since 2 March 2020.

Directors’ Report
Norwegian Energy Company ASA ("Noreco" or the gross reserves in excess of 200 mmboe. The Tyra hub was
"Company") is a Norwegian company listed on the Oslo Stock temporarily shut-in in September 2019 and during 2020
Exchange. The Company was established in 2005 and has a several important project milestones were successfully
strategic focus on value creation through increased recovery reached, including the offshore decommissioning campaign.
of hydrocarbons, enabled by a competent organisation with In September 2020, the two jackets were delivered from the
a long-term view on reservoir management and the capability fabrication yard and safely installed on Tyra. Local
to invest in, and leverage new technology. governmental imposed restrictions at the fabrication yards
have impacted the schedule of the new Tyra topsides,
In July 2019, Noreco completed the acquisition of Shell´s including through the global supply chain delivering key
Danish upstream assets through the acquisition via a share components for the topsides. Subsequently the installation
purchase of Shell Olie- og Gasudvinding Danmark B.V. of the four new topsides was rescheduled from 2021 to a
(“SOGU”), which included ownership of the subsidiary Shell 2022 installation-window. The Tyra Redevelopment project is
Olie- og Gasudvinding Danmark Pipelines ApS (“SOGUP”), progressing towards first gas in Q2 2023.
and simultaneous transfer of the interest in the DUC from
SOGU to Noreco Oil Danmark A/S. As a result of the The annual revision of reserves resulted in total 2P reserves
Transaction, Noreco became the second largest oil and gas at year end 2020 of 201 mmboe, confirmed by an
producer in Denmark and a considerable E&P company. independent CPR assessment.
Noreco has a 36.8% non-operated interest in the Danish In December 2020, the Danish government announced the
Underground Consortium (“DUC”) with assets that comprise “2050 North Sea Agreement” ceasing oil and gas extraction
four hubs with 11 producing fields; Halfdan, Tyra, Gorm and by 2050. The agreement provides industry stability and
Dan. DUC is a joint venture between Total (43.2%), Noreco creates opportunities on the Danish Continental Shelf,
(36.8%) and Nordsøfonden (20.0%). DUC is operated by Total through and beyond the DUC concession which expires in
which has extensive offshore experience in the region and 2042.
worldwide.
CAPITAL STRUCTURE
BUSINESS DEVELOPMENT
Convertible bond (“NOR13”): a USD 171 million convertible
Noreco delivered strong production from the Halfdan, Dan bond with an eight-year tenor subscribed to by CQS, Kite
and Gorm hubs in 2020 with a yearly average of 28.5 mboepd Lake Capital Management, Taconic Capital Advisors and York
and an overall operational efficiency at approximately 82%. Capital Management. This instrument has a mandatory
The operational efficiency during the year was impacted by conversion to equity after five years and PIK interest with
the COVID-19 virus. The offshore manning successfully additional bonds at a coupon rate of 8.0 percent. Noreco may
returned to pre-Covid levels in end of October 2020. alternatively, at its own discretion, pay cash interest of 6.0
percent. Should the instrument be in place beyond the five-
Despite the challenging market environment in 2020 Noreco year conversion period, the interest rate on NOR13 will be
delivered a realised oil price of USD 66.8 per bbl, reduced to 0.0 percent for the remaining period.
demonstrating the strong contribution from Noreco’s hedge
portfolio. In addition, the Shell liquid protection agreement Reserve-based lending facility: a seven-year 1st lien
contributed with a total of USD 98 million in 2020.
senior-secured reserve-based lending facility (the “RBL
Facility”) with a total facility amount of USD 900 million and a
The Tyra Redevelopment is an ongoing project within the
letter of credit sub-limit of USD 100 million. At the end of
DUC and is the largest project ever that is carried out in the
2020, the RBL Facility USD 751 million was drawn, with an
Danish Continental Shelf (DCS). The project will provide a
additional USD 100 million letter of credit outstanding. The
strong foundation for future reserves growth, unlocking
facility will amortize from the second half of 2022 and interest

DIRECTORS’ REPORT CONT.
is charged on debt drawings based on the LIBOR rate and a intensity reduction and power from renewables that will
margin of 4.0 to 4.5 percent. support progression of the Company’s ESG strategy.
Subsequent to year end 2020 Noreco announced a fully Senior unsecured note (“NOR14”): a USD 175 million senior
underwritten USD 1.1 million RBL with a two-year extension of unsecured note with a coupon rate of 9.0 percent and a
maturity and amortizations. In addition, the Company has maturity of June 2026.
established a link in the RBL to ESG targets on emissions
GROUP FINANCIAL RESULTS FOR 2020
Selected data from consolidated statement of comprehensive income
2019*
All figures in USD million 2020
restated
Total revenue 566 333
EBITDA 250 127
EBIT 57 (251)
Result before tax (18) (199)
Net result for the period 17 215
Earnings per share 0.7 14.6
*
Figures reflects the contribution from the acquired DUC assets from 1 August 2019
Total revenues for 2020 amounted to USD 566 million, consultant fees related to the acquisition and USD 3 million
increased from USD 333 million the previous year. The related to offshore insurance cost. The offshore insurance
revenue is mainly related to oil and gas sales from the DUC cost for 2020 were included in production expenses.
fields. 2019 reflects the revenue from 1 August 2019.
Operating result (EBITDA) for 2020 was a profit of USD 250
Production expenses of USD 295 million in 2020 compared million, mainly from the DUC fields. Adjusted EBITDA, taking
to USD 171 million in 2019. Of this amount USD 277 million was into account any claims under the volume guarantee
directly attributable to the lifting and transport of the recognised as contingent consideration, was USD 358 million
Company’s oil and gas production. These production for the year, more details on the Alternative Performance
expenses include a positive impact of USD 3 million related Measures (APM) is included in the end of the report.
to crude oil inventory adjustment. The cost per boe in 2020
amounted to USD 26.6 per boe compared to USD 23.1 per Net financial items amounted to an expense of USD 75
boe the previous year. The increase is driven by the Tyra million in 2020, compared to an income of USD 52 million in
shut-in with increased transportation tariffs due to changed 2019. The increased financial expense is mainly driven by full
market terms, in addition to operational expenses from Tyra year interest expenses related to external debt, full year
without any production contribution accretion on asset retirement obligation, foreign exchange
loss related to working capital as a result of DKK
Personnel expenses were USD 12 million in 2020 compared strengthening, partly offset by fair value adjustment
to USD 16 million in 2019. The cost in 2019 includes USD 6 embedded derivatives and realized hedge income. The
million higher cost related to share-based payments. This is financial income in previous year were in addition influenced
partly offset by restructuring cost of USD 1 million in 2020. by a value increase related to the Shell liquid protection
agreement.
Other operating expenses amounted to USD 8 million in
2020, compared to USD 19 million last year. The other Income Tax for the Group amounted to a tax income of USD
operating expenses in 2019 includes USD 9 million in 35 million for the year, compared to USD 414 million in 2019.

The tax income for 2020 relates to the recognition of tax made to note 13 in the consolidated financial statements for
losses and investment uplift for the year. The tax income in further details to the taxes this period.
2019 relates the recognition of prior year’s deferred tax
losses in Denmark due to the expected increase in future The Group’s net result for the year is a profit of USD 17
profit from the acquisition of the DUC assets. Reference is million, compared to USD 215 million in 2019.
Selected data from the consolidated statement of financial position

2019
restated
Total non-current assets 2,533 2,413
Total current assets 429 523
Total assets 2,962 2,935
Total equity 630 589
Interest bearing debt 1,043 1,008
Asset retirement obligations 950 967
Total non-current assets amounted to USD 2,533 million at Interest-bearing debt amounted to USD 1,043 million at the
the end of 2020, of which USD 1,704 million related to end of 2020. The convertible bond loan NOR13 had a book
Property, Plant & Equipment, in addition to a deferred tax value of USD 131 million at the end of 2020. This is valued at
asset of USD 432 million, intangible asset of USD 175 million, amortised cost and the embedded derivatives are accounted
USD 196 million restricted cash and USD 26 million in for as a derivative liability at fair value through profit and loss.
derivatives. Noreco’s USD 900 million RBL facility was drawn USD 751
million and had a book value of USD 719 million at the end of
Total current assets amounted to USD 429 million at the 2020, which reflects an additional draw down of USD 6 million
end of 2020, USD 34 million in short term derivatives, USD in the current year. The senior unsecured bond loan NOR14
96 million in trade- and other receivables, of which USD 58 had a book value of USD 169 million at the end of 2020. The
million is related to trade receivables and accrued oil and gas RBL facility and the unsecured bond loan are valued at
revenue, USD 15 million is related to the liquid volume amortized cost. In addition, the interest-bearing debt
protection agreement with Shell and USD 23 million is related includes deferred consideration with a book value of USD 25
to offshore insurance premium that is paid in advance. In million at the end of 2020.
addition USD 259 million in cash and USD 40 million is related
to inventory. Asset retirement obligations amounted to USD 950 million
at the end of 2020, compared to USD 967 million at the end
Equity amounted to USD 630 million at the end of 2020, of 2019. USD 875 million is related to the DUC assets, USD 71
compared to USD 589 million at the end of 2019. The increase million to Nini/Cecilie, USD 2 million to Lulita and USD 2
in equity is mainly related to the fair value adjustment of million to the Tyra F-3 pipeline. Part of the asset retirement
derivative instruments and net result for the current year. obligation is secured through an escrow account of USD 71
million.

Selected data from the consolidated statement of cash flows
2019
restated
Cash flow from operating activities 348 249
Cash flow used in investing activities (285) (1,274)
Cash flow from financing activities (89) 1,309
Net change in cash and cash equivalents (26) 283
Cash and cash equivalents 259 286
Cash flow from operating activities amounted to USD 348 Noreco has to date executed this policy in the market
million at the end of 2020, compared to USD 249 million at through a combination of forward contracts and options.
the end of last year.
As a result of the agreement to acquire SOGU, Noreco had a
Cash flow used in investing activities amounted to USD liquid volume protection agreement with Shell that, from
285 million at the end of 2020 compared to USD 1,274 million signing of the Sale and Purchase Agreement (SPA) until the
at the end of last year. The cash flow used in investing end of 2020 (the “Protection Period”), provided a monthly
activities were related to investments to the DUC asset of liquid production guarantee at levels above the Company’s
USD 236 million, of which USD 221 million is linked to the Tyra current internal forecasts. To the extent that actual
redevelopment, USD 75 million deposit into a cash call production levels were below the pre-agreed level in the
security account, USD 72 million in tax payment for the period Protection Period, Noreco received a monthly cash payment
prior to closing, USD 2 million in investment on exploration from Shell. The fair value of the volume guarantee was
licenses and benefit received from the volume guarantee of recognised as a reduction in the acquisition purchase price.
USD 102 million. Any changes to the fair value were recognized through profit
and loss. For the period 2021 to 2023 (the “Recovery Period”),
Cash flow from financing activities amounted to negative a payment to Shell may be required if actual production
USD 89 million at the end of the year, compared to positive exceeds a pre-agreed level that is currently above the
USD 1 309 million in 2019. During 2020 USD 74 million in Company’s internal forecasts. The amount refunded to Shell
abandonment expenditure was paid, of which USD 70 million during the Recovery Period cannot exceed the value of
is related the Tyra redevelopment, USD 52 million received Noreco’s claims during the Protection Period.
from price hedging, USD 56 million in paid interest on the RBL
Facility and bond loan, USD 6 million in additional draw down As part of the acquisition of the DUC assets, Noreco agreed
on the RBL Facility and in addition Noreco bought back its to sell certain oil volumes (equivalent to 80% of the
own shares for USD 10 million. The positive cash flow from guaranteed production until the end of September 2020) to
financing activities last year were related to drawdown of Shell at fixed prices. The prices at which Shell would acquire
long-term loans and issue of new shares in relation to the these volumes were set on a monthly basis in line with the
acquisition of the DUC assets Brent forward curve when the SPA was signed in October
2018. As the level of oil Noreco has lifted from the DUC asset
Net change in cash and cash equivalents amounted to is below the original schedule agreed with Shell, volumes of
negative USD 26 million in 2020 compared to positive USD oil are still to be sold to Shell at the pre-agreed fixed prices;
283 million in 2019. Cash and cash equivalents were in total this overhang was extinguished during Q4 2020 and at the
USD 259 million at the end of 2020. end of the year Noreco had no remaining price hedges with
Shell.
RISK MITIGATION
Subsequent to closing of the transaction in August 2019,
The Company actively seeks to reduce the risk it is exposed Noreco entered into a combination of forward contracts and
to regarding fluctuating commodity prices through the options with financial institutions in the market to reduce the
establishment of hedging arrangements. Noreco applied Company’s exposure to commodity price volatility. These
hedge accounting from 1 October 2019. protect the minimum oil price Noreco will receive during 2021

and 2022. The hedging contracts with financial institutions periods of 70%. Due to the volatile oil market conditions in
are financially settled on a monthly basis. 2020, Noreco requested and received waivers from its RBL
bank syndicate in June and December relating to the
As part of the RBL Facility, Noreco has a rolling hedge hedging requirements in the 24 to 36 months forward; based
requirement based on a minimum level of production on this, the company is not required to meet the minimum
corresponding to the RBL banking case forecast: 50% of oil hedging level during this period until the end of June 2021. At
equivalent volumes for the following 12 months, 40% in the the end of 2020, Noreco is in full compliance with these
period from 12 to 24 months and 30% in the period from 24 to temporarily revised RBL hedging requirements.
36 months, subject to a maximum level in each of these
Liquids hedged Average

(mmboe) hedged price
2021 6.3 55.7
2022 4.3 55.7
THE GOING CONCERN ASSUMPTION incidents or similar on one location may affect a significant
part of Noreco’s business.
Pursuant to the Norwegian Accounting Act section 3-3a, the
board confirms that the requirements of the going concern Reserves risk
assumption are met and that the annual accounts have been The Company’s oil and gas production could vary
prepared on that basis. The financial solidity and the significantly from reported reserves and resources. Should
Company’s working capital and cash position are considered actual production deviate from estimated reserves, this may
satisfactory in regards of the planned activity level for the have a significant impact on the value of the Group’s assets,
next twelve months. the cash flow from operations and total revenues over the
lifetime of the assets. Material deviations between actual
Risk factors results and estimated reserves for one asset may also create
The risks and uncertainties described in this section are the uncertainties about the estimated reserves of other assets
material known risks and uncertainties faced by the Group as based on the same assumptions, which may in turn be
of the date hereof and represents those risk factors that the detrimental for investors’ confidence in Noreco’s reserves
Company believes to represent the most material risks for estimates.
investors. Accordingly, investors should carefully consider
these risks. Risks related to development projects
Noreco’s development projects and resource portfolio will
Risks related to the Company’s assets require substantial investments to bring into production. The
The Company’s future production of oil and gas is Company may be unable to obtain needed capital or
concentrated in a limited number of offshore fields that are financing on satisfactory terms, which could lead to a decline
located in a congregated geographical area. There are in its oil and gas reserves. The Company makes and expect
currently four production hubs which are interconnected and to continue to make substantial investments in its business
utilize the same infrastructure. In addition to this, the fields for the development and production of oil and natural gas
within one hub are interconnected and one field can depend reserves. The Company’s development projects may not be
on another for gas injection and other factors important to finalized within the projected budget or timeframe, or other
extract hydrocarbons. Gas produced on each of the hubs is unforeseen events may arise which affects the projects. The
normally processed and transported to shore via the Tyra Company intends to finance the majority of its future
hub. Due to the ongoing Tyra Redevelopment, gas is investments with cash flow from operations and borrowings
temporarily going to Dan and sent to the NOUGAT system in under its RBL Facility and other equity and debt facilities.
the Dutch sector. The Gorm hub receives liquids from all the
other hubs and sends it to shore via a pipeline on Gorm E. Decommissioning risks
Consequently, the concentration of fields, infrastructure and There are significant uncertainties relating to the cost for
other Noreco assets may result in that accidents, problems, decommissioning of licences including the schedule for

removal of any installation and performance of other Significant fluctuations in exchange rates between euros and
decommissioning activities. No assurance can be given that Danish kroner and US dollars and Danish kroner and Danish
any anticipated costs and time of removal will be correct and and Norwegian kroner may materially adversely affect the
any deviation from such estimates may have a material reported results.
adverse effect on the Company’s business, results of
operations, cash flow and financial condition. Risks related to Danish taxation and regulations
All of Noreco’s petroleum assets are located in Denmark and
Third party risk the petroleum industry is subject to higher taxation than
The Company is subject to third party risk in terms of other businesses. There is no assurance that future political
operators and partners as it does not have a majority interest conditions in Denmark will not result in the relevant
in any of its licences, and consequently cannot solely control government adopting different policies for petroleum
such assets. Although the Company has consultation rights taxation than currently in place. However, due to the
or the right to withhold consent in relation to significant Compensation Agreement in place between the Danish State
operational matters, depending inter alia on the importance and the DUC, any alterations in present legislation to the
of the matter, level of its interest in the licence, which licence, disadvantage of the DUC licensees would be compensated.
the contractual arrangements for the licence, etc, the The compensation would be determined with a view to the
Company will have limited control over management of such impact of the changes on the DUC but however cannot
assets and mismanagement by the operator or exceed the net advantage deemed to have been obtained by
disagreements with the operator as to the most appropriate the State. This agreement effectively reduces the risk
course of action may result in significant delays, losses or associated with Danish taxation and regulations and provides
increased costs to it. Jointly owned licences also result in for a high degree of influence for the DUC in the design and
possible joint liability, on certain terms and conditions. Other adoption of any amendments to the petroleum tax rules.
participants in licences may default on their obligations to
fund capital or other funding obligations in relation to the Risks related to debt financing
assets. In such circumstances, the Company may be required Noreco has exposure to both floating interest rates, through
under the terms of the relevant operating agreement or the Company’s USD 900 million RBL, and fixed interest rates,
otherwise to contribute all or part of such funding shortfall through the Company’s USD 171 million Convertible Bond and
ourselves. USD 175 million Senior Unsecured Note. Noreco does not
currently have any interest rate hedging in place and any rise
Risks related to commodity prices in interest rates may negatively impact the Company’s
The Company’s business, results of operations, cash flow and profitability and free cashflow generation. In addition, the
financial condition will depend significantly on the level of oil Company is subject under these financing instruments to
and gas prices and market expectations of these and may be several covenants, including maximum leverage relative to
adversely affected by volatile oil and gas prices. The earnings and demonstration of a minimum level of liquidity.
Company’s future revenues, cash flow, profitability and rate The Company’s material hedging programme provides
of growth depend substantially on prevailing international significant visibility over Noreco’s ability to meet these
and local prices of oil and gas. As oil and gas are globally requirements, however if the Company is unable to then
traded commodities, Noreco is unable to control or predict actions to rectify this position may be required. There can be
the prices it receives for the oil and gas it produces; however, no assurance that such actions will be available or enough to
the Company has a material hedging programme in place allow Noreco to ultimately fulfil its obligations.
that mitigates the short-term impact of price volatility. The
hydrocarbons produced from specific fields may have a Risks related to future capital requirements
premium/discount to benchmark prices such as Brent and Noreco’s future capital requirements will be determined
this may vary over time. based on several factors; including production levels,
commodity prices, future expenditures that are required to
Currency risks be funded and the development of the Company’s capital
The Group is exposed to market fluctuations in foreign structure. To the extent the Company’s operating cashflow
exchange rates. Revenues are in US dollars for oil and in Euros is insufficient to fund the business plan at the time, and in
and Danish kroner for gas, while operational costs, taxes and particular the Tyra redevelopment project, additional
investment are in several other currencies, including Danish external capital may be required. Noreco currently has a
kroner. The Company’s financing is primarily in US dollars. strong financial base, supported by existing liquidity and

hedging positions, however any unexpected changes that other authorizations and these may also be suspended,
result in lower revenues or increased costs may necessitate terminated or revoked prior to their expiration.
the raising of additional external capital. There can be no
guarantee that, if required, Noreco would be able to access Risks related to environmental regulations
the debt or equity markets on favourable terms, or if The Company may be subject to liability under environmental
necessary be able to adequately restructure or refinance its laws and regulations. All phases of the oil and gas business
debt. To mitigate this risk, Noreco maintains a strong present environmental risks and hazards and are subject to
relationship with its banking syndicate through continual environmental regulation pursuant to a variety of
engagement to underpin its borrowing position and has international conventions and state and municipal laws and
commenced an active investor relations strategy to support regulations. Environmental legislation provides for, among
access to the capital markets. other things, restrictions and prohibitions on spills, and
releases or emissions of various substances produced in
Financial reporting risk association with oil and gas operations. The legislation also
While Noreco has in place internal controls covering the requires that wells and facility sites are operated, maintained,
Company’s financial reporting function, any material error or abandoned and reclaimed to the satisfaction of applicable
omission could significantly impact the accuracy of our regulatory authorities. The Company is subject to legislation
reported financial performance and expose the Company to in relation to the emission of carbon dioxide, methane,
a risk of regulatory or other stakeholder action. nitrous oxide and other so-called greenhouse gases.
Compliance with such legislation can require significant
Insurance risk expenditures and a breach may result in the imposition of
Although the Company maintains liability insurance in an fines and penalties, some of which may be material, in
amount that it considers adequate and consistent with addition to loss of reputation.
industry standard, the nature of the risks inherent in oil and
gas industry generally, and on the Danish Continental Shelf Reputational risks
specifically, are such that liabilities could materially exceed Noreco may be negatively affected by adverse market
policy limits or not be insured at all, in which event the perception as it depends on a high level of integrity and to
Company could incur significant costs that could have maintain trust and confidence of investors, DUC participants,
adverse effect on its financial condition, results of operation public authorities and counterparties. Any mismanagement,
and cash flow. fraud or failure to satisfy fiduciary or regulatory
responsibilities, or negative publicity resulting from other
Political and regulatory risks activities, could materially affect the Company’s reputation,
The Company is exposed to political and regulatory risks. as well as its business, access to capital markets and
Exploration and development activities in Denmark are commercial flexibility.
dependent on receipt of government approvals and permits
to develop its assets. The Danish Subsoil Act, among other COVID-19
things, sets out different criteria for the organization, The global pandemic has severely impacted the daily lives of
competence and financial capability that a licensee at the people as well as affected companies and markets.
Danish Continental Shelf (DCS) must fulfil at all times. The Governments and other authorities have imposed
Company is qualified to conduct its operations on the DCS, restrictions which limits the prerequisites for continuing
however, there is no assurance that future political normal business operations, including movement of people
conditions in Denmark will not result in the government and their ability to get to their place of work. Noreco is well
adopting new or different policies and regulations on set up with IT infrastructure and routines which allow all staff
exploration, development, operation and ownership of oil to work remotely and as such are able to continue operating
and gas, environmental protection, and labour relations. In the Company. The Company, through its ownership in DUC,
December, the Danish government announced the “2050 relies on a significant number of operational staff and third-
North Sea Agreement” ceasing oil and gas extraction by party suppliers to maintain its operations at sufficient levels.
2050. The agreement provides industry stability and Total E&P Denmark A/S, as the operator of DUC, has
opportunities on the DCS, beyond the DUC concession which implemented extensive measures to protect personnel and
expires in 2042. Further, the Company may be unable to secure business continuity, including among others
obtain or renew required drilling rights, licences, permits and screening of offshore personnel by Total health staff. Local

governmental imposed restrictions at the fabrication yards promotion of a high level for health and safety offshore and
have impacted the schedule of the new Tyra topsides, for creating a framework enabling the companies to solve
including through the global supply chain delivering key offshore health and safety issues themselves. The Danish
components for the topsides. As a direct consequence of this Offshore Safety Act generally applies to all offshore activities
impact the installation of the four new topsides was related to hydrocarbon facilities, infrastructure and pipelines
rescheduled from 2021 to a 2022 installation-window. First connected hereto.
production from the redeveloped Tyra is as such expected in
Q2 2023. COVID-19 has affected global demand for oil and Licensees under the Danish Subsoil Act are required to
gas, which is affecting the price of these commodities – see identify, assess and reduce health and safety risks as much
note 2 to the consolidated financial statements. Given the as reasonably practicable, as well as be compliant with the
rapidly evolving landscape of the COVID-19 pandemic, where ALARP (As Low As Reasonably Practicable) principle.
information, impacts and even the regulatory environment Furthermore, the licensee shall ensure that operators are
can change in a matter of hours, it is challenging to estimate able to fulfil the safety and health obligations pursuant to the
the continued potential future impact of the COVID-19 to the Danish Offshore Safety Act.
Company’s performance and business.
The Tyra Redevelopment Project experienced a contractor
HEALTH, ENVIRONMENT AND SAFETY fatality on 24 November 2020 at the Semcorp Marine
construction yard in Singapore. Following an incident
Noreco puts emphasis on its employees performing investigation, the safety action plan has been enhanced
company activities in line with the principals of business including implementation of improved hazard marking
integrity and with respect for people and the environment. protocols
During 2020, Noreco was, through its ownership in the DUC PERSONNEL RESOURCES AND WORKING
in which Total E&P Denmark A/S is the operator, involved in ENVIRONMENT
production of oil and gas which could cause emissions to the
sea and air. At the end of 2020 the Group had 28 employees. 39 percent
of the employees were women.
Noreco will conduct its business operation in full compliance
with all applicable national legislation in the countries where At the end of 2020 the Company’s board of directors consists
it is operating. The Company is committed to carry out its of three women and five men, all elected by shareholders.
activities in a responsible manner to protect people and the There are no employee representatives on the Board. At the
environment. Our fundamentals of HSEQ and safe business end of 2020, approximately 40 per cent of the board
practice are an integral part of Noreco’s operations and members were women.
business performance.
Noreco strives to maintain a working environment with equal
The outbreak of the coronavirus (COVID-19) continues to opportunities for all based on qualifications, irrespective of
severely impact the daily lives of people and imposes gender, ethnicity, religion, sexual orientation or disability.
restrictions on movements of people and their ability to get The Company pays equal salaries and gives equal
to their normal place of work. Noreco’s business continuity compensation and opportunities for positions at the same
actions provide the Company with infrastructure and level, regardless of gender, ethnicity, religion or disabilities.
systems that allow all staff to work remotely and, as such, The management’s compensation is described in note 7 to
Noreco can fully continue operating the Company while the annual accounts.
safeguarding its employees.
Sick leave in the Group was 2 percent in 2020.
The Danish Offshore Safety Act is the legal framework for

RESEARCH AND DEVELOPMENT Further information on corporate governance and corporate

social responsibility can be found in other sections of this
Noreco invests in research and development to support and report or on the Company's web site,
further grow its E&P activities. The DUC has a partnership www.noreco.com/corporate-governance and
with DTU, (Technical University of Denmark) and has together www.noreco.com/csr .
established the Danish Hydrocarbon Research and OWNERSHIP
Technology Centre (the “DHRTC”). The DHRTC conducts
research to improve future production of oil and gas from the There are no restrictions on the transfer of shares in Noreco.
Danish North Sea. The Centre's research seeks to increase The Company currently has approximately 2,950
sustainability through improved cost efficiency and reduced shareholders, and 15.85% percent of the shares are held by
environmental impact. In 2020 the DUC contributed with Norwegian residents.
funding amounting to DKK 131 million to DHRTC. Current
ongoing work programme includes: NORWEGIAN ENERGY COMPANY ASA
• Improved recovery of hydrocarbons
• Produced water management (zero harmful In 2020, the parent company was a holding company, and the
discharge vision) operating expenses mainly consisted of shareholder costs,
• Operations and maintenance technology consultancy fees, legal fees and payroll expenses. For
• Extended well life comments on financial risk and market conditions and
• Robust & cost-effective abandonment for long- statement regarding going concern, please see other parts
term environmental protection. of this annual report. These comments are also valid for the
parent company.
CORPORATE GOVERNANCE
PARENT COMPANY FINANCIAL RESULTS FOR 2020
The board wishes to maintain an appropriate standard on
corporate governance and to fulfil the recommendations in
Personnel expenses were USD 7 million in 2020, decreased
the Norwegian Code of Practice for Corporate Governance.
from USD 13 million compared to 2019, mainly due to higher
costs relating to share based payments in previous year.
Corporate governance in Noreco is based on equal treatment
of all shareholders through the activity that the board and
Other operating expenses amounted to USD 4 million in
General Assembly practice. In total, 20 board meetings were
2020, compared to USD 12 million last year. The 2019
held in 2020, participation was 99%.
operating expenses were highly influenced by consulting
fees in relation to the transaction in Denmark.
Safeguarding the Company’s people, assets and financial
position were the board’s key priorities during 2020, a
The net operating result for 2020 was a loss of USD 9
challenging year following the outbreak of the COVID-19
million compared to a loss of USD 16 million in 2019.
pandemic. In parallel the board has continued working on
developing Noreco and how best to position the Company for
Net financial items amounted to an expense of USD 14
future value enhancing opportunities.
million in 2020, compared to an income of USD 28 million in
2019. The financial expense in 2020 was mainly related to
On 2 March 2020, an extraordinary general meeting was held
interest on bond loans, which is partly offset by interest
where Robert J. McGuire was appointed to the board. income from intercompany loans and foreign exchange gain
mainly related to bank accounts in DKK.
On 26 May 2020, the Annual General Meeting of the
Company was held in Oslo, all the matters on the agenda The Company’s net result for the year amounted to a loss of
were approved. USD 24 million compared to a gain of USD 12 million in 2019.

ALLOCATIONS oil prices. Noreco has a stable business, underpinned by the

Company’s position in the DUC and further supported by risk
The result for the year for Norwegian Energy Company ASA mitigations. Nonetheless, in the near term COVID-19 may
in 2020 was a loss of USD 24 million. The board proposes the continue to affect the sector and the Company’s activities.
following allocations: The Tyra Redevelopment is progressing and will significantly
enhance the Noreco’s base production after start-up. The
Allocated to other equity USD 24 million Company also expects direct field operating expenditure to
Total appropriation USD 24 million decrease significantly after Tyra is back on production. Our
intent to progress value-additive organic DUC investment
OUTLOOK projects also continues, and we will seek to sanction projects
as they are sufficiently matured. Noreco believes economic
The ongoing pandemic COVID-19 severely affected investments in these projects will help replace produced
companies and markets globally including the global demand reserves and provide strong financial returns benefiting the
for oil and gas which, during 2020, resulted in historically low Company’s shareholders.

Oslo
19 April 2021
Riulf Rustad Tone Kristin Omsted Yves-Louis Darricarrère Marianne Lie

Executive Chair Board Member Board Member Board Member
Colette Cohen Chris Bruijnzeels Robert J. McGuire David B.Cook

Board Member Board Member Board Member Chief Executive Officer
NORECO 2020 ANNUAL REPORT

Reporting of payments to
Governments
This report is prepared in accordance with the Norwegian Income tax
Accounting Act Section § 3-3 d) and Securities Trading Act § The income tax is calculated and paid on corporate level and
5-5 a). It states that companies engaged in activities within is therefore reported for the whole Company rather than
the extractive industries shall annually prepare and publish a license-by-license. The income tax payments in 2020 for
report containing information about their payments to Noreco Olie- og Gasudvinding Danmark B.V was USD 72.2
governments at country and project level. The Ministry of million. The income tax payments are related to tax
Finance has issued a regulation (F20.12.2013 nr 1682 – "the instalments for the income year 2019 pertaining to the period
regulation") stipulating that the reporting obligation only before Noreco’s acquisition of the DUC interest.
apply to reporting entities above a certain size and to
payments above certain threshold amounts. In addition, the OTHER INFORMATION REQUIRED TO BE REPORTED
regulation stipulates that the report shall include other In accordance with the regulation (F20.12.2013 nr 1682)
information than payments to governments, and it provides Noreco is also required to report on investments, operating
more detailed rules applicable to definitions, publication and income, production volumes and purchases of goods and
group reporting. services. All reported information is relating to Noreco’s
The management of Noreco has applied judgment in the activities within the extractive industries on the Danish
interpretation of the wording in the regulation with regards to Continental Shelf:
the specific type of payment to be included in this report, and • Total net investments amounted to USD 236 million, as
on what level it should be reported. When payments are specified in the cash flow analysis in the financial
required to be reported on a project-by-project basis, it is statements
reported on a field-by-field basis. Only gross amounts on
• Sales income (Petroleum revenues) in 2020 amounted to
operated licenses are to be reported, as all payments within
USD 558 million, as specified in Note 4 to the financial
the license performed by non-operators will normally be cash
statements
calls transferred to the operator and will as such not be pay-
ments to the government. All activities in Noreco within the • Total production in 2020 was 10.4 million barrels of oil
extractive industries are located on the Danish Continental equivalents, see Note 5 to the consolidated financial
Shelf and all are performed as non-operator. All the reported statements
payments below are to the Danish government.
• For information about purchases of goods and services,
reference is made to the Income Statement and the
related notes

Corporate Governance
Report 2020
Norwegian Energy Company ASA (“Noreco” or “the deviates from the Corporate Governance Code on the
Company") has made a strong commitment to ensure trust following points:
in the Group and to enhance value creation to
shareholders and society over time. The Company acts in (a) Item 4: The Board of Directors of the Company has been,
a responsible and prudent manner through efficient and is expected to be, provided with authorisations to
decision-making and communication between the acquire own shares and issue new shares. Not all of such
management, the board of directors (the “Board” or “Board authorisations have separate and specific purposes for each
of Directors”) and the shareholders of the Company authorisation as the purposes of the authorisations shall be
represented by the Annual General Meeting. The explained in the notices to the general meetings adopting the
Company's framework for corporate governance is authorisations.
intended to decrease business risk, maximise value and
utilise the Company's recourses in an efficient and (b) Item 11: Options have been and/or are expected to be
sustainable manner, to the benefit of shareholders, granted members of the Board of Directors in addition to
employees and society at large. management through the share option programme of the
Company, first implemented at a general meeting of 21
The Company will seek to comply with the Norwegian Code January 2016 and later extended and expanded.
of Practice for Corporate Governance (the "Corporate
Governance Code") which is available at the Norwegian (c) Item 14: Due to the unpredictable nature of a takeover
Corporate Governance Committee's website www.nues.no. situation, the Company has decided not to implement
The principal purpose of the Corporate Governance Code is detailed guidelines on take-over situations. In the event a
to ensure (i) that listed companies implement corporate takeover was to occur, the Board of Directors will consider
governance that clarifies the respective roles of the relevant recommendations in the Corporate Governance
shareholders, the Board of Directors and executive Code and whether the concrete situation entails that the
management more comprehensively than what is required by recommendations in the Corporate Governance Code can be
legislation and (ii) effective management and control over complied with or not.
activities with the aim of securing the greatest possible value
creation over time in the best interest of companies, 1. IMPLEMENTATION AND REPORTING ON CORPORATE
shareholders, employees and other parties concerned. GOVERNANCE
The Board of Noreco is responsible for compliance with
The Company will, from the time due to the listing of its corporate governance standards. Noreco is a Norwegian
shares on Oslo Børs, be subject to reporting requirements for public limited liability company (ASA), listed on the Oslo
corporate governance under the Accounting Act section 3- Stock Exchange and established under Norwegian laws. In
3b as well as Oslo Børs' "Continuing obligations of stock accordance with the Norwegian Accounting Act, section 3-
exchange listed companies" section 7. The Board of Directors 3b, Noreco includes a description of principles for corporate
will include a report on the Company's corporate governance governance as part of the Board of Directors’ Report in the
in each annual report, including an explanation of any annual report. The Company will seek to comply with the
deviations from the Corporate Governance Code. The Corporate Governance Code. The Board of Directors will
corporate governance framework of the Company is subject include a report on the Company's corporate governance in
to annual reviews and discussions by the Board of Directors. its annual report, including an explanation of any deviations
According to the Company's own evaluation, the Company from the Corporate Governance Code. The Company's

CORPORATE GOVERNANCE REPORT 2020 CONT.
strategy is to continue its value creation to replace and 3.3. Share capital increases and issuance of shares
maximise recovery of proven reserves and resources and to At the Annual General Meeting held on 26 May 2020, The
continue to explore new opportunities in and above the Board of Directors was authorised to increase the Company's
ground. share capital by up to NOK 24,549,014 until the Annual
General Meeting in 2021, but in no event later than 30 June
2. BUSINESS 2021.
The Company is an E&P company with a strategic focus on
value creation through increased recovery, enabled by a 3.4. Purchase of own shares
competent organisation with a long-term view on reservoir The Board of Directors of the Company has been authorised
management and the capability to invest and leverage new to acquire own shares with a total par value of NOK 7,194,730,
technology. valid until the Annual General Meeting in 2021, however in any
event no later than 30 June 2021. The authorisation can be
On an annual basis, the Board defines and evaluates the used in relation to incentive schemes for
Company’s objectives, main strategies and risk profiles for employees/directors of the group, as consideration in
the Company’s business activities to ensure that the connection with acquisition of businesses and/or for general
company creates value for shareholders. corporate purposes.
The Company integrates considerations related to its During 2020, the Company bought back 438,161 of its own
stakeholders into its value creation and shall achieve its shares, of which 299,925 shares was bought as part of a
objectives in accordance with the Company’s Code of reverse book building process and 138,236 shares was
Conduct bought in the market. The Company currently holds 438,161
of its own shares, approximately 1.78 percent.
The Company's business is defined in the following manner in
the Company's articles of association (the "Articles of 4. EQUAL TREATMENT OF SHAREHOLDERS AND
Association") section 3: TRANSACTIONS WITH RELATED PARTIES
The object of the Company is direct and indirect ownership 4.1. Class of shares
and participation in companies and enterprises within The Company has one class of shares. All shares carry equal
exploration, production, and sale related to oil and gas, and rights in the Company, and the Articles of Association do not
other activities related hereto. provide for any restrictions, or rights of first refusal, on
transfer of shares. Share transfers are not subject to approval
3. EQUITY AND DIVIDENDS by the Board of Directors.
3.1. Equity 4.2. Pre-emption rights to subscribe

As of 31 December 2020, the Company's consolidated equity According to the Norwegian Public Limited Liability
was USD 630 million, which is equivalent to approximately Companies Act section 10-4, the Company's shareholders
21% of total assets. The Company's equity level and financial have pre-emption rights in share offerings against cash
strength shall be considered in light of its objectives, strategy contribution. Such pre-emption rights may; however, be set
and risk profile. aside, either by the general meeting or by the Board of
Directors if the general meeting has granted a board
3.2. Dividend policy authorisation which allows for this. Any resolution to set aside
The Company has not paid any dividends to date, whether in pre-emption rights will be justified by the common interests
cash or in kind. of the Company and the shareholders, and such justification
will be publicly disclosed through a stock exchange notice
The Company does not expect to make dividend payments from the Company
prior to completion of the Tyra Redevelopment project. The
Company may revise its dividend policy from time to time. 4.3. Trading in own shares
The Company currently intends to retain all earnings, if any, The Board of Directors will aim to ensure that all transactions
and to use these to finance the further business of the pursuant to any share buy-back program will be carried out
Company.

either through the trading system at Oslo Børs or at prevailing sufficiently detailed and comprehensive to allow
prices at Oslo Børs. In the event of such program, the Board shareholders to form a view on all matters to be considered
of Directors will take the Company's and shareholders' at the meeting. The notice and support information, as well
interests into consideration and aim to maintain transparency as a proxy voting form, will normally be made available on the
and equal treatment of all shareholders. If there is limited Company's website www.noreco.com/general-meetings no
liquidity in the Company's shares, the Company shall later than 21 days prior to the date of the general meeting.
consider other ways to ensure equal treatment of all
shareholders. 6.2. Participation and execution
To the extent deemed appropriate or necessary by the Board
4.4. Transactions with close associates of Directors, the Board of Directors will seek to arrange for
The Board of Directors aims to ensure that any not immaterial the general meeting to vote separately on each candidate
future transactions between the Company and shareholders, nominated for election to the Company's corporate bodies.
a shareholder's parent company, members of the Board of
Directors, executive personnel or close associates of any The Board of Directors and the nomination committee shall,
such parties are entered into on arm's length terms. For any as a general rule, be present at general meetings. The auditor
such transactions which do not require approval by the will attend the ordinary general meeting and any
general meeting pursuant to the Norwegian Public Limited extraordinary general meetings to the extent required by the
Liability Companies Act, the Board of Directors will on a case- agenda items or other relevant circumstances. The Board of
by-case basis assess whether a fairness opinion from an Directors will seek to ensure that an independent chairman is
independent third party should be obtained. appointed by the general meeting if considered necessary
based on the agenda items or other relevant circumstances.
4.5 Guidelines for directors and executive
management The Company will aim to prepare and facilitate the use of
The Board of Directors has adopted rules of procedures for proxy forms which allows separate voting instructions to be
the Board of Directors which inter alia includes guidelines for given for each item on the agenda, and nominate a person
notification by members of the Board of Directors and who will be available to vote on behalf of shareholders as their
executive management if they have any material direct or proxy. The Board of Directors may decide that shareholders
indirect interest in any transaction entered into by the may submit their votes in writing, including by use of
Company. electronic communication, in a period prior to the general
meeting. The Board of Directors should seek to facilitate such
5. FREELY NEGOTIABLE SHARES advance voting.
The shares of the Company are freely transferable. There are
no restrictions on transferability of shares pursuant to the 7. NOMINATION-COMMITTEE
Articles of Association. The nomination committee is provided and governed by the
Articles of Association, in addition to instructions for the
6. GENERAL MEETINGS nomination committee. The nomination committee shall
The Board of Directors will make its best efforts with respect consist of three members who shall be shareholders or
to the timing and facilitation of general meetings to ensure shareholder representatives. The members shall be elected
that as many shareholders as possible may exercise their by the general meeting for a term of two years, unless the
rights by participating in general meetings, thereby making General Meeting determines that the term shall be shorter.
the general meeting an effective forum for the views of
shareholders and the Board of Directors. The members of the nomination committee should be
selected to take into account the interests of shareholders in
6.1. Notification general. The majority of the committee should be
The notice for a general meeting, with reference to or independent of the Board of Directors and the executive
attached support information on the resolutions to be personnel. At least one member of the nomination committee
considered at the General Meeting, shall as a principal rule be should not be a member of the board. No more than one
sent to shareholders no later than 21 days prior to the date of member of the nomination committee should be a member
the General Meeting. The Board of Directors will seek to of the Board of Directors, and any such member should not
ensure that the resolutions and supporting information are offer himself or herself for re-election to the board.

The nomination committee shall give its recommendation to board meetings. In addition, the annual report should identify
the general meeting on election of and compensation to which members are considered to be independent.
members of the Board of Directors, in addition to election of
and compensation to members of the nomination committee. 9. THE WORK OF THE BOARD OF DIRECTORS
The proposals shall be justified.
9.1. The rules of procedure for the board of directors
The Company should provide information on the The Board of Directors is responsible for the overall
membership of the committee and provide suitable management of the Company and shall supervise the
arrangements for shareholders to submit proposals to the Company's business and the Company's activities in general.
committee for candidates for election.
The Norwegian Public Limited Liability Companies Act
8. BOARD OF DIRECTORS: COMPOSITION AND regulates the duties and procedures of the Board of
INDEPENDENCE Directors. In addition, the Board of Directors has adopted
Pursuant to the Articles of Association section 5, the supplementary rules of procedures, which provides further
Company's Board of Directors shall consist of three to eight regulation on inter alia the duties of the Board of Directors
members, which are shareholders’ elected members in and the managing director, the division of work between the
accordance with a decision by the General Meeting. Board of Directors and the managing director, the annual
plan for the Board of Directors, notices of board proceedings,
The composition of the Board of Directors should ensure that administrative procedures, minutes, board committees,
the board can attend to the common interests of all transactions between the Company and the shareholders
shareholders and meet the Company's need for expertise, and matters of confidentiality.
capacity and diversity. Attention should be paid to ensuring
that the board can function effectively as a collegiate body. The board shall produce an annual plan for its work, with a
particular emphasis on objectives, strategy and
The composition of the Board of Directors should ensure that implementation. The managing director shall at least once a
it can operate independently of any special interests. The month, by attendance or in writing, inform the Board of
majority of the shareholder-elected members of the board Directors about the Company's activities, position and profit
should be independent of the Company's executive trend.
personnel and material business contacts. At least two of the
members of the Board elected by shareholders should be The Board of Directors' consideration of material matters in
independent of the Company's main shareholder(s), the which the chairman of the board is, or has been, personally
executive personnel and material business contacts. involved, shall be chaired by some other member of the
board.
The Board of Directors should not include executive
personnel, if the board does include executive personnel, the The Board of Directors shall evaluate its performance and
Company should provide an explanation for this and expertise annually and make the evaluation available to the
implement consequential adjustments to the organisation of nomination committee.
the work of the board, including the use of board committees
to help ensure more independent preparation of matters for 9.2. The audit committee
discussion by the board. The Company's audit committee is governed by the
Norwegian Public Limited Liability Companies Act and a
The Chairman of the Board of Directors should be elected by separate instruction adopted by the Board of Directors. The
the General Meeting. members of the audit committee are appointed by and
among the members of the Board of Directors. A majority of
The term of office for members of the Board of Directors the members shall be independent of the Company's
should not be longer than two years at a time. The board operations, and at least one member who is independent of
members can be elected for shorter term by the General the Company shall have qualifications within accounting or
Meeting. The annual report should provide information to auditing. Board members who are also members of the
illustrate the expertise of the members of the Board of executive management cannot be members of the audit
Directors, and information on their record of attendance at committee. The principal tasks of the audit committee are to:

a) prepare the Board of Directors' supervision of the The Company's management is responsible for establishing
Company's financial reporting process; and maintaining sufficient internal control over financial
reporting. Company specific policies, standards and
(b) monitor the systems for internal control and risk accounting principles have been developed for the annual
management; and quarterly financial reporting of the group. The managing
director and Chief Financial Officer supervise and oversee
(c) have continuous contact with the Company's auditor the external reporting and the internal reporting processes.
regarding the audit of the annual accounts; and This includes assessing financial reporting risks and internal
controls over financial reporting within the group. The
(d) review and monitor the independence of the Company's consolidated external financial statements are prepared in
auditor, including in particular the extent to which the accordance with International Financial Reporting Standards
auditing services provided by the auditor or the audit firm (IFRS) and International Accounting Standards as adopted by
represent a threat to the independence of the auditor. the EU.
9.3. The remuneration committee The Board of Directors shall ensure that the Company has
The compensation for the members of the Board of Directors sound internal control and systems for risk management,
for their service as directors is determined annually by the including compliance to the Company's corporate values,
shareholders of the Company at the annual general meetings ethical guidelines and guidelines for corporate social
of shareholders, on the basis of the motion from the responsibility. The Company's Code of Conduct describes
Nomination Committee. the Company's ethical commitments and requirements
related to business practice and personal conduct. If
The Board of Directors has established a guideline for salaries employees experience situations or matters that may be
and other remuneration to the managing director and other contrary to rules and regulations or the Company's Code of
senior executives valid until the Annual General Meeting in Conduct, they are urged to raise their concern with their
2020. The guideline was endorsed by the Annual General immediate superior or another manager in the Company. The
Meeting in May 2019. Company has established a whistle-blowing function that will
enable employees to alert the Company's governing bodies
The remuneration package for members of management about possible breaches of the Code of Conduct.
includes fixed and variable elements. The fixed element
consists of a base salary and other benefits, such as free The Board of Directors shall conduct an annual risk review in
mobile phone and life, accident and sickness insurance in order to identify real and potential risks and remedy any
accordance with normal practice in the oil industry. incidents that have occurred. The Board of Directors should
analyse the most important areas of exposure to risk and its
Variable elements of remuneration may be used, or other internal control arrangements and evaluate the Company's
special supplementary payment may be awarded other than performance and expertise. The Board of Directors shall
those mentioned above if this is considered appropriate. undertake a complete annual review of the risk situation, to
be carried out together with the review of the annual
Remuneration to the managing director will be evaluated accounts. The Board of Directors shall present an in-depth
regularly by the Board of Directors to ensure that salaries and report of the Company's financial statement in the annual
other benefits are kept, at all times, within the above report. The Audit Committee shall assist the Board of
guidelines and principles. Directors on an ongoing basis in monitoring the Company's
system for risk management and internal control. In
10. RISK MANAGEMENT AND INTERNAL CONTROL connection with the quarterly financial statements, the Audit
Risk management and internal control are given high priority Committee shall present to the Board of Directors reviews
by the Board of Directors, which shall ensure that adequate and information regarding the Company's current business
systems for risk management and internal control are in performance and risks.
place. The control system consists of interdependent areas
which include risk management, control environment, 11. REMUNERATION OF THE BOARD OF DIRECTORS
control activities, information and communication and The remuneration of the Board of Directors shall be decided
monitoring. by the Company's General Meeting of shareholders, and

should reflect the Board of Directors' responsibility, Furthermore, the Company aims to ensure that such
expertise, time commitment and the complexity of the arrangements are based on quantifiable factors that the
Company's activities. The remuneration should not be linked employee in question can influence.
to the Company‘s performance.
13. INFORMATION AND COMMUNICATIONS
The nomination committee shall give a recommendation as
to the size of the remuneration to the Board of Directors. 13.1. General
Pursuant to the instructions for the nomination committee, The Board of Directors has adopted a separate manual on
the recommendation should normally be published on the disclosure of information, which sets forth the Company's
Company's website at least 21 days prior to the General disclosure obligations and procedures. The Board of
Meeting that will decide on the remuneration. Directors will seek to ensure that market participants receive
correct, clear, relevant and up-to-date information in a timely
The annual report shall provide details of all elements of the manner, taking into account the requirement for equal
remuneration and benefits of each member of the Board of treatment of all participants in the securities market.
Directors, which includes a specification of any remuneration The Company will each year publish a financial calendar,
in addition to normal fees to the members of the Board. providing an overview of the dates for major events such as
its ordinary general meeting and publication of interim
Members of the Board of Directors and/or companies with reports.
which they are associated should not take on specific
assignments for the Company in addition to their 13.2. Information to shareholders
appointment as a member of the board. If they do The Company shall have procedures for establishing
nonetheless take on such assignments this should be discussions with important shareholders to enable the board
disclosed to the full board. The remuneration for such to develop a balanced understanding of the circumstances
additional duties should be approved by the Board of and focus of such shareholders. Such discussions shall be
Directors. done in compliance with the provisions of applicable laws and
regulations.
12. REMUNERATION OF THE EXECUTIVE
MANAGEMENT All information distributed to the Company's shareholders
The Board of Directors will in accordance with the Norwegian will be published on the Company's website at the latest at
Public Limited Liability Companies Act prepare separate the same time as it is sent to shareholders.
guidelines for the stipulation of salary and other
remuneration to key management personnel. The guidelines 14. TAKEOVERS
shall include the main principles applied in determining the In the event the Company becomes the subject of a takeover
salary and other remuneration of the executive management bid, the Board of Directors shall seek to ensure that the
and shall ensure convergence of the financial interests of the Company's shareholders are treated equally and that the
executive management and the shareholders. It should be Company's activities are not unnecessarily interrupted. The
clear which aspects of the guidelines that are advisory and Board of Directors shall also ensure that the shareholders
which, if any, that are binding thereby enabling the general have sufficient information and time to assess the offer.
meeting to vote separately on each of these aspects of the
guidelines. The guidelines will be made available to and shall There are no defence mechanisms against takeover bids in
be dealt with by the ordinary general meeting in accordance the Company's Articles of Association, nor have other
with the Norwegian Public Limited Liability Companies Act. measures been implemented to specifically hinder
acquisitions of shares in the Company. The Board of
The Board of Directors aims to ensure that performance- Directors has not established written guiding principles for
related remuneration of the executive management in the how it will act in the event of a takeover bid, as such situations
form of share options, annual bonus programs or the like, if are normally characterized by concrete and one-off
used, are linked to value creation for shareholders or the situations which make a guideline challenging to prepare. In
Company's earnings performance over time. Performance- the event a takeover were to occur, the Board of Directors
related remuneration should be subject to an absolute limit. will consider the relevant recommendations in the Corporate

Governance Code and whether the concrete situation entails auditor shall be held each year in which no member of the
that the recommendations in the Corporate Governance executive management is present.
Code can be complied with or not.
The Board of Directors' audit committee shall review and
15. AUDITOR monitor the independence of the Company's auditor,
The Board of Directors will require the Company's auditor to including in particular the extent to which services other than
annually present to the audit committee a review of the auditing provided by the auditor or the audit firm represents
Company's internal control procedures, including identified a threat to the independence of the auditor.
weaknesses and proposals for improvement, as well as the
main features of the plan for the audit of the Company. The remuneration to the auditor for statutory audit will be
approved by the ordinary general meeting. The Board of
Furthermore, the Board of Directors will require the auditor Directors should report to the general meeting on details of
to participate in meetings of the Board of Directors that deal fees for audit work and any fees for other specific
with the annual accounts at least one board meeting with the assignments.

Corporate Social
Responsibility
1. INTRODUCTION Continuous improvement is emphasized, and priority shall be
Norwegian Energy Company ASA (the “Company” and given to areas where the need for improvement and the
including its subsidiaries, the “Group”) defines corporate potential for making an impact are greatest.
social responsibility (“CSR”) as achieving commercial
profitability in a way that is consistent with fundamental 3.1. Professional and ethical standards
ethical values and with respect for people, the environment It is the Group’s policy to maintain the highest level of
and society. professional and ethical standards in the conduct of its
business affairs. The Group places the highest importance
The Group shall respect human and labour rights, establish upon its reputation for honesty, integrity and high ethical
good HSE (health, safety and the environment) standards, standards. These standards can only be attained and
facilitate good dialogue with stakeholders and generally maintained through the actions and conduct of all personnel
operate in accordance with applicable regulatory in the Group. It is the obligation of the Group’s employees to
frameworks and good business practice. conduct themselves in a manner to ensure the maintenance
of these standards. Such actions and conduct will be
At the core of the Company’s CSR policy is the group’s five important factors in evaluating an employee’s judgment and
corporate values: collaborative, responsible, ambitious, competence, and an important element in the evaluation of
vigorous and entrepreneurial. The values define who we are, an employee for promotion. Correspondingly, insensitivity to
how we act and what employees of the Company and Group or disregard for the principles of the Group’s professional and
stand for. ethical standards will be grounds for appropriate disciplinary
actions.
Each Group company has an independent responsibility for
exercising corporate social responsibility in accordance with The Group’s ethical and professional standard are further
the Group’s principles, but is free to design its own additional detailed in the Group’s compliance manuals.
activities and instruments. In addition, each Group company
has developed, adopted and is operating according to a 3.2. Compliance with local culture and regulations
Compliance Manual that provides detailed information and a In promoting the Group’s principles for good business
series of policies regarding the professional and ethical operations, we shall always respect local values and norms,
standards and compliance requirements of all Group and achieve success by bridging the divide between different
companies. cultures. Group companies shall always comply with local
regulatory requirements in the countries in which we
2. PURPOSE operate.
The purpose of this policy is to define clear areas of focus for
the Company’s approach to CSR and clarify the 3.3. Respect for human and labour rights
responsibilities and expectations with regard to the Group companies are committed to respecting fundamental
Company’s stakeholders. human and labour rights, both in our own operations and in
our relations with business partners. Our employees shall be
3. MAIN CSR PRINCIPLES treated with respect and given orderly working conditions.
The Company has identified seven main CSR topics. The The Group companies shall work continuously with issues
Group’s general approach to these topics is described below. such as non-discrimination, the right to privacy, the right to

CORPORATE SOCIAL RESPONSIBILITY CONT.
collective bargaining, employment contracts and protection The Danish Offshore Safety Act is the legal framework for
against harassment. Forced labour, child labour and all forms promotion of a high level for health and safety offshore and
of discrimination are strictly forbidden. for creating a framework enabling the companies to solve
offshore health and safety issues themselves. The Danish
3.4. Equal opportunities Offshore Safety Act generally applies to all offshore activities
It is the Group’s position that equal treatment of all related to hydrocarbon facilities, infrastructure and pipelines
employees is applied, and that different treatment or connected hereto.
discrimination based on a person’s gender, race, colour, Licensees under the Danish Subsoil Act are required to
national origin, age, religion, sexual orientation or any other identify, assess and reduce health and safety risks as much
characteristic protected by applicable law is unacceptable. as reasonably practicable, as well as be compliant with the
Furthermore, the Group is committed to equal opportunity ALARP (As Low As Reasonably Practicable) principle.
for all qualified employees and job applicants. All Furthermore, the licensee shall ensure that operators are
employment decisions (such as hiring, discipline, able to fulfil the safety and health obligations pursuant to the
terminations, promotions and job assignments) are to be Danish Offshore Safety Act. The Tyra Redevelopment Project
based on the Group’s needs and an employee’s performance experienced a contractor fatality on 24 November 2020 at
and potential. At the end of 2020 the Group had 28 the Semcorp Marine construction yard in Singapore.
employees. 39 percent of the employees were women. Following an incident investigation, the safety action plan has
been enhanced including implementation of improved
At the end of 2020 the Company’s board of directors consists hazard marking protocols
of three women and five men, all elected by shareholders,
hence approximately 40 per cent of the board members were 3.7. Environmental issues
women. The Group’s business in the oil and gas market has an
environmental impact. All phases of the oil business present
3.5. Anti-corruption and bribery environmental risks and hazards and are subject to strict
The Group has zero tolerance regarding corruption and environmental regulation pursuant to a variety of
bribery. Corruption undermines all sorts of business activities international conventions and state and municipal laws and
and free competition, and it is prohibited by law in all the regulations. All activities are subject to the receipt of
countries in which we operate. Corruption is destructive for necessary approvals or licences. The Group aims to protect
the countries involved and would erode our reputation, the environment to the greatest extent possible, both in its
exposing the Group and the individual employee to own operations, and through the Group’s partnership in the
considerable risk. The Company expects that local DUC. In 2020 Noreco further enhanced its work towards
management of each Group subsidiary promotes a strong identifying tangible solutions that will improve the long-term
anti-corruption culture. Each company shall make active position of oil and gas as a key part of the global energy mix.
efforts to prevent undesirable conduct and ensure that their Through cooperation with external experts and development
employees are capable of dealing with difficult situations. of internal specialised competencies, the Company aims to
develop sustainable solutions that will reduce greenhouse
3.6. Health, safety and the working environment gas emissions on the Danish Continental Shelf. For further
A healthy work environment contributes to a better health, information on the Company’s environmental approach,
greater engagement and increased job satisfaction. The goal please see the Sustainability section of the Annual Report.
is to create a safe and healthy work environment that
contributes to motivated and committed employees, which 4. WHISTLEBLOWING
ultimately is important for the Group’s continued success. It is important that someone who discovers wrongdoing and
This requires continuous effort and is a natural part of the non-compliance with the Company’s CSR policy and other
Group’s daily operations. The Group has no records of work- policies is able to report it without risk of retaliation or
related accidents or injuries of its employees in 2020. discrimination. The Company established a Whistleblowing
Procedure in 2019 which purpose is to encourage everyone
During 2020, Noreco was, through its ownership in the DUC to raise concerns about matters occurring within or related
in which Total E&P Denmark A/S is the operator, involved in to the Group so that the problem can be resolved promptly
production of oil and gas on the Danish Continental Shelf. and efficiently using internal company resources, rather than

CORPORATE SOCIAL RESPONSIBILITY CONT.
overlooking a problem or seeking a resolution of the problem 5. ROLES AND RESPONSIBILITIES

outside the Company which may delay the elimination of the The Group’s CSR policy is adopted by the Company's board
problem and cause harm to the Group and its employees.The of directors and shall be evaluated at least every second year.
Whistleblowing Procedure applies to all officers, directors
and employees of the Company, whether temporary or The managing director of the Company is responsible for
permanent, full-time or part-time, and regardless of their ensuring the follow up of and compliance with the content of
location. the policy.
Anyone doing business for or on the Company’s behalf, All Group subsidiaries are responsible for the day-to-day
including the Company’s advisors, agents, consultants, practice of this policy.
contractors, distributors, lawyers, partners, sales
representatives, suppliers and other third parties with whom The Company’s Corporate Social Responsibility Guidelines
the Company enters into a joint venture, partnership, can be found on The Company’s web site,
investment, teaming arrangement or other business www.noreco.com/csr
combination must comply with the Group’s Whistleblowing
Policy. Further details of the Whistleblowing Policy can be
found in the Group’s compliance manuals.

NORWEGIAN ENERGY COMPANY ASA (PARENT COMPANY)
Statutory Accounts 2020
60 Income Statement
61 Balance Sheet
63 Cash Flow Statement
Notes
64 Note 1: Accounting Principles
66 Note 2: Revenue
66 Note 3: Investments in Subsidiaries
67 Note 4: Restricted Bank Deposits
67 Note 5: Borrowings
69 Note 6: Trade Payables and Other Current Liabilities
69 Note 7: Guarantees
70 Note 8: Shareholders’ Equity
70 Note 9: Share Capital and Shareholder Information
72 Note 10: Share-based Compensation
72 Note 11: Payroll Expenses, Number of Employees, Remuneration etc.
73 Note 12: Write-down of Financial Assets
73 Note 13: Tax
74 Note 14: Other Operating Expenses and Audit Fees
74 Note 15: Related Party Transactions

Income Statement for Norwegian Energy Company ASA
(Parent company) for the year ended 31 December
USD million Note 2020 2019

Revenue 2, 15 2 9
Total revenues 2 9
Personnel expenses 11, 15 (7) (13)

Other operating expenses 14, 15 (4) (12)
Total operating expenses (11) (25)
Operating result before depreciation and write-downs (EBITDA) (9) (16)
Depreciation (0) (0)

Net operating result (EBIT) (9) (16)
Reversal of financial assets 12 - 33

Interests received from group companies 11 10
Interest income 1 1
Gain on repurchase of bonds - 1
Foreign exchange gains 11 16
Other financial income 0 1
Total financial income 22 61
Interest expense from bond loans (31) (10)
Interest expenses current liabilities (0) (0)
Interest expenses to group companies (1) (1)
Loss on repurchase of bonds - (1)
Foreign exchange losses (3) (20)
Impairment of financial assets 12 (1) -
Other financial expenses (1) (2)
Total financial expenses (37) (33)
Net financial items (14) 28
Result before tax (EBT) (24) 12

Tax 13 - -
Net result for the year (24) 12
Appropriation:
Allocated to/(from) other equity (24) 12
Total appropriation (24) 12

Balance sheet for Norwegian Energy Company ASA
USD million Note 31.12.20 31.12.19

ASSETS
Non-current assets
Financial non-current assets
Investment in subsidiaries 3 393 393
Loan to group companies 12 156 127
Restricted cash 4 71 65
Total non-current assets 620 584
Current assets
Receivables
Trade receivables 0 -
Receivables from group companies 20 27
Other current receivables 0 1
Total current receivables 20 28
Financial current assets
Bank deposits, cash and cash equivalents 183 228
Total financial current assets 183 228
Total assets 822 840
EQUITY AND LIABILITIES
Equity
Paid-in equity
Share capital 30 30
Share premium fund 707 707
Treasury share reserve (0) -
Total paid-in capital 736 737
Retained earnings
Other equity (286) (254)
Total retained earnings (286) (254)
Total equity 8, 9 450 482
Non-current Liabilities
Convertible bond loan 5 174 160
Bond loan 5 169 168
Loan from group companies 26 24
Other non-current liabilities - (0)
Total non-current liabilities 369 352
Current liabilities
Bond loan - -
Other interest-bearing debt - -
Trade payables 6 0 3
Debt from group companies - -
Other current liabilities 6 3 3
Total current liabilities 3 6
Total liabilities 372 358
Total equity and liabilities 822 840

Balance sheet for Norwegian Energy Company ASA
Oslo
19 April 2021



Cash Flow for Norwegian Energy Company ASA

Net result for the period (24) 12
Adjustments for:
Depreciation 0 0
Write-down 12 1 (33)
Share-based payments expenses 8 2 8
Net financial cost/(income) 14 5
Changes in:
Trade receivable (1) (15)
Trade payables 0 0
Other current balance sheet items 0 (1)
Net cash flow from operations (8) (25)
Cash flows from investing activities

Loans to group companies (11) (73)
Acquisition of subsidiary 3 - (351)
Net cash flow from investing activities (11) (423)
Cash flows from financing activities

Drawdowns long-term loans 5 - 333
Repayment short-term loans 5 - (54)
Share buyback 8 (10) -
Issue of new shares 8 - 390
Transaction cost related to financing (0) (12)
Transaction cost related to equity issue 8 (0) (4)
Payment of loans from group companies - 24
Repurchase/(sale) own bonds - 0
Interest paid (16) (1)
Net cash flow from (used) in financing activities (27) 675

Cash and cash equivalents at the beginning of the period 228 1
Cash and cash equivalents at end of the year 183 228

Notes
1 ACCOUNTING PRINCIPLES
Norwegian Energy Company ASA is a public limited liability Revenues

company registered in Norway, with headquarters in Oslo Income from sale of services are recognised at fair value of
(Nedre Vollgate 1, 0158 Oslo). the consideration, net after deduction of VAT. Services are
recognised in proportion to the work performed.
The annual accounts for Norwegian Energy Company ASA
(“Noreco” or the "Company”) have been prepared in Classification of balance sheet items
compliance with the Norwegian Accounting Act Assets intended for long term ownership or use have been
(“Accounting Act”) and accounting principles generally classified as fixed assets. Receivables are classified as
accepted in Norway (“NGAAP”) as of 31 December 2020. current assets if they are to be repaid within one year after
the transaction date. Similar criteria apply to liabilities. First
The Company is listed on the Oslo Stock Exchange under the year’s instalment on non-current liabilities and non-current
ticker “NOR”. The financial statements for 2020 were receivables are classified as current liabilities and assets.
approved by the board of directors on 19 April 2021 to be
approved by the Annual General Meeting on 19 May 2021. For interest bearing debt where the company is required to
be in compliance with financial covenants, the loans are
Going concern classified as current liabilities if Noreco is in breach with the
The board of directors confirm that the financial statements covenants to that extent that the loan would be payable on
have been prepared under the presumption of going the demand of the creditor. If a waiver is agreed with the
concern, and that this is the basis for the preparation of these creditor prior to approval of these financial statements, the
financial statements. The financial solidity and the company’s classification is carried forward in accordance with the
working capital and cash position are considered satisfactory payment schedule of the initial borrowing agreement.
in regards of the planned activity level for the next twelve
months. Investments in subsidiaries
For investments in subsidiaries, the cost method is applied.
Basis of preparation The cost price is increased when funds are added through
The financial statements are prepared on the historical cost capital increases or when group contributions are made to
basis. The subtotals and totals in some of the tables may not subsidiaries. Dividends received are initially taken as income.
equal the sum of the amounts shown due to rounding. Dividends exceeding the portion of retained profit after the
acquisition are reflected as a reduction in cost price.
Use of estimates
The preparation of financial statements in compliance with Dividend/group contribution from subsidiaries are reflected
the Accounting Act requires the use of estimates. The in the same year as the subsidiary makes a provision for the
application of the company’s accounting principles also amount.
require management to apply judgment. Areas, which to a
great extent contain such judgments, a high degree of Asset impairments
complexity, or areas in which assumptions and estimates are Impairment tests are carried out if there is indication that the
significant for the financial statements, are described in the carrying amount of an asset exceeds the estimated
notes.

recoverable amount. The test is performed on the lowest Other liabilities
level of fixed assets at which independent cash flows can be Liabilities, with the exception of certain liability provisions,
identified. If the carrying amount is higher than both the fair are recognised in the balance sheet at nominal amount.
value less cost to sell and recoverable amount (net present
value of future use/ownership), the asset is written down to Taxes
the highest of fair value less cost of disposal and the The tax in the income statement includes payable taxes for
recoverable amount. the period, refundable tax and changes in deferred
Previous impairment charges are reversed in later periods if tax. Deferred tax is calculated at relevant tax rates on the
the conditions causing the write-down are no longer present. basis of the temporary differences which exist between
accounting and tax values, and any carry forward losses for
Debtors tax purposes at the year-end. Tax enhancing or tax reducing
Trade debtors are recognised in the balance sheet after temporary differences, which are reversed or may be
provision for bad debts. The bad debt provision is made on reversed in the same period, have been eliminated. Deferred
basis of an individual assessment of each debtor. Significant tax and tax benefits which may be shown in the balance sheet
financial problems at the customers, the likelihood that the are presented net. Deferred tax benefits on net tax reducing
customer will become bankrupt or experience financial differences which have not been eliminated, and carry
restructuring and postponements and insufficient payments, forward losses, is not presented in the balance sheet due to
are considered indicators that the debtors should be written uncertainty about future earnings.
down.
Tax reduction on group contributions given and tax on group
Other debtors, both current and non-current, are recognised contribution received, recorded as a reduction of cost price
at the lower of nominal and net realisable value. Net realisable or taken directly to equity, are recorded directly against tax
value is the present value of estimated future payments. in the balance sheet (offset against payable taxes if the group
When the effect of a write-down is insignificant for contribution has affected payable taxes, and offset against
accounting purposes this is, however, not carried out. deferred taxes if the group contribution has affected
Provisions for bad debts are valued the same way as for trade deferred taxes).
debtors.
Deferred tax is reflected at nominal value.
Foreign currencies
The functional currency and the presentation currency of the Cash flow statement
company is US dollars (USD). The cash flow statement has been prepared according to the
indirect method. Cash and cash equivalents include cash,
Assets and liabilities in foreign currencies are valued at the bank deposits, and other current investments which
exchange rate on the balance sheet date. Exchange gains immediately and with minimal exchange risk can be
and losses relating to sales and purchases in foreign converted into known cash amounts, with due date less than
currencies are recognised as other financial income and three months from purchase date.
other financial expenses.
Share-based payments
Bonds and other debt to financial institutions The Company operates a number of equity-settled, share-
Interest-bearing loans and borrowings are initially recognised based compensation plans, under which the entity receives
at fair value, net of transaction costs incurred. The services from employees as consideration for equity
subsequent measurement is measured at amortised cost instruments (options) of the Company. The fair value of the
using the effective interest method. Gains and losses arising employee services received in exchange for the grant of the
on the repurchase, settlement or cancellation of liabilities are options is recognised as an expense. The total amount to be
recognised either in interest income and other financial items expensed is determined by reference to the fair value of the
or in interest and other finance expenses within Net financial options granted:
items. Financial liabilities are presented as current if the Fair value:
liabilities are due to be settled within 12 months after the • Including any market performance conditions
balance sheet date, or if they are held for the purpose of • Excludes the impact of any service and non-market
being traded.

performance vesting conditions (for example, profitability, non-market vesting conditions. It recognises the impact of
sales growth targets and remaining an employee of the entity the revision to original estimates, if any, in the income
over a specified time period). statement, with a corresponding adjustment to equity. When
the options are exercised, the Company issues new shares.
Non-market performance and service conditions are The proceeds received net of any directly attributable
included in assumptions about the number of options that are transaction costs are credited to share capital (nominal
expected to vest. The total expense is recognised over the value) and share premium. The social security contributions
vesting period (which is the period over which all of the payable in connection with the grant of the share options is
specified vesting conditions are to be satisfied). At the end of considered an integral part of the grant itself, and the charge
each reporting period, the Group revises its estimates of the will be treated as a cash-settled transaction.
number of options that are expected to vest based on the
2 REVENUE
USD million 2020 2019

Service fee subsidiaries 2 9
Total Revenue 2 9
3 INVESTMENTS IN SUBSIDARIES
Investments in subsidiaries are booked according to the cost method.
USD million Ownership/ Equity 31 Net Book

Subsidiaries Location voting right December Loss value
Altinex AS Oslo 100% 266 (53) 393

Norwegian Energy Company UK Ltd Great Britain 100% (1) (0) -
Djerv Energi AS Oslo 100% 0 (0) -
Book value 31.12.20 393
The impairment test as of 31.12.2020 justifies the overall value of subsidiaries in Altinex. The intercompany receivables to the
UK investment are impaired to zero.

4 RESTRICTED BANK DEPOSITS

Restricted cash pledged as security for abandonment obligation related to Nini/ Cecilie1) 71 65
Other restricted cash and bank deposits 0 0
Total restricted bank deposits 71 65
1)
In connection to the asset retirement obligation of USD 71 million (DKK 432 million) in the subsidiary Noreco Oil Denmark.
5 BORROWINGS
5.1 SUMMARY OF BORROWINGS
USD million
Non-Current Debt 2020 2019
NOR 13 Convertible Bond 174 160
NOR 14 Senior Unsecured Bond 169 168
Total non-current debt 343 327
Total borrowings 343 327
Details on borrowings outstanding on 31 December 2020
NOR13
In July 2019, Noreco issued a subordinated convertible bond loan of USD 158 million with a tenor of eight years. In the first
five years after issue of this instrument, the lender has been granted a right to convert the loan into new shares in the
Company at a conversion price of NOK 240 per share by way of set-off against the claim on the Company. At the end of this
five year period, if the lenders have not exercised their conversion option, the loan has a mandatory conversion to equity
based on the volume weighted average share price of Noreco in the 20 days prior to the execution of this mandatory
conversion. NOR13 carries an interest of 8,0% p.a. on a PIK basis, with an alternative option to pay cash interest at 6,0% p.a.,
payable semi-annually. Should the instrument be in place beyond the five-year conversion period, the interest rate on NOR13
will be reduced to 0,0 percent for the remaining term of the loan.

NOR14
In December 2019 the Company issued a senior unsecured bond of USD 175 million. The proceeds are utilised for general
corporate purposes and the bond carries an interest of 9,0% p.a., payable semi-annually, with a six and a half-year tenor.
5.2 COVENANTS
NOR14
The USD 175 million unsecured bond has two financial covenants included within the terms of the agreement that apply
outside the Tyra redevelopment period: a minimum liquidity covenant requirement of USD 25 million unrestricted cash, bank
deposits and cash equivalents and a maximum leverage ratio of net debt to EBITDAX (earnings before interest, tax,
depreciation, amortisation and exploration) of 3.0:1.0. During the Tyra redevelopment period, defined as from June 2021
until the earlier of (1) two quarters post completion of the Tyra redevelopment project and (2) June 2023, Noreco must
maintain a minimum liquidity position of USD 50 million and a maximum leverage ratio of 5.0x. The covenants are tested on a
group basis.
5.3 PAYMENT STRUCTURE
Principle NOR14 Total

2026 168 168
Total 168 168
Interest NOR13 NOR14 Total

Interest rate - 9.00%
2021 - 16 16
2022 - 16 16
2023 - 16 16
2024 - 16 16
2025 - 16 16
2026 - 8 8
Total - 87 87
5.4 PLEDGED ASSETS
Pledged assets relate to the carrying value of the pledged shares under the reserve based lending facility entered into by the
wholly-owned subsidiary Altinex AS, please see note 23 in the Consolidated Financial Statement.

6 TRADE PAYABLES AND OTHER CURRENT LIABILITIES

Trade payable 0 3
Accrued interest 0 0
Salary accruals 0 0
Public duties payable 1 0
Other current liabilities 1 2
Total Trade Payables and other current liabilities 3 6
7 GUARANTEES
OVERVIEW OF ISSUED GUARANTEES ON 31 DECEMBER 2020.
The parent company of the Group, Norwegian Energy Company ASA ("Noreco") has issued a parent company guarantee on
behalf of its subsidiary Norwegian Energy Company UK Ltd and Noreco Oil (UK) Limited. Noreco guarantees that, if any sums
become payable by Norwegian Energy Company UK Ltd or by Noreco Oil (UK) Limited to the UK Secretary of State under the
terms of the licence and the company does not repay those sums on first demand, Noreco shall pay to the UK Secretary of
State on demand an amount equal to all such sums. Department for Business, Energy & lndustrial Strategy, declined at this
time to withdraw Noreco Oil (UK)’s s29 notice with respect to the Huntington platform and pipeline. Under the forfeiture
agreement Premier assumes this risk as between Premier and Noreco so, while this contingent liability to the Secretary of
State would need to be recognised in any future sale of the company, Noreco Oil (UK) Limited does have recourse against
Premier if it defaults in its performance.
On 6 December 2007, Noreco issued a parent company guarantee to the Danish Ministry of Climate, Energy and Building on
behalf of its subsidiary Noreco Oil Denmark A/S and Noreco Petroleum Denmark A/S.
On 31 December 2012, Noreco issued a parent company guarantee on behalf of its subsidiary Noreco Norway AS. Noreco
guarantees that, if any sums become payable by Noreco Norway AS to the Norwegian Secretary of State under the terms of
the licences and the company does not repay those sums on first demand, Noreco shall pay to the Norwegian Secretary of
State on demand an amount equal to all such sums. Noreco Norway AS was liquidated in 2018, however as per 31 December
2020 the guarantee has not been withdrawn.
In connection with completion of the acquisition of Shell Olie- og Gasudvinding Denmark B.V. in 2019, Noreco issued a
parent company guarantee to the Danish state on behalf of the two acquired companies for obligations in respect of licence
8/06, area B and the Tyra West – F3 gas pipeline. In addition, Noreco issued a parent company guarantee towards the
lenders under the Reserve Based Lending Facility Agreement, to Total E&P Danmark A/S for its obligations under the DUC
JOA and to Shell Energy Europe Limited related to a gas sales and purchase agreement (capped at EUR 30 million).

8 SHAREHOLDERS’ EQUITY
Changes in equity Share Share Treasury Other

All figures in USD million capital premium reserve equity Total
Equity 31 December 2019 30 707 - (254) 482
Share-based incentive program - - - 2 2
Share buyback - - (0) (10) (10)
Net result for the period - - - (24) (24)
Equity 31 December 2020 30 707 (0) (286) 450
9 SHARE CAPITAL AND SHAREHOLDER INFORMATION
2020 2019
Ordinary shares 24,549,013 24,549,013
Treasury shares (438,161) -
Total shares 24,110,852 24,549,013
Par value in NOK 10 10
Noreco owns 438,161 of its own shares. All shares have equal rights. All shares are fully paid.
CHANGES IN NUMBER OF SHARES AND SHARE CAPITAL:
No. of shares Share capital*

Share capital as of 1 January 2019 7,194,730 8
Share issue 26 July 2019 15,585,635 19
Share issue 30 August 2019 1,768,648 2
Share capital as of 31 December 2019 24,549,013 30
Share capital as of 31 December 2020 24,549,013 30
Treasury share
No. of shares reserve*
Treasury shares as of 1 January 2019 - -
Treasury shares as of 31 December 2019 - -
Purchsase of Treasury shares (438,161) (0)
Treasury shares as of 31 December 2020 (438,161) (0)
*In USD million.

CHANGES IN 2020
The company bought back 438,161 of its own shares, of which 299,925 shares was bought as part of a reverse book building
process and 138,236 shares was bought in the market. The buyback programme was executed in accordance with the
authorization given by the Noreco’s general meeting in 28 June 2018, which was valid until 28 June 2020. After the completion
of the buyback programme, Noreco owns 438,161 of its own shares, approximately 1.78 percent.
CHANGES IN 2019
As part of the Transaction, Noreco issued 15,585,635 new ordinary shares through a private placement and 1,768,645 new
ordinary shares through a partially underwritten subsequent offering (which was over-subscribed by 101%), at a subscription
price of NOK 185 per share.
OVERVIEW OF SHAREHOLDERS AT 30 MARCH 2021:
Shareholder* Shareholding Ownership share Voting share

Euroclear Bank S.A./N.V. 7,377,191 30.05% 30.05%
Goldman Sachs International 5,865,617 23.89% 23.89%
BNP Paribas 1,431,852 5.83% 5.83%
The Bank of New York Mellon SA/NV 978,193 3.98% 3.98%
Barclays Bank PLC 820,000 3.34% 3.34%
Bank of America, N.A. 774,408 3.15% 3.15%
J.P. Morgan Securities LLC 588,513 2.40% 2.40%
NORWEGIAN ENERGY COMPANY ASA 438,161 1.78% 1.78%
UBS Switzerland AG 405,487 1.65% 1.65%
Morgan Stanley & Co. Int. Plc. 293,670 1.20% 1.20%
State Street Bank and Trust Comp 286,392 1.17% 1.17%
The Bank of New York Mellon 240,979 0.98% 0.98%
DnB NOR Bank ASA 237,382 0.97% 0.97%
UBS AG 225,428 0.92% 0.92%
SOBER AS 178,332 0.73% 0.73%
OUSDAL AS 146,975 0.60% 0.60%
Goldman Sachs & Co. LLC 142,488 0.58% 0.58%
VELDE HOLDING AS 116,238 0.47% 0.47%
FINSNES INVEST AS 112,079 0.46% 0.46%
Total 21,139,725 86.1 % 86.1 %
Other owners (ownership <0,42%) 3,409,288 13.89% 13.89%
Total number of shares at 30 March 2021 24,549,013 100% 100%
Nominee holder
*

10 SHARE-BASED COMPENSATION
Fair value of the options is calculated using the Black-Scholes-Merton option pricing model. Inputs to the model includes grant
date, exercise price, expected exercise date, volatility and risk-free rate.
Outstanding share options

Total share options outstanding as at 1 January 2019 -
Share options granted in 2019 956,954
Outstanding at 31 December 2019 956,954
Amendment to option programme (323,086)
Share options relinquished in 2020 (70,000)
For more details related to share-based payment, please see note 25 in the Consolidated Financial Statement.
11 PAYROLL EXPENSES AND REMUNERATION

Salaries (incl. directors' fees) (4) (3)
Social security tax (1) (1)
Pension costs1) (0) (0)
Costs relating to share based payments (2) (8)
Other personnel expenses (0) (1)
Total personnel expenses (7) (13)
Average number of employees 8 7

1)
Norwegian Companies are obliged to have occupational pension in accordance with the Norwegian act related to mandatory occupational pension.
Noreco ASA meet the Norwegian requirements for mandatory occupational pension ("obligatorisk tjenestepensjon"). The pension costs amount to USD
0.1 million in 2020, compared to USD 0.2 million in 2019.
For further information on remuneration to key management personnel and board of directors, please see note 7 in the
Consolidated Financial Statement.

12 WRITE DOWN OF FINANCIAL ASSETS

Net write-down loans to subsidiaries (1) -
Net write-down loans to subsidiaries - 33
Total write-down of prior year impairment (1) 33
2020 WRITE DOWN OF FINANCIAL ASSETS

Write-down of loans to subsidiaries consists of impairment of loans to Noreco Oil (UK) Ltd. and Norwegian Energy Company
UK Ltd.
2019 NET REVERSAL OF FINANCIAL ASSETS

Reversal of prior year impairment are mainly related to loan to Altinex. The intercompany receivables to the UK investment
are impaired to zero.
13 TAX
Reconciliation of nominal to actual tax rate:

Result before tax (24) 12
Corporation income tax of income (loss) before tax -22% (5) 3

Sum calculated tax expense (5) 3
Permanent differences (0) 0
Changes in deferred tax assets - not recognised 5 2
Prior year adjustments - 0
Income tax expense (0) -
Deferred tax liability and deferred tax assets:

Net operating loss deductible 90 85
Interest limitation carried forward 20 -
Fixed assets (0) (0)
Current assets 17 3
Liabilities (22) (4)
Tax base deferred tax liability / deferred tax asset 105 83
Net deferred tax liability / (deferred tax asset) (22%) (24) (18)
Unrecognised deferred tax asset 24 18

14 OTHER OPERATING EXPENSES AND AUDIT FEES

Lease expenses (1) (0)
IT expenses (0) (1)
Travel expenses (0) (0)
General and administrative costs (0) (0)
Consultant fees (2) (10)
Other operating expenses (0) (1)
Total other operating expenses (4) (12)
Expensed audit fee:
USD 1000, excl.VAT 2020 2019

Audit (318) (226)
Other assurance services - (149)
Total audit fees (318) (226)
15 RELATED PARTY TRANSACTIONS
Transactions with related party

a) Allocation of cost to group companies 2 9
b) Purchases of services 0 5
c) Sale of assets - -
Interest income and interest expenses to group companies are presented separately in the income statement.
Services are charged between group companies at an hourly rate which corresponds to similar rates between independent
parties. Allocation of IT and service cost to group companies amounts to USD 2 million for 2020. The decrease compared to
last year is because last year included increased activity in the Danish subsidiaries following the Transaction.
Purchase of services includes consultancy cost from S&U Trading ApS (owned by Board Member Lars Purlund) of USD 0.3
million.
BALANCES WITH GROUP COMPANIES

Carrying value of balances with group companies are stated on the face of the balance sheet and are all related to 100 percent
controlled subsidiaries.
Noreco did not have any other transactions with any other related parties during 2020. Director's fee paid to shareholders and
remuneration to management is described in Note 7 in the consolidated financial statements.

Consolidated Statements
76 Consolidated Statement of Comprehensive Income
77 Consolidated Statement of Financial Position
79 Consolidated Statement of Change in Equity
80 Consolidated Statement of Cash Flows
81 Note 1: Summary of Significant Accounting Policies
91 Note 2: Financial Risk Management
93 Note 3: Critical Accounting Estimates and Judgements
95 Note 4: Revenue
96 Note 5: Production Expenses
96 Note 6: Exploration and Evaluation Expenses
97 Note 7: Payroll Expenses and Remuneration
101 Note 8: Other Operating Expenses
102 Note 9: Intangible Assets
103 Note 10: Acquisition of Subsidiary
106 Note 11: Property, Plant and Equipment
107 Note 12: Financial Income and Expenses
108 Note 13: Tax
110 Note 14: Earnings per Share
111 Note 15: Non-Current Receivables, Trade Receivable and Other Current Receivables
112 Note 16: Inventories
112 Note 17: Restricted Cash, Bank Deposits, Cash and Cash Equivalents
113 Note 18: Financial Instruments
118 Note 19: Share Capital
119 Note 20: Post-Employment Benefits
120 Note 21: Asset Retirement Obligations
121 Note 23: Borrowings
124 Note 24: Trade Payables and Other Payables
125 Note 25: Share-based Compensation
126 Note 26: Guarantees
126 Note 27: Investment in Jointly Owned Assets
127 Note 28: Contingencies and Commitments
128 Note 29: Related Party Transactions
128 Note 30: Subsequent Events

Consolidated Statement of Comprehensive Income
2019
All figures in USD million Note 2020 restated
Revenue 4 566 333

Total revenues 566 333
Production expenses 5 (295) (171)

Exploration and evaluation expenses 6 (2) (1)
Personnel expenses 7 (12) (16)
Other operating expenses 8 (8) (19)
Total operating expenses (316) (206)
Operating result (EBITDA) 250 127
Depreciation 11, 10 (193) (112)

Impairment of goodwill 9, 10 - (266)
Net operating result (EBIT) 57 (251)
Financial income 12, 10 103 152

Financial expenses 12, 22, 10 (177) (100)
Result before tax (EBT) (18) (199)
Income tax benefit / (expense) 13 35 414

Net result for the year 17 215
Other comprehensive income (net of tax):

Items that may be subsequently reclassified to profit or loss:
Realized cash flow hedge (29) -
Related tax - realized cash flow hedge 18 -
Changes in fair value 108 40
Related tax - changes in fair value (69) (26)
Currency translation adjustment 3 1
Total other comprehensive income for the year (net of tax) 32 15
Total comprehensive income for the year (net of tax) 49 230
Earnings per share (USD 1)

Basic 14 0.7 14.6
Diluted 14 0.4 12.3

Consolidated Statement of Financial Position
as of 31 December
31.12.2019
All figures in USD million Note 31.12.2020 restated
Non-current assets
Licence and capitalised exploration expenditures 9, 10 175 268
Deferred tax assets 13, 10 432 455
Property, plant and equipment 10, 11 1,704 1,550
Right of Use asset 22 1 1
Restricted cash 17, 18 196 115
Contingent consideration - volume protection 15 - 17
Derivative instruments 18 26 6
Total non-current assets 2,533 2,413
Current assets
Derivative instruments 18 34 (0)
Contingent consideration - volume protection 15 15 104
Trade receivables and other current assets 15 81 96
Inventories 16 40 36
Bank deposits, cash and cash equivalents 17 259 286
Total assets 2,962 2,935
Equity
Share capital 19 30 30
Other equity 600 560
Total equity 630 589
Non-current liabilities
Asset retirement obligations 21 927 915
Convertible bond loan 23, 18 131 108
Bond loan 23, 18 169 168
Reserve based lending facility 23, 18 719 707
Other non-current liabilities 23, 22 26 26
Total non-current liabilities 1,991 1,988
Current liabilities
Asset retirement obligations 21 24 52
Tax payable 13 27 106
Trade payables and other current liabilities 24 286 191
Total liabilities 2,332 2,346

Total equity and liabilities 2,962 2,935

Consolidated Statement of Financial Position
as of 31 December
Oslo
19 April 2021



Consolidated Statement of Changes in Equity
Share Treasury Currency Cash flow

Share premium share translatio hedge Other Total
All figures in USD million capital fund reserve n fund reserve equity equity
2019
Equity on 01.01.2019 8 343 - (3) - (354) (6)
Net result for the period - restated 215 215
Other comprehensive income

Changes in fair value - restated - - - - (40) - (40)
Related tax - restated - - - - 26 - 26
Currency translation adjustments - - - 2 - - 2
Other OCI items - - - - - (0) (0)
Total other comprehensive income - - - 2 (14) (0) (13)
Issue of shares 21 369 - - - - 390

Transaction cost equity issue - (4) - - - - (4)
Share-based incentive program - - - - - 8 8
Total transactions with owners for the period 21 364 - - - 8 393
Equity as of 31.12.2019 - restated 30 707 - (2) (14) (131) 589
2020
Equity as of 01.01.2020 - restated 30 707 - (2) (14) (131) 589
Adjustment of prior year 4 (4) -
Net result for the period 17 17
Other comprehensive income

Realized cash flow hedge - - - - (29) - (29)
Related tax - realized cash flow hedge - - - - 18 - 18
Changes in fair value - - - - 108 - 108
Related tax - changes in fair value - - - - (69) - (69)
Currency translation adjustments - - - 3 - - 3
Total other comprehensive income - - - 3 29 - 32
Share-based incentive program - - - - - 2 2

Share buyback - - (0) - - (10) (10)
Total transactions with owners for the period - - (0) - - (8) (8)
Equity as of 31.12.2020 30 707 (0) 6 14 (126) 630

Consolidated Statement of Cash Flows
for the year ended 31 December
All figures in USD million Note 2020 2019
Cash flows from operating activities

Net result for the year 17 215
Adjustments for:
Income tax benefit 13 (35) (414)
Depreciation 11 193 112
Impairment of goodwill 9 - 266
Share-based payments expenses 2 8
Net financial costs 12 75 (52)
Changes in:
Trade receivable 15 3 20
Trade payables 24 79 68
Inventories and spare parts 15 5 16
Prepayments 15 8 17
Over-/underlift 15 0 (7)
Other current balance sheet items 0 (0)
Net cash flow from operating activities 348 249
Cash flows from investing activities

Acquisition of subsidiary 10 - (1,071)
Post completion payment (2) -
Volume guarantee 15 102 50
Locked box interest 10 - (66)
Tax Paid1) (72) (51)
Investment in oil and gas assets 11 (236) (86)
Investment in exploration licenses 6 (2) -
Changes in restricted cash accounts 17 (75) (50)
Net cash flow from investing activities (285) (1,274)
Cash flows from financing activities

Drawdown long-term loans 23 6 1,078
Repayment short-term loans - (54)
Abandonment spent 21 (74) (34)
Lease payments (1) (0)
Share buyback (10) -
Issue of new shares - 390
Transaction costs related to financing (1) (54)
Transaction costs related to equity issue (0) (4)
Repurchase/(sale) own bonds - (1)
Interest paid (56) (15)
Hedge income 52 -
Other financial items (6) 3
Net cash flow from financing activities (89) 1,309

Cash and cash equivalents at the beginning of the year 286 3
Cash and cash equivalents at end of the year 259 286
* Tax paid which were attribuatble to the period before closing is classifies as investing activitise, 2019 is reclassified from operating activities.

Notes
1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Norwegian Energy Company ASA (“Noreco”, “the Company” considered satisfactory in regards of the planned activity
or “the Group”) is a public limited liability company registered level for the next twelve months.
in Norway, with headquarters in Oslo (Nedre Vollgate 1, 0158
Oslo). The Company has subsidiaries in Norway, Denmark, The board of directors is of the opinion that the consolidated
Netherlands and the United Kingdom. The Company is listed financial statements give a true and fair view of the
on the Oslo Stock Exchange. Company’s assets, debt, financial position and financial
results. The board of directors are not aware of any factors
The consolidated financial statements for 2020 were that materially affect the assessment of the Company’s
approved by the board of directors on 19 April 2021 for position as of 31 December 2020, besides what is disclosed
adoption by the General Meeting on 19 May 2021. in the Director’s report and the financial statements.
The principal accounting policies applied in the preparation The subtotals and totals in some of the tables may not equal
of these consolidated financial statements are set out below. the sum of the amounts shown due to rounding.
These policies have been consistently applied to all the years
presented, unless otherwise stated. The Group also provides 1.1.1 CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES
the disclosure requirements as specified under the
Norwegian Accounting Law (Regnskapsloven). Commodity contracts that were entered into and continue to
be held for the purpose of the delivery of a non-financial item
1.1 BASIS OF PREPARATION in accordance with the Group’s expected sale requirements
fall within the exception from IFRS 9 which are now subject to
The consolidated financial statements of Norwegian Energy the ‘normal purchase or sale exemption’ and the related
Company ASA (Noreco ASA) have been prepared in intangible assets and their amortisation. Previously these
accordance with International Financial Reporting Standards contracts were accounted for as financial assets with
(IFRSs) and interpretations from the IFRS interpretation subsequent fair value changes recognised in profit or loss.
committee (IFRIC), as endorsed by the EU. The Group does Comparative in the notes has been updated to reflect the
also provide information which is obligated in accordance revised PPA however it is not marked as restated. For further
with the Norwegian Accounting Act and associated N-GAAP details see note 10 Acquisition of subsidiary – Final purchase
standards. price allocation.
The preparation of financial statements in accordance with Other amendments to standards

IFRS requires the use of certain critical accounting estimates. Other standards and amendments to standards, issued are
It also requires management to exercise its judgement in the either not expected to impact Noreco’s Consolidated
process of applying the Group’s accounting policies. The financial statements materially, or are not expected to be
areas involving a higher degree of judgement or complexity, relevant to the Consolidated financial statements upon
or areas where assumptions and estimates are significant to adoption.
the consolidated financial statements are disclosed in note 4.
1.2 CONSOLIDATION
In accordance with the Norwegian Accounting Act, section
3-3a, the board of directors confirms that the consolidated Subsidiaries
financial statements have been prepared under the Subsidiaries are all entities over which the group has control.
assumption of going concern and that this is the basis for the The group controls an entity when the group is exposed to,
preparation of the financial statements. The financial solidity or has rights to, variable returns from its involvement with the
and the company’s working capital and cash position are entity and has the ability to affect those returns through its

power over the entity. Subsidiaries are fully consolidated proportion of the voting rights in the subsidiary undertakings
from the date on which control is transferred to the group. held directly by the parent company does not differ from the
They are de-consolidated from the date that control ceases. proportion of ordinary shares held. The parent company does
not have any shareholdings in the preference shares of
As of 31 December 2020, all consolidated subsidiaries are subsidiary undertakings included in the group. All subsidiary
100 percent controlled by the parent company, Norwegian undertakings are included in the consolidation.
Energy Company ASA or other group companies. The
The group had the following subsidiaries on 31 December 2020:
Country of Ordinary shares Ordinary shares

incorp and place directly held held by the
Name of business Nature of business by parent (%) group (%)
Noreco Denmark A/S Denmark Intermediate holding company 100%
Noreco Oil Denmark A/S Denmark Exploration and production 100%
Noreco Petroleum Denmark A/S Denmark Exploration and production 100%
Noreco Olie- og Gasudvinding Danmark B.V Netherlands Exploration and production 100%
Noreco DK Pipeline Aps Denmark Infrastructure oil and gas 100%
Norwegian Energy Company UK Ltd Great Britain Exploration activity 100% 100%
Noreco Oil (UK) Ltd Great Britain Exploration activity 100%
Altinex AS Norway Intermediate holding company 100% 100%

Djerv Energi AS Norway Dormant Company 100% 100%
The Group acquired 100% of the shares in Shell Olie- og Any contingent consideration to be transferred or received
Gasudvinding Danmark B.V. and its wholly owned subsidiary by the group is recognised at fair value at the acquisition
Shell Olie- og Gasudvinding Danmark Pipelines ApS in 2019. date. Subsequent changes to the fair value of the contingent
consideration that is deemed to be an asset or liability is
The group applies the acquisition method to account for recognised in profit or loss. Contingent consideration that is
business combinations. The consideration transferred for the classified as equity is not re-measured, and its subsequent
acquisition of a subsidiary is the fair values of the assets settlement is accounted for within equity. Inter-company
transferred, the liabilities incurred to the former owners of transactions, balances, income and unrealised gains on
the acquiree and the equity interests issued by the Group. transactions between group companies are eliminated.
The consideration transferred includes the fair value of any Unrealised losses are also eliminated. When necessary,
asset or liability resulting from a contingent consideration amounts reported by subsidiaries have been adjusted to
arrangement. Identifiable assets acquired and liabilities and conform with the group’s accounting policies.
contingent liabilities assumed in a business combination are
measured initially at their fair values at the acquisition date. Interest in jointly controlled assets
Acquisition-related costs are expensed as incurred, except if A jointly controlled asset is a contractual agreement between
related to the issue of debt not at FVTPL or equity securities. two or more parties regarding a financial activity under joint
If the business combination is achieved in stages, the control. The Group has ownership in licences that are not
acquisition date carrying value of the acquirer’s previously separate legal companies. The company recognizes its share
held equity interest in the acquiree is re-measured to fair of the assets, liabilities, revenues and expenses of the joint
value at the acquisition date; any gains or losses arising from operation in the respective line items in the Company’s
such re-measurement are recognised in profit or loss. financial statements based on its ownership share.

1.3 SEGMENT REPORTING adjustments arising on the acquisition of a foreign entity are
The group’s segments were established on the basis of the treated as assets and liabilities of the foreign entity and
most appropriate distribution of resource and result translated at the closing rate. Currency translation
measurement. Operating segments are reported in a manner adjustments arising are recognised in other comprehensive
consistent with the internal reporting provided to the chief income.
operating decision-maker. The chief operating decision-
maker, who is responsible for allocating resources and 1.5 PROPERTY, PLANT AND EQUIPMENT
assessing performance of the operating segments, has been
identified as the managing director. The whole group is Property, plant and equipment include production facilities,
considered a single operating segment. machinery and equipment. Items of property, plant and
equipment are measured at cost, less accumulated
1.4 FOREIGN CURRENCY TRANSLATION depreciation and accumulated impairment losses. Cost
includes purchase price or construction cost and any costs
a) Functional and presentation currency directly attributable to bringing the assets to a working
Items included in the financial statements of each of the condition for their intended use, including capitalised
group’s entities are measured using the currency of the borrowing expenses incurred up until the time the asset is
primary economic environment in which the entity operates ready to be put into operation.
(‘the functional currency’). The consolidated financial For property, plant and equipment where asset retirement
statements are presented in US dollars (USD), which is the obligations for decommissioning and dismantling are
group’s presentation currency and the parent company and recognised as a liability, this value is added to acquisition cost
main operating companies functional currency. for the respective assets. Borrowing costs that are not
directly attributable to the acquisition, construction or
b) Transactions and balances production of a qualifying asset are recognised in the income
Foreign currency transactions are translated into the statement using the effective interest method.
functional currency using the exchange rates prevailing at
the dates of the transactions or valuation where items are re- When parts of an item of property, plant and equipment have
measured. Foreign exchange gains and losses are different useful lives, they are accounted for as separate
recognised in the income statement as other financial items (major components) of property, plant and equipment
income or other financial expenses. and depreciated separately.
c) Group companies Subsequent costs are included in the asset’s carrying amount
The results and financial position of all the group entities or recognised as a separate asset, as appropriate, only when
(none of which has the currency of a hyper-inflationary it is probable that future economic benefits associated with
economy) that have a functional currency different from the the item will flow to the Group and the cost of the item can be
presentation currency are translated into the presentation measured reliably. The carrying amount of the replaced part
currency as follows: is derecognised. All other repairs and maintenance are
charged to the income statement during the financial period
I) assets and liabilities for each financial position presented in which they are incurred.
are translated at the closing rate at the date of that statement
of financial position; Gain or loss from sale of property, plant and equipment,
which is calculated as the difference between the sales
II) income and expenses for each income statement are consideration and the carrying amount, is reported in the
translated at the average quarterly exchange rates (unless income statement under other (losses)/gains.
this average is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction Expenses related to drilling and equipment for exploration
dates, in which case income and expenses are translated at wells where proven and probable reserves are discovered are
the rate on the dates of the transactions) capitalised and depreciated using the unit-of-production
(UoP) method based on the proven and probable reserves
III) All currency translation adjustments are recognised in expected to be produced from the well. Development cost
other comprehensive income. Goodwill and fair value related to construction, installation and completion of

infrastructural facilities such as platforms, pipelines and Capitalised exploration expenditures, including expenditures
drilling of production wells, are capitalised as producing oil to acquire interests in oil and gas properties, related to wells
and gas fields. They are depreciated using the unit-of- that find proved reserves are transferred from exploration
production method based on the proven and probable expenditures (intangible assets) to property, plant and
developed reserves expected to be recovered from the area equipment at the time of sanctioning of the development
for the economic lifetime of the field. For fields where the oil project.
share of the reserves constitutes the most significant part of
the value, the capitalised cost is depreciated based on Other intangible assets
produced barrels of oil. This generally gives a more Intangible assets acquired separately are measured on initial
systematic allocation of depreciation expenses over the recognition at cost. The cost of intangible assets acquired in
useful life than using all produced oil equivalents. If a business combination is their fair value at the date of
realisation of the probable reserves demands further future acquisition. Following initial recognition, intangible assets
investments, these are added to the basis of depreciation. with definite lives are carried at cost less any accumulated
amortisation and accumulated impairment losses, if any.
Acquired assets used for extraction and production of Internally generated intangible assets, excluding capitalised
petroleum deposits, including licence rights, are depreciated development costs, are not capitalised. Instead, the related
using the unit-of-production method based on proven and expenditure is recognised in profit or loss in the period in
probable reserves. which the expenditure is incurred. Intangible assets are
amortised over the useful economic life and assessed for
Historical cost price for other assets is depreciated over the impairment whenever there is an indication that the
estimated useful economic life of the asset, using the intangible asset may be impaired. The amortisation period
straight-line method. and the amortisation method for an intangible asset is
reviewed at least at the end of each reporting period.
The estimated useful lives are as follows: Changes in the expected useful life or the expected pattern
- Office equipment and fixtures: 3-5 years of consumption of future economic benefits embodied in the
asset are considered to modify the amortisation period or
Depreciation methods, useful lives, residual values and method, as appropriate, and are treated as changes in
reserves are reviewed at each reporting date and adjusted if accounting estimates. The amortisation expense on
appropriate. intangible assets is recognised in the Consolidated
Statement of Comprehensive income in the line item
1.6 INTANGIBLE ASSETS Depreciation and Amortisation.
Oil and gas exploration and development expenditures Goodwill

The group applies the successful efforts method of Goodwill arises on the acquisition of subsidiaries and
accounting for oil and gas exploration expenditures. represents the excess of the consideration transferred, the
Expenditures to acquire interests in oil and gas properties amount of any non-controlling interest in the acquiree and
and to drill and equip exploratory wells are capitalised as the acquisition-date fair value of any previous equity interest
exploration expenditures within intangible assets until the in the acquiree over the fair value of the identifiable net
well is complete and the results have been evaluated, or there assets acquired. If the total consideration transferred, non-
is any other indicator of a potential impairment. Exploration controlling interest recognised and previously held interest
wells that discover potentially economic quantities of oil and measured at fair value is less than the fair value of the net
natural gas remain capitalised as intangible assets during the assets of the subsidiary acquired, in the case of a bargain
evaluation phase of the discovery. This evaluation is normally purchase, the difference is recognised directly in the income
finalised within one year. If, following the evaluation, the statement.
exploratory well has not found potentially commercial
quantities of hydrocarbons, the capitalised expenditures are For the purpose of impairment testing, goodwill acquired in a
evaluated for derecognition or tested for impairment. business combination is allocated to each of the cash
Geological and geophysical expenditures and other generating units (CGUs), or groups of CGUs, that is expected
exploration and evaluation expenditures are expensed as to benefit from the synergies of the combination. Each unit or
incurred.

group of units to which the goodwill is allocated represents Property, plant and equipment subject to amortisation are
the lowest level within the entity at which the goodwill is reviewed for impairment whenever events or changes in
monitored for internal management purposes. Goodwill is circumstances indicate that the carrying amount may not be
monitored at the operating segment level. recoverable. An impairment loss is recognised for the
amount by which the asset’s carrying amount exceeds its
Goodwill impairment reviews are undertaken annually or recoverable amount.
more frequently if events or changes in circumstances The recoverable amount is the higher of an asset’s fair value
indicate a potential impairment. The carrying value of the less costs of disposal and value in use. For the purposes of
CGU containing the goodwill is compared to the recoverable assessing impairment, assets are grouped at the lowest
amount, which is the higher of value in use and the fair value levels for which there are separately identifiable cash flows
less costs of disposal. Any impairment is recognised (cash-generating units). Non-financial assets other than
immediately as an expense and is not subsequently reversed. goodwill that suffered impairment write-downs are assessed
for potential impairment reversal at each reporting date as to
In connection with divestment of assets, gain or loss is whether there is an indication that an impairment loss may no
calculated by settling all carrying balances related to the longer exist or may have decreased.
realised asset and comparing this with the agreed
consideration adjusted for any pro/contra settlement. 1.8 FINANCIAL ASSETS
In cases where the sold asset forms a part of a cash 1.8.1 CLASSIFICATION
generating unit to which goodwill is allocated, goodwill is
allocated to the sold asset based on the relative share of fair The Group classifies financial assets and financial liabilities
value which forms part of the specific cash generating unit according to IFRS 9 through the mixed measurement model
for goodwill. This method is used unless the Company can with three primary measurement categories for financial
demonstrate that another method better reflects the assets: amortized cost, fair value through OCI and fair value
goodwill related with the sold asset. through P&L. The classification depends on the entity’s
business model and the contractual cash flow characteristics
1.7 IMPAIRMENT OF NON-FINANCIAL ASSETS of the financial assets. Management determines the
classification of its financial assets at initial recognition.
a) Unit of account
The Group applies each prospect, discovery, or field as unit (a) Financial assets and liabilities at fair value through
of account for allocation of profit or loss and financial position profit or loss
items. Financial assets at fair value through profit or loss are
financial assets held for trading that are not measured at
When performing impairment testing of licence and amortized cost or at fair value through other comprehensive
capitalised exploration expenditures and production income. IFRS 9 requires that for a financial liability designated
facilities, each prospect, discovery, or field is tested as at fair value through profit or loss the effects of changes in
separately as long as they are not defined to be part of a the liability’s credit risk shall be included in other
larger cash generating unit. comprehensive income instead of through profit and loss.
Derivatives, including embedded derivatives are also
Developed fields producing from the same offshore recognised at fair value through profit or loss unless they are
installation are treated as one joint cash generating unit. The designated as hedges. Assets in this category are classified
size of a cash generating unit cannot be larger than an as current assets if expected to be settled within 12 months,
operational segment. otherwise they are classified as non-current.
Goodwill is tested for impairment at the same level in which
the goodwill is allocated. (b) Financial assets and liabilities at amortised cost
The Group measures financial assets at amortised cost if
b) Impairment testing both of the following conditions are met:
Intangible assets with an indefinite useful life are not subject
to amortisation and are tested annually for impairment. For -The financial asset is held within a business model with the
Oil and gas exploration and development expenditures, see objective to hold financial assets in order to collect
2.6 above re assessment of impairment and derecognition. contractual cash flows and,

- The contractual terms of the financial asset give rise on difference between the contractual cash flows due in
specified dates to cash flows that are solely payments of accordance with the contract and all the cash flows that the
principal and interest on the principal amount outstanding Group expects to receive, discounted at an approximation of
the original effective interest rate. The expected cash flows
Financial assets at amortised cost are subsequently will include cash flows from the sale of collateral held or other
measured using the effective interest (EIR) method and are credit enhancements that are integral to the contractual
subject to impairment testing. Gains and losses are terms.
recognised in profit or loss when the asset is derecognised,
modified or impaired. The Group applies a simplified approach in calculating ECLs
for trade receivables and contract assets. Therefore, the
These assets are included in current assets, except for Group does not track changes in credit risk, but instead
maturities greater than 12 months after the end of the recognises a loss allowance based on lifetime ECLs at each
reporting period. These are classified as non-current assets. reporting date.
The Group’s financial assets categorised as at amortised cost 1.10 DERIVATIVE FINANCIAL INSTRUMENTS AND
comprise trade and other receivables, contract assets, HEDGING ACTIVITIES
restricted cash and cash and cash equivalents in the
statement of financial position (notes 2.11 and 2.12). Derivatives are initially recognised at fair value on the date a
derivative contract is entered into and are subsequently re-
The group measures interest-bearing loans and borrowings measured at their fair value. The method of recognising the
(financial liabilities) at amortised cost using the effective resulting gain or loss depends on whether the derivative is
interest method. designated as a hedging instrument, and if so, the nature of
the item being hedged.
1.8.2 RECOGNITION AND MEASUREMENT
The Group uses derivative financial instruments, such as
Regular purchases and sales of financial assets are forward commodity contracts and options, to reduce the
recognised on the trade-date – the date on which the Group exposure to commodity price volatility. Effective from 1
commits to purchase or sell the asset. Investments are October 2019 the Group has elected to apply cash flow
initially recognised at fair value plus transaction costs for all hedge accounting designating these derivatives. Such
financial assets not carried at fair value through profit or loss. derivative financial instruments are initially recognized at fair
Financial assets carried at fair value through profit or loss, are value on the date on which a derivative contract is entered
initially recognised at fair value, and transaction costs are into and from the date of start of cash flow hedge accounting.
expensed in the income statement. Financial assets are These are subsequently remeasured at fair value and the
derecognised when the rights to receive cash flows from the effective portion of the gain or loss on the hedging
investments have expired or have been transferred and the instrument is recognised in other comprehensive income
Group has transferred substantially all risks and rewards of (OCI), while any ineffective portion is recognised immediately
ownership. Financial assets at fair value through profit or loss in profit or loss (financial income or financial expenses). The
are subsequently carried at fair value. Trade and other cash flow hedge reserve is adjusted to the lower of the
receivables are subsequently carried at amortised cost using cumulative gain or loss on the hedging instrument and the
the effective interest method. Gains or losses arising from cumulative change in fair value of the hedged item. The
changes in the fair value of the ‘financial assets at fair value amount accumulated in OCI is reclassified to profit or loss as
through profit or loss’ category is presented in the income a reclassification adjustment in the same periods during
statement within ‘Financial items’ in the period in which they which the hedged cash flows affect profit or loss. If cash flow
arise. hedge accounting is discontinued, the amount that has been
accumulated in OCI must remain in accumulated OCI if the
1.9 IMPAIRMENT OF FINANCIAL ASSETS hedged future cash flows are still expected to occur.
Otherwise the amount will be immediately reclassified to
The Group recognises an allowance for expected credit profit or loss as a reclassification adjustment. Derivatives are
losses (ECLs) for all debt instruments (financial assets) not carried as financial assets when the fair value is positive and
held at fair value through profit or loss. ECLs are based on the as financial liabilities when the fair value is negative.

Commodity contracts that were entered into and continue to For the accounts, under lifts are treated as prepayments and
be held for the purpose of the delivery of a non-financial item over lifts are treated as accruals for incurred expenses.
in accordance with the Group’s expected sale requirements
fall within the exception from IFRS 9, which is known as the 1.14 SHARE CAPITAL, TREASURY SHARE RESERVES AND
’normal purchase or sale exemption’ or the ‘own use’ scope SHARE PREMIUM
exception. For these contracts and the host part of the
contracts containing embedded derivatives, they are Ordinary shares are classified as equity. Costs directly
accounted for as executory contracts. The Group recognises attributable to the issue of new shares or option shares are
such contracts in its statement of financial position only when recognised as a deduction from equity, net of any tax effects.
one of the parties meets its obligation under the contract to Treasury share reserves are recognised as a deduction on
deliver either cash or a nonfinancial asset. equity at nominal value, the difference between nominal
value and purchase price is deducted from other equity.
1.11 TRADE RECEIVABLES
1.15 TRADE PAYABLES
Trade receivables are amounts due from customers for oil
and gas sold or services performed in the ordinary course of Trade payables are obligations to pay for goods or services
business. If collection is expected in one year or less (or in the that have been acquired in the ordinary course of business
normal operating cycle of the business if longer), they are from suppliers. Trade payables are classified as current
classified as current assets. If not, they are presented as liabilities if payment is due within one year or less (or in the
noncurrent assets. normal operating cycle of the business if longer). If not, they
are presented as noncurrent liabilities.
Trade receivables are measured at amortized cost using the
effective interest method, less provision for impairment. Trade payables are measured at fair value at first time
recognition. Subsequent measurements are considered
1.12 CASH AND CASH EQUIVALENTS trade payables at amortised cost when using effective
interest rate.
Cash and cash equivalents include cash, bank deposits and
short-term liquid placements, that immediately and with 1.16 BORROWINGS
insignificant share price risk can be converted to known cash
amounts and with a remaining maturity less than three Borrowings (financial liabilities) are classified as measured at
months from the date of acquisition. In the consolidated amortised cost or FVTPL. Borrowings that are subsequently
statement of financial position, bank overdrafts are shown measured at amortised cost using the effective interest
within borrowings in current liabilities. method are recognised initially at fair value, net of
transaction costs incurred. For financial liabilities measures
1.13 OVER/UNDER LIFTING OF HYDROCARBONS to fair value transaction cost are expensed immediately. For
hybrid (combined) instrument that includes a non-derivative
Over/under lifting occurs when the Group has lifted and sold host contract that is not accounted for at FVTPL and an
more or less hydrocarbons from a producing field than what embedded derivative that is accounted for at FVTP such as
the Group is entitled to at the time of lifting. Over lifting of the convertible bond the company has elected an accounting
hydrocarbons is presented as other current liabilities, under polity that all of the transaction costs are always allocated to
lifting of hydrocarbons is presented as other current assets. and deducted from the carrying amount of the non-derivative
The value of under lifting is measured at the lower of host contract on initial recognition. The subsequent
production expenses and the estimated sales value, less measurement depends on which category they have been
estimated sales costs and the value of over lifting is measured classified into. The categories applicable for company are
at production expenses. Over lifting and under lifting of either financial liabilities measured at fair value through OCI
hydrocarbons are presented at gross value. Over/under lift or financial liabilities measured at amortised cost using the
positions at the statement of financial position date, are effective interest method. The company designated the
expected to be settled within 12 months from the statement bond loan settled in July 2019 at fair value through profit or
of the financial position date. loss. The new convertible bond loan has been determined to

contain embedded derivatives which is accounted for Investment income earned on the temporary investment of
separately as a derivative at fair value through profit or loss, specific borrowings pending their expenditure on qualifying
while the loan element is measured at amortized cost (note assets is deducted from the borrowing costs eligible for
3.1). capitalisation.
Borrowings are classified as non-current if contractual All other borrowing costs are recognised in profit or loss in
maturity is more than 12 months from the statement of the period in which they incur.
financial position date. If the Group is in breach with any
covenants on the statement of financial position date, and a 1.18 CURRENT AND DEFERRED INCOME TAX
waiver has not been approved before or on the statement of
financial position date with 12 months duration or more after The tax expense for the period comprises current tax, tax
the statement of financial position date, the loan is classified impact from refund of exploration expenses and deferred
as current even if expected maturity is longer than 12 months tax. Tax is recognised in the income statement, except to the
after the statement of financial position date. extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the
Fees paid on the establishment of loan facilities are tax is also recognised in other comprehensive income or
recognised as transaction costs of the loan to the extent that directly in equity, respectively.
it is probable that some or all of the facility will be drawn
down. In this case, the fee is deferred until the draw-down The current income tax charge is calculated on the basis of
occurs. To the extent there is no evidence that it is probable the tax laws enacted or substantively enacted at the
that some or all of the facility will be drawn down, the fee is statement of financial position date in the countries where
capitalised as a prepayment for liquidity services and the company and its subsidiaries operate and generate
amortised over the period of the facility to which it relates. taxable income. Management periodically evaluates
A financial liability is derecognised when the obligation under positions taken in tax returns with respect to situations in
the liability is discharged or cancelled, or when the which applicable tax regulation is subject to interpretation. It
contractual obligation expires. When an existing financial establishes provisions where appropriate on the basis of
liability is replaced by another from the same lender on amounts expected to be paid to the tax authorities.
substantially different terms, or the terms of an existing
liability are substantially modified, the exchange or Deferred income tax is recognised on temporary differences
modification is treated as the de-recognition of the original arising between the tax bases of assets, and liabilities and
liability and the recognition of a new liability. The difference their carrying amounts in the consolidated financial
in the respective carrying amounts is recognised in the statements. However, deferred tax liabilities are not
statement of comprehensive income as a gain or loss under recognised if they arise from the initial recognition of
financial items. Transaction costs incurred during this goodwill; deferred income tax is not accounted for if it arises
process are treated as a cost of the settlement of the old debt from initial recognition of an asset or liability in a transaction
and included in the gain or loss calculation. other than a business combination that at the time of the
transaction affects nether accounting nor taxable profit or
Borrowings are classified as current liabilities unless the loss. Deferred income tax is determined using nominal tax
Group has an unconditional right to defer settlement of the rates (and laws) that have been enacted or substantively
liability for at least 12 months after the end of the reporting enacted by the statement of financial position date and are
period. expected to apply when the related deferred income tax
asset is realised, or the deferred income tax liability is settled.
1.17 BORROWING COSTS
Deferred income tax assets are recognised only to the extent
General and specific borrowing costs directly attributable to that it is probable that future taxable profit will be available
the acquisition, construction or production of qualifying against which the temporary differences can be utilised.
assets, which are assets that necessarily take a substantial Deferred income tax assets are recognised on deductible
period of time to get ready for their intended use or sale, are temporary differences arising from investments in
added to the cost of those assets, until such time as the subsidiaries, associates and joint arrangements only to the
assets are substantially ready for their intended use or sale. extent that it is probable that the temporary difference will

reverse in the future and there is sufficient taxable profit 1.20 SHARE-BASED PAYMENTS
available against which the temporary difference can be
utilised. The Group operates a number of equity-settled, share-based
compensation plans, under which the entity receives
Deferred income tax assets and liabilities are offset when services from employees as consideration for equity
there is a legally enforceable right to offset current tax assets instruments (options) of the Group. The fair value of the
against current tax liabilities and when the deferred income employee services received in exchange for the grant of the
taxes assets and liabilities relate to income taxes levied by the options is recognised as an expense. The total amount to be
same taxation authority on either the same taxable entity or expensed is determined by reference to the fair value of the
different taxable entities where there is an intention to settle options granted:
the balances on a net basis.
Fair value:
Producers of oil and gas on the Danish Continental Shelf are • Including any market performance conditions
subject to the hydrocarbon tax regime under which, income • Excludes the impact of any service and non-market
derived from the sale of oil and gas is taxed at an elevated 64 performance vesting conditions (for example, profitability,
%. Any income deriving from other activities than first-time sales growth targets and remaining an employee of the entity
sales of hydrocarbons is taxed at the ordinary corporate over a specified time period)
income rate of currently 22 %. The 64 % is calculated as the
sum of the “Chapter 2” tax of 25% plus a specific hydrocarbon Non-market performance and service conditions are
tax (chapter 3A) of 52%, in which the 25% tax payable is included in assumptions about the number of options that are
deductible. When calculating the 52% tax, the company is expected to vest. The total expense is recognised over the
allowed to deduct an uplift (i.e. increased depreciation basis vesting period (which is the period over which all of the
for tax purposes) of 30% of the investments in property, plant specified vesting conditions are to be satisfied).
& Equipment’s (PP&E) over a period of 6 years. Through an
agreement from 2017 license holders on Danish Continental At the end of each reporting period, the Group revises its
Shelf have had the possibility of applying new rules whereby estimates of the number of options that are expected to vest
the company will have the possibility of increased uplift and based on the non-market vesting conditions. It recognises
accelerated depreciation during the period from 2017 to the impact of the revision to original estimates, if any, in the
2025. At the same time the companies utilizing the benefit income statement, with a corresponding adjustment to
are also liable for a windfall tax that will materialize from 2022 equity.
through 2037 with an oil price (indexed from 2017) above USD
75. The windfall tax cannot exceed the indexed benefit from When the options are exercised, the Company issues new
the applied rules. shares. The proceeds received net of any directly
attributable transaction costs are credited to share capital
1.19 PENSIONS (nominal value) and share premium.
The Group only has defined contribution plans as of 31 The social security contributions payable in connection with
December 2020. For the defined contribution plan, the group the grant of the share options is considered an integral part
pays contributions to publicly or privately administered of the grant itself, and the charge will be treated as a cash-
pension insurance plans on a mandatory, contractual or settled transaction.
voluntary basis. The group has no legal or constructive
obligations to pay further contributions if the fund does not 1.21 PROVISIONS
hold sufficient assets to pay all employees the benefits
relating to employee service in the current and prior periods. Provisions are recognised when the Company has a present
The contributions are recognised as employee benefit obligation (legal or constructive) arising from a past event,
expense when they are due. Prepaid contributions are and it is probable (more likely than not) that it will result in an
recognised as an asset to the extent that a cash refund or a outflow from the entity of resources embodying economic
reduction in the future payments is available. benefits, and that a reliable estimate can be made of the
amount of the obligation.

Restructuring provisions comprise lease termination 1.23 REVENUE RECOGNITION
penalties and employee termination payments. Provisions
are measured at the present value of the expenditures Revenue is recognized when the customer obtains control of
expected to be required to settle the obligation using a pre- the hydrocarbons, which is ordinarily at the point of delivery
tax rate that reflects current market assessments of the time (lifting and sales) when title passes (sales method).
value of money and the risks specific to the obligation. The
increase in the provision due to passage of time is recognised Over/under lifting occurs when the Group has lifted and sold
as interest expense. more or less hydrocarbons from a producing field than what
the Group is entitled to at the time of lifting. See note 1.13 for
1.21.1 ASSET RETIREMENT OBLIGATIONS description of accounting for over/under lifting of
Provisions reflect the estimated cost of decommissioning hydrocarbons in the statement of financial position.
and removal of wells and production facilities used for the
production of hydrocarbons. Asset retirement obligations 1.24 PRODUCTION EXPENSES
are measured at net present value of the anticipated future
cost (estimated based on current day costs inflated). The Production expenses are expenses that are directly attached
liability is calculated on the basis of current removal to production of hydrocarbons, e.g. expenses for operating
requirements and is discounted to present value using a risk- and maintaining production facilities and installations.
free rate adjusted for credit risk. Liabilities are recognised Expenses mainly consist of man-hours, insurance,
when they arise and are adjusted continually in accordance processing costs, environmental fees, transport costs etc.
with changes in requirements, price levels etc. When a
decommissioning liability is recognised or the estimate 1.25 INTEREST INCOME
changes, a corresponding amount is recorded to increase or
decrease the related asset and is depreciated in line with the Interest income is recognised using the effective interest
asset. Increase in the provision as a result of the time value of method.
money is recognised in the income statement as a financial
expense. If abandonment cost through agreements with 1.26 LEASES
partners have been limited to a given amount, this then forms
the basis for the recognized liability. At the inception of a contract, the group assesses whether
the contract is, or contains, a lease. A contract is, or contains,
1.22 CONTINGENT LIABILITIES AND ASSETS a lease if the contract conveys the right to control the use of
an identified asset for a period of time in exchange for
Contingent liabilities are defined as: consideration.
• Possible obligations that arise from past events, whose
existence depends on uncertain future events. Recognition of leases and exemptions
• Present obligations which have not been recognised At the lease commencement date, the group recognizes a
because it is not probable that they will result in a payment. lease liability and a corresponding right-of-use asset for all
• The amount of the obligation cannot be measured with lease agreements in which it is the lessee, except for short-
sufficient reliability. term leases (term of 12 months or less) and leases of low value
assets. For such leases, the group recognizes the lease
Specific mention of material contingent liabilities is payments as other operating expenses in the statement of
disclosed, with the exception of contingent liabilities where profit or loss as and when they are incurred.
the possibility of an outflow of resources embodying Lease liabilities
economic benefits is remote. The lease liability is measured at the present value of the
lease payments for the right to use the underlying asset
Contingent assets are not recognised in the financial during the lease term. The lease term represents the non-
statements but are disclosed if there is a certain probability cancellable period of the lease, together with periods
that a benefit will accrue to the Group. covered by an option either to extend or to terminate the
lease when the group is reasonably certain to exercise this
option.

The lease liability is subsequently measured by increasing the 2.1 FINANCIAL RISK FACTORS
carrying amount to reflect interest on the lease liability,
reducing the carrying amount to reflect the lease payments The group's activities expose it to financial risks: market risk
made and remeasuring the carrying amount to reflect any (including currency risk, price risk, interest rate risk), credit
reassessment or lease modifications, or to reflect risk and liquidity risk. The Group uses bond loans to finance
adjustments in lease payments due to an adjustment in an its operations in connection with the day to day business,
index or rate. financial instruments, such as bank deposits, trade
receivables and payables, and other current liabilities which
The group does not include variable lease payments in the arise directly from its operations, are utilised.
lease liability. Such variable leases are recognized as lease
expenses in profit or loss as and when incurred. Market risk
Market risk is the risk that the fair value of future cash flows
Right-of-use assets of a financial instrument will fluctuate because of changes in
The group measures the right-of use asset at cost, less any the market prices. Market risk comprises three types of risk:
accumulated depreciation and impairment losses, adjusted foreign currency risk, price risk and interest rate risk.
for any remeasurement of lease liabilities. Right-of-use assets Financial instruments affected by market risk include loans
are depreciated on a straight-line basis over the shorter of and borrowings, deposits, trade receivables, trade payables,
the lease term and the estimated useful lives of the assets. accrued liabilities and derivative financial instruments.
The group applies IAS 36 Impairment of Assets to determine (a) Foreign currency risk
whether the right-of-use asset is impaired and to account for The group is composed of businesses with various functional
any impairment loss identified. currencies including USD, GBP and DKK. The group is
exposed to foreign exchange risk for series of payments in
The group recognizes its proportionate share of the lease other currencies than the functional currency, mainly related
liability where it is a non-operator and considered to share to the ratio between NOK and USD, DKK and USD, and GBP
the primary responsibility of the lease payments. and USD. The Group’s statement of financial position
includes significant assets and liabilities which are recorded
1.27 CONSOLIDATED STATEMENT OF CASH FLOWS in other currencies than the Group’s functional currency. As
such the group’s equity is sensitive to changes in foreign
The consolidated statement of cash flows is prepared exchange rates. See Note 15 Non-current receivables, trade
according to the indirect method. See note 2.12 for the receivable and other current receivables, Note 17 Restricted
definition of “Cash and cash equivalents”. Cash, Bank Deposits, Cash and Cash Equivalents, Note 18
Financial instruments, Note 21 Asset retirement obligation,
1.28 SUBSEQUENT EVENTS Note 23 Borrowings and Note 24 Trade payables and other
payables, Note 28 Contingencies and commitments. A
Events that take place between the end of the reporting decrease in the closing rate of NOK, EUR and DKK with 10
period and the date of issuance of the quarterly or annual percent compared to USD would have the following impact
accounts, will be considered if the event is of such a nature on financial assets, financial liabilities and equity:
that it gives new information about items that were present USD million NOK DKK EUR
on the statement of financial position date. Financial Assets 2 83 1
Financial Liabilities 0 28 1
Effect Net result/Equity 1 55 0
The Company considers the currency risk relating to the

different financial instruments be low, as the main financial
2 FINANCIAL RISK MANAGEMENT items held in a currency other than the functional currency of
the respective components is offset by positions in other
components of the Group. With regards to trade receivables
and payables, the Company deems the risk to be immaterial.

(b) Price risk Liquidity risk
Noreco produces and sells hydrocarbons in Denmark and is The Group has certain financial commitments arising from its
as a result exposed to changes in commodity and oil prices. operations and other agreements entered into which are
The Group has a material oil price hedging programme in expected to be met by liquid assets, proceeds from external
place that mitigates the risk of near-term oil price financing and cash flow from operations. The Group monitors
movements. As of 31 December 2020, Noreco had its liquidity situation continuously to ensure it will be able to
commodity derivatives measured at fair value. A change in meet its financial obligations as they fall due. As of 31
the value directly affects the company’s OCI and recorded December 2020, none of the Group’s interest-bearing debt
equity, and hence the group is exposed to the fair value were falling due within the next 12 months.
development of these financial instruments. Assuming an
increase in the oil price at 31 December 2020 of 10% and Credit risk
assuming this change will have full effect on the whole curve, The groups most significant credit risk arises principally from
the effect on the value of commodity derivatives would have recognised receivables related to the group’s operation. The
the following impact: credit risk arising from the production of oil, gas and NGL is
USD million Equity OCI Net result considered limited, as sales are to major oil companies with
Oil price +10% -19 -19 0 considerable financial resources. The counterparty in
Oil price -10% 19 19 0

derivatives are large international banks and insurance
companies whose credit risk is considered low.
The effect on equity would be equal to the change in value of

2.2 CAPITAL RISK MANAGEMENT
the commodity derivatives. The change in value of hedging
contracts over time will be offset by the realised value of the
The group's objectives when managing capital is to
contract when the hedge instrument matures, therefore the
safeguard the group's ability to continue as a going concern
underlying value to Noreco’s business operations is not
in order to provide return for shareholders and benefits for
impacted by changes in the derivative value at any point in
other stakeholders and to maintain an acceptable capital
time.
structure to reduce the cost of capital.
(c) Interest rate risk

The group monitors the debt with the basis of cash flows,
The Group has loans with fixed and floating interest rates.
equity ratio and the gearing ratio. The group’s debt restricts
Loans with fixed interest rate expose the Group to risk
the payment of dividends until two quarters after the
(premium/discount) associated with changes in the market
completion of the Tyra redevelopment project; subsequent
interest rate. At year-end, the group has a total of USD 1 043
to this date, NOR14 limits dividend payments to 50% of the
million (2019: USD 1 008 million) in interest-bearing debt
group’s net profit after tax for the previous year. See further
(carrying amount), the principal amount was USD 1 097
information regarding borrowings and covenants in Note 23.
million. The Group’s RBL facility has a floating interest rate of
LIBOR + a margin (currently 4%), while the Group’s Bond debt
2.3 FAIR VALUE ESTIMATION
(NOR 13 and NOR 14) have a fixed interest rate exposure. The
reserve-based lending facility is linked to the LIBOR rate as
The Group has certain financial instruments carried at fair
set at the time of redetermination. A variance of +/- 1% in the
value. The different fair value hierarchy levels have been
LIBOR rate would result in +/- USD 7.5 million of interest
defined as follows:
charges to Noreco per annum. For further information about
the Group's interest-bearing debt, see Note 23.
Level 1: Quoted prices (unadjusted) in active markets for
identical assets and liabilities
All bank deposits (USD 456 million) are at floating interest
rates. See note 17 Restricted cash, bank deposits, cash and
The fair value of financial instruments traded in active
cash equivalents for further information about bank deposits.
markets is based on quoted market prices at the statement
The Group considers the risk exposure to changes in market
of financial position date. A market is regarded as active if
interest to be at an acceptable level.

quoted prices are readily and regularly available from an month of production which was protected by the volume
exchange, dealer, broker, industry group, pricing service, or guarantee.
regulatory agency, and those prices represent actual and
regularly occurring market transactions on an arm’s length The fair value of the embedded derivatives is calculated
basis. The quoted market price used for financial assets held based on the Black-Scholes-Merton valuation model. A
by the Group is the current bid price. change in the share price of +/- 10 percent would have the
following impact on the embedded derivates, net result and
Level 2: Inputs other than quoted prices included within level equity:
1 that are observable for the assets or liability, either directly Sensitivity Analysis
or indirectly
Share price (%) 10% -10%
Embedded derivatives USD million (5) 4
The fair value of financial instruments that are not traded in
Effect Net result/Equity USD million (5) 4
an active market (for example, over-the-counter derivatives)
is determined by using valuation techniques. These valuation
techniques maximise the use of observable market data It is evaluated that there is no tax effect of changes in fair
where it is available and rely as little as possible on entity value of the contingent consideration and embedded
specific estimates. If all significant inputs required to fair derivatives. See Note 18 for fair value hierarchy and further
value an instrument are observable, the instrument is information.
included in level 2. If one or more of the significant inputs is
not based on observable market data, the instrument is
included in Level 3.
Specified valuation techniques used to value financial
instruments include: CRITICAL ACCOUNTING ESTIMATES
3 AND JUDGEMENTS
• Quoted market prices or dealer quotes for similar
instruments;
• The fair value of interest rate swaps is calculated as the 3.1 CRITICAL ACCOUNTING ESTIMATES AND
present value of the estimated future cash flows based on ASSUMPTIONS
observable yield curves;
• The fair value of forward foreign exchange contracts is Estimates and judgements are continually evaluated and are
determined using forward exchange rates at the statement based on historical experience and other factors, including
of financial position date, with the resulting value discounted expectations of future events that are believed to be
back to present value; reasonable under the circumstances.
Level 3: Inputs for other assets or liabilities that are not based The estimates and assumptions that have a significant risk of
on observable market data causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year are
In level 3 there are two financial instruments, the embedded addressed below.
derivatives convertible bond and the contingent
consideration (volume guarantee). As the volume guarantee a) Estimated value of financial assets and financial
relates directly to the production of Noreco’s DUC asset liabilities
base, movements in value have a future corresponding effect The volume guarantee from Shell is measured at fair value
in revenue of the same assets. Therefore, the volume through profit and loss. The volumes expected to be received
guarantee represents the minimum production level for under the guarantee have been price hedged and the
which Noreco will receive value. There are no punitive hedging instruments have also been measured at fair value
provisions or otherwise for production above the protected through profit and loss. See note 2.3 for sensitivity analyses.
volume. The fair value of the contingent consideration was The group’s expected oil-production in 2020, excluding the
during 2020 calculated based on a discounted cash flow volume guarantee, has been price hedged using cash flow
model. As of 31.12.2020 the fair value of the contingent hedging derivatives, which have been measured at fair value
consideration was known as December 2020 were the last through OCI. See note 2.1 for sensitivity analyses. The

embedded derivatives in the convertible debt has been d) Depreciation and impairment of fixed assets
recognised separately at fair value through profit and loss. The estimation of the recoverable amount of oil and gas
The value of this embedded derivative has been calculated assets as well as the estimation of available commercially
using the Black-Scholes-Merton valuation model using depletable reserves is subject to significant uncertainty,
assumptions for share price, volatility of share price, and primarily related to future oil and gas price levels. Impairment
other inputs which are subject to significant uncertainty. assessments are made to the extent there are indicators of
reduced values of fixed assets. Unit of production
For financial assets at amortised cost, an assessment is made depreciations are amended on a prospective basis following
on whether objective evidence is present that financial assets regular reserves estimation updates performed by the
or groups of financial assets should be written down. Group.
For more details see note 18 Financial Instruments. 3.2 CRITICAL JUDGEMENTS IN APPLYING THE ENTITY’S
ACCOUNTING POLICIES
b) Income tax
All figures reported in the statement of comprehensive a) Accounting for convertible debt
income and the statement of financial position are based on The Group has issued bonds with conversion rights and other
the group’s tax calculations and should be regarded as embedded derivatives (but the conversion feature is the main
estimates until the tax for the year has been settled. Tax element). The conversion feature has been determined to
authorities can be of a different opinion than the company constitute an embedded derivative and has been separated
including what constitutes exploration cost and continental from the loan contract. The loan element has been
shelf deficiency in accordance with the Petroleum Taxation recognised at amortised cost. At initial recognition the loan
Act. See also Note 13. The tax income in 2019 primarily relates was measured as the residual amount of the proceeds from
to the recognition of prior year deferred tax losses in the bond issue, less issue costs, less the calculated fair value
Denmark due to the increased expected future taxable profit of the conversion feature. The process of determining
from the acquisition of the DUC assets. There is uncertainty whether the conversion feature in the convertible bond
related to the utilisation of these tax assets and regular arrangement should be treated as a liability or an equity
assessments are made. The value has been recognised using component requires the application of significant judgement.
the weighted average tax rate of the various subsidiaries
based on their actual tax positions. The convertible bond is either a financial liability (including
certain embedded derivative features which may require
c) Asset retirement obligation separation) or a compound instrument (ie. such a liability plus
Production of oil and gas is subject to statutory requirements an equity conversion option). The group has assessed that
relating to decommissioning and removal obligation once the holder’s conversion option does not involve receiving a
production has ceased. Provisions to cover these future fixed number of shares by giving up a fixed stated principal
decommissioning and removal expenditures must be amount of bond, hence the group has assessed this
recognised at the time the statutory requirement arises. The instrument is not a compound instrument with an equity part.
costs will often incur sometime in the future, and there is Further multiple embedded derivatives have been identified
significant uncertainty attached to the scale and complexity in the host contract that has been assessed is not readily
of the decommissioning and removal involved. Estimated separable and independent of each other as such are treated
future costs (estimated based on current costs inflated) are as a single compound embedded derivative. Also, the fair
based on known decommissioning and removal technology, value measurement of the conversion feature using the
expected future price levels, and the expected future Black-Scholes-Merton valuation model, requires significant
decommissioning and removal date, discounted to net judgement when selecting and applying the required
present value using a risk-free rate adjusted for credit risk. assumptions.
Changes in one or more of these factors could result in
changes in the decommissioning and removal liabilities. See b) Purchase price allocation
note 21 ‘Asset Retirement Obligations’ for further details The group applies the acquisition method to account for
about decommissioning and removal obligations. business combinations. Identifiable assets acquired, and

liabilities and contingent liabilities assumed in a business impairment write-downs. This is the basis for the goodwill
combination are measured initially at their fair values at the impairment recognised in 2019 as discussed in note 9 and
acquisition date. As objective stand-alone values of an Note 10. Similarly, previously unrecognised deferred tax
acquired target may be different from subjective entity assets have been recognised on the basis of estimated future
specific (acquiror) values, the Group could be willing to pay taxable income from acquired businesses, see note 13.
more than stand-alone values for certain assets acquired in a Significant judgements are required to be applied in such
business combination, and hence, incur immediate purchase price allocations.
4 REVENUE
USD million 2020 2019*

Sale of oil 528 305
Sale of gas and NGL 31 26
Other income 8 2
Total Revenue 566 333
* Figures reflects the contribution from the acquired DUC assets from 1 August 2019
Oil - lifted volumes (mmbbl) 7.90 3.98
Realised oil price USD/bbl 66.8 76.7
Noreco’s realised price was USD 66.8 per bbl of oil lifted during 2020.
Sale of oil amounted to 528 in 2020. Part of the sale were invoiced under the Company’s oil price contracts with Shell
International Trading and Shipping Company Limited (“STASCO”) that were put in place in conjunction with the acquisition.
The STASCO oil price contracts are settled on a physical basis and Noreco’s ability to utilise this is determined by, amongst
other things, the Company’s actual lifting schedule for the DUC assets. Under the STASCO oil price contracts, at the start
2020 Noreco had an opening balance of hedges from prior periods that had not been utilised. Based on actual liftings in
2020, the Company has now utilized all the oil price contracts with STASCO.
During 2020, Noreco recognised the benefit of price hedges that were put in place with financial institutions in the market as
revenue, when these price hedges matches the physical sale of oil. Price hedges in excess of actual liftings are treated as
financial income based on the required accounting treatment for these instruments during the period.
Revenue per customer 2020 2019*
Shell Trading International 91.8 % 90.8 %

Orsted Salg & Service AS 5.4 % 6.7 %
Natixis 1.4 % 0.1 %
Shell Energy Europe Limited 1.4 % 1.6 %
INEOS E&P AS 0.0 % 0.5 %
Dansk Shell AS 0.0 % 0.2 %
Total Revenue 100.0 % 100.0 %

5 PRODUCTION EXPENSES

Direct field opex (177) (80)
Tariff and transportation expenses (44) (24)
Production G&A (56) (23)
Field operating cost (277) (127)
Total produced volumes (mmboe) 10.4 5.5

In USD per boe (26.6) (23.1)
Adjustments for:
Change in inventory position 3 (16)
Over/underlift of oil and NGL (0) 7
Insurance & Other (21) (6)
Accruals/periodisation - (6)
Exceptional costs - (23)
Stock scrap 1 -
Production expenses (295) (171)
Production expenses for the year directly attributable to the lifting and transportation to market of Noreco’s oil and gas
production is in total USD 277 million, which equates to USD 26.6 per boe produced during 2020. 2020 was a full year of
DUC operations compared to only 5 months in 2019. Actual opex was lower than expected due to COVID 19 mitigations,
partly offset by a weakened USD to DKK exchange rate.
6 EXPLORATION AND EVALUATION EXPENSES

Acquisition of seismic data, analysis and general G&G costs - -
Exploration wells capitalised in previous years - -
Dry exploration wells this period - -
Other exploration and evaluation costs (2) (1)
Total exploration and evaluation costs (2) (1)

7 PERSONNEL EXPENSES AND REMUNERATION

Salaries (8) (6)
Social security tax (1) (1)
Pension costs 20 (0) (0)
Costs relating to share based payments 25 (2) (8)
Other personnel expenses (0) (1)
Total personnel expenses (12) (16)
Average number of employees 29 15
COMPENSATION TO KEY MANAGEMENT*
*Compensation in the form of remuneration and bonus is included in the year paid. Other compensations is included as incurred.

1) Chief Executive Officer David B. Cook employed 1 July 2020.
2) EVP, Investor Relations & Communications Cathrine Torgersen employed 1 January 2020.
3) EVP, People & Capability Hege Hayden employed 1 October 2020.
4) Chief Operating Officer and Managing Director Atle Sonesen employed 1 November 2019 and left the company in
October 2020.
5) Chief Operating Officer Sjur Talstad employed 15 November 2018 and left the company in August 2019.
6) Group Account Manager Silje Hellestad left the company in September 2019.
7) Other remuneration relates to the benefit of free phone, free newspaper and insurance.
8) Expense recognised (not cash) related to the share-based compensation. For more information on share options,
please see note 25.
The Company has not issued any loans or acted as a guarantor for directors or management. Compensation in NOK and GBP
have been converted to USD by using yearly average rate for 2020 and 2019 respectively.
1) Chief Operating Officer and Managing Director Atle Sonesen employed 1 November 2019.
2) Chief Financial Officer Euan Shirlaw employed 1 October 2019.
3) Frederik Rustad was constituted Managing Director with effect from 3 April 2018 to 1 November 2019. Compensation
includes salaries for the whole year.
4) Chief Operating Officer Sjur Talstad employed 15 November 2018 and left the company in August 2019.
5) Group Account Manager Silje Hellestad left the company in September 2019.
6) Other remuneration relates to the benefit of free phone, free newspaper and insurance.
7) Expense recognised (not cash) related to the share-based compensation. For more information on share options, please
see note 25.
The Company has not issued any loans or acted as a guarantor for directors or management. Compensation in NOK and GBP
have been converted to USD by using yearly average rate for 2019.

COMPENSATION TO BOARD OF DIRECTORS
1) Lars Purlund resigned from the Board 14 April 2021.

2) Bob McGuire was elected as a new Board member at the EGM that took place 2 March 2020.
3) Total compensation includes for the Chair and each Director payment for services rendered as consultancy in
accordance with consultancy agreement approved by General meeting in 2019.
4) Expense recognised (not cash) related to the share-based compensation. For more information on share options,
please see note 25.
5) The number of shares owned by board members is allocated between private shareholding and shareholding through
companies controlled by board members. Number of shares owned as of 31 December 2020.
The Company has not issued any loans or acted as a guarantor for directors or management. Compensation in NOK have been
converted to USD by using yearly average rate for 2020 and 2019 respectively.

1) Chris Bruijnzeels, Colette Cohen and Yves-Louis Darricarrére were elected as new Board members at the EGM that took
place 7 August 2019, with effect from 15 September 2019.
2) John Phillip Madden III resigned from the board from 15 September 2019.
3) Expense recognised (not cash) related to the share-based compensation. For more information on share options, please
see note 25.
4) Includes for the Chair and each Director payment for services rendered as consultancy in accordance with consultancy
agreement approved by General meeting in 2016. In addition, it includes Closing fee in relation to the Acquisition that
took place in July 2019.
The Company has not issued any loans or acted as a guarantor for directors or management. Compensations in NOK have
been converted to USD by using yearly average rate for 2019.
DIRECTORS’ FEES
The annual remuneration to board members is decided on by the Shareholder's Meeting.
The Chair of the Board receives an annual remuneration of USD 500,000 and the other shareholder elected members of the
board receive an annual remuneration of USD 60,000. All the remunerations are paid quarterly.
On the Extraordinary General Meeting that took place 7 August 2019, it was agreed that the Chairman of the Board shall be
provided with a discretionary bonus of USD 200,000, based on the achievement for the Company. The consultancy agreement
between Riulf Rustad (though Ousdal AS) and the Company was terminated. Lars Purlund (through S&U Trading) has a
consultancy agreement to provide services to the Company on an hourly basis at a cost of USD 300 per hour.
In addition to the above, Board members are reimbursed for travel expenses and other expenses in connection with company
related activities.
BOARD OF DIRECTORS’ STATEMENT ON REMUNERATION TO THE MANAGING DIRECTOR AND THE EXECUTIVE OFFICERS
In accordance with section 6-16a of the Norwegian Public Limited Liability Companies Act, the board of directors of Norwegian
Energy Company ASA (“Noreco” or the “Company”) has prepared a statement related to the determination of salary and other
benefits for the Chief Executive Officer and other key executive officers.
I GENERAL ON EXECUTIVE REMUNERATION

The total compensation for the Chief Executive Officer and executive management shall be competitive, reflect the
responsibilities and effort required, reward success and not the opposite, and ensure alignment of interest with shareholders.
The remuneration for the Chief Executive Officer and executive management include fixed and variable elements. The fixed
element consists of a base salary and other benefits, such as free mobile phone and life, accident and sickness insurance in
accordance with normal practice in the oil industry. Variable elements of remuneration may be used, or other special
supplementary payments may be awarded than those mentioned above if this is considered appropriate.
II BINDING PRINCIPLES RELATED TO SHARE PRICE DEVELOPMENTS

At the extraordinary general meeting held on 8 November 2018 (and later amended) the Company implemented a share option
programme. The Board of Directors was authorized to grant options up to a total of 1 510 000 shares in the Company as part
of a new incentive program. The options may be granted to the members of the Board, key personnel and employees of the
Company. After award, the options must be exercised within 5 years after which they expire.
In May 2020, the beneficiaries under the share option programme was offered to accept amended terms of (i) a reduced strike
price of NOK 160 per share and (ii) a reduction in the number of options granted of 30%. Following this, the option programme
was reduced from a total of 1,510,000 shares to 1,190,500 shares in the Company and the outstanding options at the time was
reduced by 319,500 to 745,500.

The board of directors of the Company has in 2020, adjusted for the amendments mentioned above, allocated 384,000
options with a strike price of NOK 160 per share. In addition, 70,000 options as a result of not being vested by the
beneficiary upon resignation, has been relinquished to the Company. Options vest over three years, with one-third per year.
In addition to this option programme, the general meeting resolved on 7 August 2019 a share option programme in which
Noreco may issue one option for each share purchased by any board member (except of Riulf Rustad and Lars Purlund) up to
a total of 10,000 shares for each Board Member.
III REMUNERATION POLICY

Remuneration to the Managing Director and executive management shall be evaluated and may be amended regularly by the
Board of Directors to ensure that salaries and other benefits are based on the above guidelines and principles and in
accordance with the purpose of the total compensation package for the Managing Director mentioned above. Remuneration
to the managing directors and the executive management for 2020 has been in line with the board of directors’ statement on
remuneration to the managing director and other key executive officers as approved by the annual general meeting held in
2020.
Remuneration policy for Executives according to the amendment of the Norwegian Public Limited Liability Companies Act §6-
16a will be presented for voting to the annual general meeting in 2021 and subsequently published on www.noreco.com,
pursuant to applicable legislation”.
8 OTHER OPERATING EXPENSES
Premises (0) (0)

IT expenses (1) (1)
Travel expenses (0) (0)
Office cost (1) (0)
Consultant fees (5) (14)
Other operating expenses (0) (4)
Total other operating expenses (8) (19)
USD 1000, excl. VAT 2020 2019
Auditor's fees (763) (337)

Other assurance service (1) (149)
Total audit fees (765) (486)

9 INTANGIBLE ASSETS
INTANGIBLE ASSETS AT 31 DECEMBER 2020

Capitalized
exploration Contract -
USD million expenditures own use Licence Goodwill Total
Acquisitions
Acquisition costs 01.01.20 - 128 186 266 580
Additions 2 - - - 2
Acquisition costs 31.12.20 2 128 186 266 581
Accumulated depreciation and write-downs

Accumulated depreciation and write-downs 01.01.20 - (42) (5) (266) (312)
Depreciation / amortization - (86) (8) - (95)
Other items - - - - -
Currency translation adjustment - - - - -
Book value 31.12.20 2 - 173 - 175
INTANGIBLE ASSETS AT 31 DECEMBER 2019

Capitalized
exploration Contract -
USD million expenditures own use Licence Goodwill Total
Acquisitions
Acquisition costs 01.01.19 - - - - -
Acquisitions through business combination - - 186 266 452
Additions - 128 - - 128
Currency translation adjustment - - - (0) (0)
Acquisition costs 31.12.19 - 128 186 266 580

Accumulated depreciation and write-downs 01.01.19 - - - - -
Depreciation / amortization - (42) (5) - (46)
Impairment - - - (266) (266)
Currency translation adjustment - - - 0 0
Book value 31.12.19 - 86 181 - 268
Impairment of USD 266 million is related to the impairment of goodwill during 2019. Goodwill was generated as a result of the
acquisition of SOGU and represents the difference between the fair value of the consideration and the net assets acquired.
As a result of the goodwill impairment test being performed on a standalone basis and not considering the contribution from
our existing Danish tax position, Noreco was required to fully impair this goodwill as it would not be recovered without
integration into the broader Noreco group. However, Noreco attributed more value to the transaction than the fair value of
the net assets acquired as these existing tax losses carried forward may be utilized to offset future taxes payable and create
value beyond the value on a standalone basis as per the goodwill impairment test. As the activities will be operated
separately and consequently not merged into other Noreco activities, no other activities will benefit from the acquisition and
consequently, no part of the goodwill shall be allocated to other parts of the Noreco group. No amount of goodwill is
deductible for tax purposes.

10 ACQUISITION OF SUBSIDIARY
On 31 July 2019 the Company’s acquisition of Shell Olie- og Gasudvinding Danmark B.V. was completed. Following the
acquisition Noreco has a 36,8% interest in the Danish Underground Consortium (DUC) with 11 producing fields and related
infrastructure. The transaction was considered to be a business combination and has been accounted for using the
acquisition method of accounting as required by IFRS 3.
A provisional purchase price allocation (PPA) was performed in the third quarter of 2019 and a final PPA has been completed
in the third quarter of 2020. No adjustments have been made to the estimated fair values of the identified assets and
liabilities which were measured at the acquisition date. However, one commodity contract which were provisionally
identified as financial assets, measured at USD 128 million in the provisional PPA, and for which subsequent value changes
have been recognized in profit or loss, have been reassessed and now determined to constitute intangible assets measured
at a fair value of USD 128 million.
The basis for the revised determination is the fact that the commodity contract to which the fair values relate have now been
determined to constitute ‘normal purchase or sale’ or so called ‘own use contracts’ which are exempted from IFRS 9, rather
than financial assets as provisionally assumed. Subsequent to initial recognition these intangible assets are, in these restated
financial statements, being amortized over the period of lifting of the underlying commodity volumes. The adjustment in total
revenue is related to the timing difference between when the value of each hedge is set and when they are ultimately
utilized. Total revenue, in these restated financial statements, reflects only the physical volumes delivered. See below table
for a reconciliation of the reported and restated financial statement line items.
Comparative consolidated statement of comprehensive income
YTD YTD 2019

All figures in USD million 2019 Adj restated
Operating result (EBITDA) 127 - 127

Depreciation (70) (42) (112)
Impairment of goodwill (266) - (266)
Net operating result (EBIT) (209) (42) (251)
Financial income 177 (24) 152

Financial expenses (150) 50 (100)
Net financial items 27 25 52
Result before tax (EBT) (182) (16) (199)
Change in deferred tax / - asset 400 14 414

Net result for the period 218 (2) 215

Comparative Consolidated Statement of Financial positions
31.12.2019
All figures in USD million 31.12.2019 Adj restated
Non-current assets
Licence and capitalised exploration expenditures 181 86 268
Deferred tax assets 471 (16) 455
Property, plant and equipment 1,550 1,550
Right of Use asset 1 1
Restricted cash 115 115
Other non-current financial investments - -
Contingent consideration - volume protection 17 17
Derivative instruments 6 - 6
Total non-current assets 2,342 71 2,413
Current assets
Derivative instruments 57 (57) -
Contingent consideration - volume protection 104 104
Trade receivables and other current assets 133 133
Restricted cash - -
Bank deposits, cash and cash equivalents 286 286
Total current assets 580 (57) 523
Total assets 2,921 14 2,935
31.12.2019
All figures in USD million 31.12.2019 Adj restated
Equity
Share capital 30 30
Other equity 546 14 560
Total equity 575 14 589
Total non-current liabilities 1,988 1,988
Total liabilities 2,346 2,346

Total equity and liabilities 2,921 14 2,935

A. Consideration transferred
The following table summarizes the acquisition-date fair value of the total purchase price.
USD million
Initial Cash payment 2018 40

Cash payment 31.12.2018 40
Cash at Completion 1,104

Volume guarantee refund until June 2019 (33)
Total Consideration at completion 2019 1,071
Settlement of prepaid cost – reimbursed to seller 5
Volume guarantee for July 2019 (10)
Locked Box Interest 63
Total Cash payment 31.12.19 1,170
0
Adjustments
Deferred payment 25
Volume guarantee market value (81)
Total Purchase price 1,114
B. Identifiable assets acquired and liabilities assumed

A purchase price allocation (PPA) has been performed and all identified assets and liabilities have been measured at the
acquisition date at their fair values in accordance with the requirements of IFRS 3. The fair values of the identifiable assets
and liabilities in the transaction at the date of the acquisition have been estimated on a provisional basis as follows:
Provisional
USD million SOGU SOGUP Adj SOGU Final PPA
PPA
Assets
Tangible and intangible fixed assets 1,712 2 1,714 128 1,842
Deferred tax assets 2 1 3 - 3
Financial assets at fair value 128 - 128 (128) (0)
Inventories 31 - 31 - 31
Stock 30 - 30 - 30
Net working capital 99 24 123 - 123
Total Assets 2,002 27 2,029 - 2,029
Liabilities
Asset retirement obligation (918) (1) (919) - (919)
Trade and other payables (118) (0) (118) - (118)
Tax payables (144) - (144) - (144)
Total Liabilities (1,180) (1) (1,181) - (1,181)
- -
Total identifiable net assets at fair value 848 - 848
Fair value is based on an NPV calculation on a debt / cash free basis.

D. GOODWILL
USD million
Total consideration 1,114
Total identifiable net assets at fair value, post tax 848
Goodwill at acquisition 266
Impairment (266)
Goodwill 31.12.19 -
11 PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT AT 31 DECEMBER 2020

Asset under Production Machinery &
USD million construction facilities Pipelines equipment Total
Acquisition costs 01.01.20 376 1,240 1 1 1,619
Additions 232 3 - 1 236
Acquisition of abandonment asset through business combination - 15 - - 15
Currency translation10adjustment - 0 0 0 0
9
Depreciation - (97) (0) (0) (98)
Currency translation adjustment - (0) (0) (0) (0)
Book value 31.12.20 608 1,094 1 1 1,704
PROPERTY, PLANT AND EQUIPMENT AT 31 DECEMBER 2019

Asset under Production Machinery &
USD million construction facilities Pipelines equipment Total
Acquisition costs 01.01.19 - 3 - 1 4
Acquisitions though business combination 300 309 1 - 610
Additions 76 10 - 0 86
Acquisition of abandonment asset through business combination - 918 - - 918
Currency translation adjustment - 0 0 0 0

Accumulated depreciation and write-downs 01.01.19 - (2) - (1) (3)
Depreciation - (66) (0) (0) (66)
Currency translation adjustment - (0) (0) (0) (0)
Book value 31.12.19 376 1,173 1 0 1,550

12 FINANCIAL INCOME AND EXPENSES
Financial Income

Value adjustment derivatives and hedging contracts unrealized 1)
29 29
Value adjustment of embedded derivatives2) 27 9
Value adjustment - volume protection 3)
- 80
Value adjustment - FX Contract 3 -
Hedge income realized 24 -
Interest income 2 1
Change in fair value of bond debt 0 1
Gain on repurchase of bonds - 1
Foreign exchange gains 18 31
Other financial income - 0
Total financial income 103 152
Financial Expenses

Utilized derivatives (3) -
Unrealized loss derivatives - (12)
Value adjustment - volume protection3) (4) -
Interest expense from bond loans (39) (13)
Interest expense from bank debt (47) (24)
Interest expenses current liabilities (0) (0)
Accretion expense related to asset retirement obligations (36) (15)
Loss on repurchase of bonds - (1)
Foreign exchange losses (45) (32)
Other financial expenses (3) (3)
Total financial expenses (177) (100)
1) Fair value adjustment based on the value of bank hedging contracts deemed inefficient (i.e. above physical liftings that mature in the
future).
2) Fair value adjustment of the embedded derivatives of the convertible bond.
3) Fair value adjustment of the volume protection – contingent consideration based on the change in future market pricing expectations
during the remaining period of the volume hedging agreement with Shell.

13 TAX
TAX RATES
Producers of oil and gas on the Danish Continental Shelf are subject to the hydrocarbon tax regime under which, income derived from the
sale of oil and gas is taxed at an elevated 64 %. Any income deriving from other activities than first-time sales of hydrocarbons is taxed at the
ordinary corporate income rate of currently 22 %. The 64 % is calculated as the sum of the “Chapter 2” tax of 25% plus a specific
hydrocarbon tax (chapter 3A) of 52%, in which the 25% tax payable is deductible.
Income generated in Norway and United Kingdom is taxed at current corporate tax rates.
TAX EXPENSE
USD million
Income tax profit/loss (Danish corporate income tax and hydrocarbon tax) 2020
Income tax current year (9)
Income tax for prior years 17
Current income tax 8
Deferred tax adjustment 52
Prior year adjustment, deferred tax (25)
Deferred tax expense 27
Tax (expense/ income 35
Income tax in profit/loss is solely derived from the group's activities on the Danish continental shelf, of which the major part is subject to the
elevated 64% hydrocarbon tax.
Tax (expense)/income related to other comprehensive income

Cash flow hedges (51)
Tax (expense)/income related to other comprehensive income (51)
Income tax on OCI is related to the unrealised fair value changes in derivatives designated in cash flow hedges. To the extent derivates are
associated with the sale of oil and gas, result from cash flow hedges are subject to 64 % hydrocarbon tax.
Reconciliation of nominal to actual tax rate: Hydrocarbon tax Corporate tax Total
2020 2020 2020
Income (loss) before tax 9 (27) (18)
Calculated 64%/ 22% tax on profit before tax 6 64% (6) 22% (0)
Tax effect of:

Prior year adjustment 9 104% (1) 4% 8
Transfer of loss to 22 % tax (9) -98% - 0% (9)
Fx adjustment of net operating losses carried forward in DKK (22) -245% - 0% (22)
Investment uplift on CAPEX projects1) (30) -344% - 0% (30)
Permanent differences2) 2 23% - 0% 2
No recognition of tax loss in Norway - 0% 15 -56% 15
Tax expense (income) (44) -496% 8 -30% (35)
The tax cost in the hydrocarbon is significantly positively impacted by the 39 % investment uplift on the Tyra Redevelopment project.
1)
expenses.
2)
The permanent differences mainly relate to unrealized loss on the contingent consideration and minor non-deductible expenses.

Reconciliation of nominal to actual tax rate continues:
Other comprehensive income before tax 80 2 82
Expected tax on other comprehensive income before tax (51) 64% (0) 22% (52)
Tax effect of:
Non-taxable currency translation adjustment - 1
Tax payables (51) 64% 1 22% (51)
Current income tax payable

Tax payable relates to the Group's entities in Denmark. The amounts payable as of 31.12.20 were:
Hydrocarbon tax pertaining to pre-acquisition period 2019 (16)
Corporate tax for 2019 -
Corporate tax for 2020 (11)
Tax payables (27)
Current income taxes for current and prior periods are measured at the amount that is expected to be paid to or be refunded from the tax
authorities, as at the balance sheet date. Due to the complexity in the legislative framework and the limited amount of guidance from
relevant case law, the measurement of taxable profits within the oil and gas industry is associated with some degree of
uncertainty. Uncertain tax liabilities are recognised with the probable value if their probability is more likely than not.
As of 31 December 2020, the Company has provided an estimated USD 16 million pertaining to hydrocarbon tax in the part of pre-
acquisition period, which is not indemnified by the Seller.
DEFERRED TAX
Deferred tax assets are measured at the amount that is expected to result in taxes due to temporary differences and the value of tax losses.
The recognized deferred tax asset is allocable to the following balance sheet items, all pertaining to the Group's activities on the Danish
Continental Shelf:
USD million
Effect
Effect
01.01.2020 recognized
recognized 31.12.2020
(restated) in
in OCI
Deferred tax and deferred tax asset profit/loss
Property, plant and equipment 592 (10) - 582
Intangible assets, licenses 19 4 - 23
Inventories and receivables 19 3 - 22
ARO provision (572) 11 - (561)
Other assets and liabilities 5 (5) - -
Tax loss carry forward, chapter 2 tax (25%) (46) 25 20 (1)
Tax loss carry forward, chapter 3a tax (52%) (473) (56) 31 (498)
Deferred tax asset, net (455) (28) 51 (432)
TAX LOSS CARRYFORWARDS

Tax losses are recognized in accordance with the expected utilisation hereof in subsequent income years based on the current business
outlook and economic projections.
Due to the limited taxable activity in UK and Norway, corporate tax losses in these jurisdictions are not capitalized.
Tax losses in Denmark under the hydrocarbon tax regime may be carried forward indefinitely and the utilisation is not subject to an annual
cap. Losses are carried forward in DKK.

Tax losses carried forward, Denmark Million DKK
Chapter 2 Hydrocarbon tax (25 %) 11
Chapter 3a Hydrocarbon tax (52%) 6,270
Tax losses carried forward, Norway Million NOK
Corporate tax Norway (22%) 873
Tax losses carried forward, UK Million GBP
Trade losses, UK (hydrocarbon) 74
Pre-trading capital expenditure, UK (hydrocarbon) 40
14 EARNINGS PER SHARE
Earnings per share are calculated by dividing the profit attributable to ordinary shareholders of the parent company by the
weighted average number of ordinary shares in issue during the year. Share options are out of the money as per 31.12.2020
and hence have no dilutive effect.

Profit (loss) attributable to ordinary shareholders from operations 17 215
Profit (loss) basis for fully diluted shareholders from operations 13 214
Shares issued 1 January 24,549,013 7,194,730

Shares issued during the year - 17,354,283
Share buyback (438,161) -
Shares issued at 31 December 24,110,852 24,549,013
Weighted average number of shares (basic) 24,176,476 14,740,004
Adjustment convertible bond loan 10,930,190 2,597,030

Weighted average number of shares (diluted) 35,106,666 17,337,034
Earnings per share (USD)

Earnings per share 0.7 14.6
Diluted earnings per share 0.4 12.4

15 NON-CURRENT RECEIVABLES, TRADE RECEIVABLES AND OTHER CURRENT ASSETS
Non-current assets
Contingent consideration – volume protection - 17
Total non-current receivables - 17
Current assets
Contingent consideration – volume protection 15 104
Trade receivables 51 2
Prepayments 23 31
Other receivables 8 63
Total trade receivables and other current receivables 96 201
AGEING ANALYSIS OF TRADE RECEIVABLES ON 31 DECEMBER 2020
Past due
USD million Total Not past due > 30 days 30-60 days 61-90 days 91-120 days > 120 days
Trade receivables 51 51 0 - - - -
Total 51 51 0 - - - -
AGEING ANALYSIS OF TRADE RECEIVABLES ON 31 DECEMBER 2019
Past due
USD million Total Not past due > 30 days 30-60 days 61-90 days 91-120 days > 120 days
Trade receivables 2 0 - - 1 - 0
Total 2 0 - - 1 - 0

16 INVENTORIES
Product inventory, oil 18 15

Other stock (spares & consumables) 21 22
Total inventories 40 36
17 RESTRICTED CASH, BANK DEPOSITS, CASH AND CASH EQUIVALENTS
Non-current assets
Restricted cash pledged as security for abandonment obligation related to Nini/Cecilie 71 65
Restricted cash pledged as security for cash call obligations towards Total1) 125 50
Other restricted cash and bank deposits (Bond holder pledge account, Withholding tax etc.) - -
Total non-current restricted cash 196 115
Current assets
Unrestricted cash, bank deposits, cash equivalents 259 286
Total bank deposits 456 401

1) Noreco has made a USD 125 million deposit into a cash call security account in accordance with a cash call security
agreement with Total E&P Denmark A/S as operator of the DUC. In January 2021 the escrow account will increase by
USD 15 million, to a total of USD 140 million.

FINANCIAL INSTRUMENTS
18 18.1 FAIR VALUE HIERARCHY
The table below analyses financial instruments carried at fair value, by valuation method.
The different levels have been defined as follows:
Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or
indirectly.
Level 3 Inputs for the asset or liability that are not based on observable market data.
On 31.12.2020
USD million Level 1 Level 2 Level 3 Total
Assets
Financial assets at fair value through profit or loss
– Contingent considerations - - 15 15
- Derivative instruments - 3 - 3
Financial assets at fair value hedging instruments
Total assets - 60 15 75
Liabilities
Financial liabilities at fair value through profit or loss
– Derivative instruments - - - -
– Embedded derivatives convertible bond - - 18 18
– Derivative instruments - 7 - 7
Total liabilities - 7 18 25
On 31.12.2019
USD million Level 1 Level 2 Level 3 Total
Assets
Financial assets at fair value through profit or loss
– Contingent considerations - - 121 121
- Derivative instruments - - - -
Total assets - 6 121 127
Liabilities
Financial liabilities at fair value through profit or loss
– Embedded derivatives convertible bond - - 45 45
Total liabilities - 29 45 73

18.2 FINANCIAL INSTRUMENTS BY CATEGORY
Financial Assets at fair Fair value -

On 31.12.20 assets at value through hedging
USD million amortised cost profit or loss instruments Total
Assets
Contingent considerations - 15 - 15
Derivative instruments - 3 57 60
Trade receivables and other current assets 81 - - 81
Restricted cash 196 - - 196
Bank deposits, cash and cash equivalents 259 - - 259
Total 537 18 57 612
Financial Liabilities at fair Fair value -

liabilities at value through hedging
Liabilities
Derivative instruments - - 7 7
Embedded derivative convertible bond - 18 - 18
Convertible bond loans 131 - - 131
Senior unsecured bond loan 169 - - 169
Reserve based lending facility 719 - - 719
Deferred consideration 25 - - 25
Lease liability 1 - - 1
Trade payables and other current liabilities 286 - - 286
Total 1,330 18 7 1,355
Financial Assets at fair Fair value -

On 31.12.2019 assets at value through hedging
Assets
Contingent considerations - 121 - 121
Derivative instruments - - 6 6
Trade receivables and other current assets 96 - - 96
Restricted cash 115 - - 115
Bank deposits, cash and cash equivalents 286 - - 286
Total 497 121 6 624

Financial Liabilities at fair Fair value -
liabilities at value through hedging
Liabilities
Derivative instruments - 4 25 29
Embedded derivatives convertible bond - 45 - 45
Convertible bond loans 108 - - 108
Senior unsecured bond loan 168 - - 168
Reserve based lending facility 707 - - 707
Deferred consideration 25 - - 25
Lease liability 1 - - 1
Trade payables and other current liabilities 191 - - 191
Total 1,201 49 25 1,274
18.3 FINANCIAL INSTRUMENTS — FAIR VALUES
Set out below is a comparison of the carrying amounts and fair value of financial instruments as on 31 December 2020:
Total amount Carrying Fair

USD million outstanding* Amount Value
Financial assets
Contingent Consideration 15 15
Cash flow hedge 60 60
Trade receivables and other current assets 81 81
Restricted cash 196 196
Bank deposits, cash, cash equivalents and quoted shares 259 259
Total 612 612
Financial liabilities
Derivatives and Cash flow hedge 7 7
Embedded derivative convertible bond 18 18
Convertible bond loans 171 131 153
Senior unsecured bond loan 175 169 175
Reserve based lending facility 751 719 751
Deferred consideration 25 25
Lease liability 1 1
Trade payables and other current liabilities 286 286
Total 1,355 1,416
* Total amount outstanding on the bonds and under the RBL facility
As a result of the Transaction, Noreco had a liquid volume protection agreement with Shell (“volume protection”) that, from
signing of the Sales and Purchase Agreement (“SPA”) related to the Transaction until the end of 2020 (the “Protection Period”),
provided a liquid production guarantee at levels above the Company’s current forecasts. To the extent that actual production
levels were below the pre-agreed level in the Protection Period, Noreco received cash payment from Shell. The fair value of
the volume guarantee was recognized as a reduction in the acquisition purchase price. Any changes to the fair value have
been recognized through profit and loss.

The convertible bond loan has been determined to contain embedded derivatives which are accounted for separately as
derivatives at fair value through profit or loss, while the loan element subsequent to initial recognition is measured at amortized
cost, a total of USD 4.5 million in transaction cost is included in the amortized cost. The embedded derivative is valued on an
option valuation basis, the carrying value is USD 18 million (initial value USD 54 million). As a result of the buyback of 299,925
shares at a price of NOK 242 per share on 23 January 2020, the conversion price for the NOR13 subordinated convertible bond
issue was adjusted in accordance with the bond terms, from USD 29.3398 to USD 28.9734, effective from the trade date of
the purchase of shares. The fair value calculation for the option portion of the NOR13 bond includes this update to the
conversion price.
The following table list the inputs to the model used to calculate the fair value of the embedded derivatives:
2020
Valuation date (date) 31 Dec 20
Agreement execution date (date) 24 Jul 19
Par value of bonds (USD) 171,042,171
Reference share price at time of agreement (NOK) 232
Fair value at grant date (USD) 53,942,754
PIK interest rate (%) 8.00%
Expected life (years) 2.9
Number of options (#) 5,903,421
Conversion price (NOK) 238
Fixed FX rate of agreement (USD:NOK) 8.180
Risk-free rate (based on government bonds) (%) 0.2%

Expected volatility (%) 50.42%
Model used Black - Scholes - Merton
The RBL facility is measured at amortized cost, presented net of a total of USD 42 million in transaction cost. Transaction costs
are deducted from the amount initially recognised and are expense over the period during which the debt is outstanding under
the effective interest method.
The senior unsecured bond loan is measured at amortized cost, presented net of a total of USD 7.6 million in transaction costs
are deducted from the amount initially recognised.
18.4 HEDGING
The Group actively seeks to reduce the risk it is exposed to regarding fluctuating commodity prices through the establishment
of hedging arrangements. Noreco applied hedge accounting from 1 October 2019. To the extent more than 100% of the
projected production is hedged any value adjustments to the instruments covering in excess of 100% are considered
ineffective and the value adjustment is treated as a financial item in the Income Statement. The ineffective amount in 2020
charged to financial items in the Income Statement were a loss of USD 1 million. Time Value related to hedging arrangements
is considered insignificant and generally the valuation of the instruments do not take into consideration the time value.
Noreco has to date executed this policy in the market through a combination of forward contracts and options, and in
addition benefits from the risk mitigation elements inherent in the Transaction.
Under its RBL facility, Noreco has a rolling hedge requirement based on a minimum level of production corresponding to the
RBL banking case forecast. Due to the volatile oil market conditions in 2020, Noreco requested and received a waiver from its
RBL bank syndicate relating to the hedging requirements in the 24 to 36 months forward period.

In Q1 2021 Noreco has entered into additional forward contract covering some of the 2023 production, contracts entered into
after 31 December 2020 are not included in the table below.
Maturity
Less than 1 to 3 3 to 6 6 to 9 9 to 12 More than
As at 31.12.2020
1 month months months months months 12 months
Commodity forward sales contracts:

Notional quantity (in mbbl) - 1,569 1,669 1,591 1,441 4,260
Notional amount (in USD million) - 88 93 88 81 237
Average hedged sales price (in USD per bbl) - 56 55 55 56 56
Call options contracts:
Notional quantity (in mbbl) - 429 429 726 726 1,595
Strike price (USD per bbl) - 75 75 75 75 75
Premium per unit (USD per bbl) - 2 2 2 2 2
HEDGE RESERVE MOVEMENT
The table below shows the movement in the hedge reserve from changes in the cash flow hedges
USD Million Hedge Reserve
Balance as of 01.01.2020 (14)

Realized cash flow hedge (29)
Related tax - realized cash flow hedge 18
Changes in fair value 108
Related tax - changes in fair value (69)
Balance as of 31.12.2020 14

19 SHARE CAPITAL
Noreco owns 438,161 of its own shares. All shares have equal rights. All shares are fully paid.
CHANGES IN NUMBER OF SHARES AND SHARE CAPITAL:
No. of shares Share capital*

Number of shares and share capital as of 01.01.2019 7,194,730 8
Share issue 26 July 2019 15,585,635 19
Share issue 30 August 2019 1,768,648 2

Treasury share
No. of shares reserve*
Number of treasury shares and treasury share reserve as of 01.01.2019 - -
Number of treasury shares and treasury share reserve as of 31.12.2019 - -
Purchase of Treasury shares (438,161) (0)
Number of treasury shares and treasury share reserve as of 31.12.2020 (438,161) (0)
*In USD million
CHANGES IN 2020
The company bought back 438,161 of its own shares, of which 299,925 shares was bought as part of a reverse book building
process and 138,236 shares was bought in the market. The buyback programme was executed in accordance with the
authorization given by the Noreco’s general meeting in 28 June 2018, which was valid until 28 June 2020. After the completion
of the buyback programme, Noreco owns 438,161 of its own shares, approximately 1,78 percent.
CHANGES IN 2019
As part of the Transaction, Noreco issued 15,585,635 new ordinary shares through a private placement and 1,768,645 new
ordinary shares through a partially underwritten subsequent offering (which was over-subscribed by 101%), at a subscription
price of NOK 185 per share.

OVERVIEW OF SHAREHOLDERS AT 30 MARCH 2021:
Shareholder* Shareholding Ownership share Voting share

Euroclear Bank S.A./N.V. 7,377,191 30.05% 30.05%
Goldman Sachs International 5,865,617 23.89% 23.89%
BNP Paribas 1,431,852 5.83% 5.83%
The Bank of New York Mellon SA/NV 978,193 3.98% 3.98%
Barclays Bank PLC 820,000 3.34% 3.34%
Bank of America, N.A. 774,408 3.15% 3.15%
NORWEGIAN ENERGY COMPANY ASA 438,161 1.78% 1.78%
UBS Switzerland AG 405,487 1.65% 1.65%
Morgan Stanley & Co. Int. Plc. 293,670 1.20% 1.20%
State Street Bank and Trust Comp 286,392 1.17% 1.17%
The Bank of New York Mellon 240,979 0.98% 0.98%
DnB NOR Bank ASA 237,382 0.97% 0.97%
UBS AG 225,428 0.92% 0.92%
SOBER AS 178,332 0.73% 0.73%
OUSDAL AS 146,975 0.60% 0.60%
Goldman Sachs & Co. LLC 142,488 0.58% 0.58%
VELDE HOLDING AS 116,238 0.47% 0.47%
FINSNES INVEST AS 112,079 0.46% 0.46%
Total 21,139,725 86.1 % 86.1 %
Other owners (ownership <0,42%) 3,409,288 13.89% 13.89%
Total number of shares at 30 March 2021 24,549,013 100% 100%
Nominee holder
*
20 POST-EMPLOYMENT BENEFITS
DEFINED CONTRIBUTION PLAN

The Group has defined contribution plans for its employees. Pension costs related to the company’s defined contribution plan
amounts to USD 433 thousand for 2020. For 2019 the corresponding costs were USD 219 thousand.
The Norwegian Companies are obliged to have occupational pension in accordance with the Norwegian act related to
mandatory occupational pension. All Norwegian companies meet the Norwegian requirements for mandatory occupational
pension ("obligatorisk tjenestepensjon"). Correspondingly, the affiliates in Denmark and United Kingdom comply with the
requirement for mandatory occupational pension by local legislation

21 ASSET RETIREMENT OBLIGATIONS
USD million 31.12.2020 31.12.2019
Balance on 01.01. 967 68

Acquisition of abandonment liability through business combination - 918
Provisions and change of estimates made during the year 23 (2)
Accretion expense - present value calculation 34 15
Incurred cost removal (74) (34)
Currency translation adjustment 0 0
Total provision made for asset retirement obligations 950 967
Break down of short-term and long-term asset retirement obligations

Short-term 24 52
Long-term 927 915
Total provision for asset retirement obligations 950 967
Asset retirement obligations are measured at net present value of the anticipated future cost (estimated based on current day
costs inflated 1%). The liability is calculated on the basis of current removal requirements and is discounted at 4% (based on a
risk-free rate adjusted for credit risk) to a present value. The asset retirement estimate from the operator includes both USD
and DKK costs. The change in estimate during the year includes an increase of 51 MUSD as a result of the strengthening of
DKK to USD. Most of the removal activities are expected to be executed many years into the future. This makes the ultimate
asset retirement costs and timing highly uncertain. Costs and timing can be affected by changes in regulations, technology,
estimated reserves, economic cut-off date etc. The provision at the reporting date represents management’s best estimate
of the present value of the future asset retirement costs required.
As part of the overall restructuring in 2015, an agreement was reached that entails that the partners took over Noreco's share
of the Nini/Cecilie licences, however Noreco remains liable for the asset retirement obligation towards the license partners.
The liability related to Nini/Cecilie is capped at the escrow amount, which is currently DKK 429 million.
The balance as per 31.12.2020 is USD 875 million for DUC, USD 71 million for Nini/Cecilie, USD 2 million for Lulita (non-DUC
share) and USD 2.5 million for Tyra F-3 pipeline.

BORROWINGS
23
23.1 SUMMARY OF BORROWINGS
31.12.2020 31.12.2019
Principal Book Principal Book
USD million amount value amount value
NOR 13 Convertible Bond 1) 171 131 158 108
NOR 14 Senior Unsecured Bond 2)
175 169 175 168
Total non-current bonds 346 299 333 276
Reserve based lending facility 3) 751 719 746 707
Deferred Consideration 4) 25 25 25 25
Total non-current debt 776 744 771 732
Total borrowings 1,122 1,043 1,104 1,008
Cash flows Non-cash changes
Payment in
Receipts / Deferred Embedded kind/Amort
Movements in interest-bearing liabilities 31.12.19 payments consideration derivatives isation 31.12.20
Nor 13 Convertible Bond 108 - - - 22 131
Nor 14 Senior Unsecured Bond 168 (16) - - 17 169
Reserve based lending facility 707 (34) - - 46 719
Deferred Consideration 25 - - - - 25
Total movement non-current interest-bearing liabilities 1,008 (50) - - 85 1,043
Total movement in interest-bearing liabilities 1,008 (50) - - 85 1,043
1) The Company issued a convertible bond loan of USD 158 million in 2019 where the lender was granted a right to
convert the loan into new shares in the Company by way of set-off against the claim on the Company. The loan
carries an interest of 8% p.a. on a PIK basis, with an alternative option for the Company to pay cash interest at 6%
p.a., payable semi-annually. 2020 principal amount includes PIK interest issued.
2) The Company issued a senior unsecured bond of USD 175 million in 2019. The bond carries an interest of 9% p.a.,
payable semi-annually.
3) The Company entered into a seven-year USD 900 million Reserve Based Lending Facility in 2019 as part of the
acquisition. Interest is accrued on the repayment amount with an interest comprising the aggregate of 3-months
LIBOR and 4% p.a., payable quarterly
4) In accordance with the SPA USD 25 million of the consideration is due the earliest of March 2023 and finalising Tyra
Redevelopment.

23.2 DETAILS ON BORROWING
Details on borrowings outstanding on 31 December 2020
Reserve based lending facility

In July 2019, Noreco entered into a committed seven-year senior secured reserve-based credit facility of USD 900 million. The
facility is a reserve-based credit facility secured against certain cash flows generated by the Group. The amount available
under the facility is recalculated every six months based upon the calculated cash flow generated by certain producing fields
and fields under development at an oil price and economic assumptions agreed with the banking syndicate providing the
facility. The facility is secured by a pledge over the shares of certain Group companies, a pledge over the Company’s working
interest in its share of the DUC licence and security over insurances, hedging contracts, project accounts, intercompany loans
and material contracts. The pledged assets at 31 December 2020 amounted to USD 1 818 million and represented the carrying
value of the pledge of the Group companies whose shares are pledged as described in the section 5 below (Assets pledged
as security for interest bearing debt).
Pledge value: carrying value of shares held in Altinex AS, Noreco Denmark A/S, Noreco Oil Denmark A/S, Noreco Petroleum
Denmark A/S by Noreco ASA.
NOR13
In July 2019, Noreco issued a subordinated convertible bond loan of USD 158 million with a tenor of eight years where the
lender was granted a right to convert the loan into new shares in the Company at a conversion price of NOK 240 (USD 29.3)
per share by way of set-off against the claim on the Company. The loan has a mandatory conversion to equity after five years
and carries an interest of 8% p.a. on a PIK basis, with an alternative option to pay cash interest at 6% p.a., payable semi-annually.
Should the instrument be in place beyond the five-year conversion period, the interest rate on NOR13 will be reduced to 0.0
percent for the remaining term of the loan. The value of the convertible bond at year end is USD 171 million, calculated on a
straight-line basis including PIK interest issued.
The convertible bond loan has been determined to contain embedded derivatives which are accounted for separately as
derivatives at fair value through profit or loss, while the loan element subsequent to initial recognition is measured at amortized
cost, a total of USD 4.5 million in transaction cost is included in the amortized cost. The embedded derivative is valued on an
option valuation basis, the carrying value is USD 18 million (initial value USD 54 million). As a result of the buyback of 299,925
shares at a price of NOK 242 per share on 23 January 2020, the conversion price for the NOR13 subordinated convertible bond
issue was adjusted in accordance with the bond terms, from USD 29.3398 to USD 28.9734, effective from the trade date of
the purchase of shares. The fair value calculation for the option portion of the NOR13 bond includes this update to the
conversion price. For inputs to the model used to calculate the fair value of the embedded derivatives, please see note18.
NOR14
In December 2019, Noreco successfully completed the issue of a USD 175 million unsecured bond. The proceeds are utilised
for general corporate purposes and the bond carries an interest of 9% p.a., payable semi-annually, with a six and a half-year
tenor.

23.3 COVENANTS
COVENANTS RELATING TO INTEREST BEARING DEBT
Reserve based lending facility

The reserve-based credit facility constitutes senior debt of the Company and is secured on a first priority basis against certain
of the Company´s subsidiaries and their assets. The reserve-based credit facility agreement contains a financial covenant that
the ratio of Net Debt to EBITDAX (earnings before interest, tax, depreciation, amortisation and exploration) shall be less than
3.0:1.0 at the end of each six-monthly redetermination period. Noreco must also demonstrate minimum liquidity on a look
forward basis of USD 50 million during the relevant period, which is currently to the completion of the Tyra redevelopment
project. The agreement also includes special covenants which, among other, restrict the Company from taking on additional
secured debt, provide parameters for minimum and maximum hedging requirements and restrict declaration of dividends or
other distributions. Noreco is in compliance with these covenants at the end of 2020.
NOR14
The USD 175 million unsecured bond has two financial covenants included within the terms of the agreement that apply outside
the Tyra redevelopment period: a minimum liquidity covenant requirement of USD 25 million unrestricted cash, bank deposits
and cash equivalents and a maximum leverage ratio of net debt to EBITDAX of 3.0:1.0. During the Tyra redevelopment period,
defined as from June 2021 until the earlier of (1) two quarters post completion of the Tyra redevelopment project and (2) June
2023, Noreco must maintain a minimum liquidity position of USD 50 million and a maximum leverage ratio of 5.0x.
23.4 PAYMENT STRUCTURE
Payment structure (USD million):

Reserve Based Deferred
Year NOR13 NOR14 Lending Facility Consideration Total
2022 - - 176 - 176
2023 - - 225 25 250
2024 - - 225 - 225
2025 - - 125 - 125
2026 - 175 - - 175
Total - 175 751 25 951
Interest payments (USD million):

Reserve Based Deferred
Year NOR13 NOR14 Lending Facility Consideration Total
Interest rate - 9.0 % LIBOR + 4% 4.0 %
2021 - 16 36 1 53
2022 - 16 35 1 52
2023 - 16 29 1 46
2024 - 16 19 - 35
2025 - 16 8 - 24
2026 - 8 - - 8
Total - 87 127 3 217

23.5 ASSETS PLEDGED AS SECURITY FOR INTEREST BEARING DEBT
NET BOOK VALUE IN THE SEPARATE FINANCIAL STATEMENTS OF ASSETS PLEDGED AS SECURITIES
The Group has the following pledged assets for the Reserve Based Lending facility:

Noreco ASA shares in Altinex AS 393 393
Altinex AS shares in Noreco Olie- og Gasutvinding Danmark B.V and other companies 1,295 1,159
Loans from Parent to subsidiaries 130 111
Total net book value 1,818 1,663
24 TRADE PAYABLES AND OTHER PAYABLES
Trade payable1) 1 29
Liabilities to operators relating to joint venture licences 1)
97 101
Overlift of oil/NGL 13 12
Accrued interest 3 5
Salary accruals 1 1
Public duties payable2) 159 26
Other current liabilities 12 18
Total trade payables and other current liabilities 286 191
1)
DUC cash calls at the end of 2019 of 24 MUSD reclassified from Trade payables to Liabilities to operators relating to JV licenses.
2)
Public duties payable at the end of 2020 of USD 159 million relate to Noreco’s VAT liability covering sales during 2020. This amount will be payable in
the first half of 2021, with the payment date having been delayed by the Danish government as a response to the impact of COVID-19 on the economy.
Trade and other payables held in currency

NOK 3 1
DKK 220 148
USD 49 81
GBP 1)
1 (1)
EUR1) 13 (38)
Total 286 191
1)
EUR and GBP amounts in 2019 are included in net liabilities to operators relating to joint venture licenses.

25 SHARE-BASED COMPENSATION
The Company implemented a share option programme at an extraordinary general meeting held 8 November 2018 (and later
amended), where the board of directors was authorized to grant options up to a total of 1,510,000 shares in the Company as
part of a new incentive program. The options may be granted to the members of the board, key personnel and employees of
the Company. After award, the options must be exercised within 5 years after which they expire.
In May 2020, the beneficiaries under the share option programme was offered to accept amended terms of (i) a reduced
strike price of NOK 160 per share and (ii) a reduction in the number of options granted of 30%. Following this, the option
programme was reduced from a total of 1,510,000 shares to 1,190,500 shares in the Company and the outstanding options at
the time was reduced by 319,500 to 745,500.
The board of directors of the Company has in 2020, adjusted for the amendments mentioned above, allocated 384,000
options with a strike price of NOK 160 per share. In addition, 70,000 options as a result of not being vested by the
beneficiary upon resignation, has been relinquished to the Company. Options vest over three years, with one-third per year.
In addition to this option programme, the general meeting resolved on 7 August 2019 a share option programme in which
Noreco may issue one option for each share purchased by any board member (except of Riulf Rustad and Lars Purlund) up to
a total of 10,000 shares for each Board Member.
Total share options outstanding as at 1 January 2019 -

Amendment to option programme (323,086)
Share options relinquished in 2020 (70,000)
THE EXPENSE RECOGNISED DURING THE YEAR IS SHOWN IN THE FOLLOWING TABLE:
Expense arising from equity-settled share-based payment transactions 2 8

Total expense arising from share-based payment transactions 2 8
THE FOLLOWING TABLE LIST THE INPUTS TO THE MODEL USED:

Weighted averages 2020
Fair value at valuation date (NOK) 63

Share price at valuation date (NOK) 145
Exercise price (NOK) 160
Expected volatility 57.92%
Expected life (years) 3.9
Expected dividends n/a
Risk-free rate (based on government bonds) 0.36%
Model used Black - Scholes - Merton

26 GUARANTEES
OVERVIEW OF ISSUED GUARANTEES ON 31 DECEMBER 2020.
The parent company of the Group, Norwegian Energy Company ASA ("Noreco") has issued a parent company guarantee on
behalf of its subsidiary Norwegian Energy Company UK Ltd and Noreco Oil (UK) Limited. Noreco guarantees that, if any sums
become payable by Norwegian Energy Company UK Ltd or by Noreco Oil (UK) Limited to the UK Secretary of State under the
terms of the licence and the company does not repay those sums on first demand, Noreco shall pay to the UK Secretary of
State on demand an amount equal to all such sums. Department for Business, Energy & lndustrial Strategy, declined at this
time to withdraw Noreco Oil (UK)’s s29 notice with respect to the Huntington platform and pipeline. Under the forfeiture
agreement Premier assumes this risk as between Premier and Noreco so, while this contingent liability to the Secretary of
State would need to be recognised in any future sale of the company, Noreco Oil (UK) Limited does have recourse against
Premier if it defaults in its performance.
On 6 December 2007, Noreco issued a parent company guarantee to the Danish Ministry of Climate, Energy and Building on
behalf of its subsidiary Noreco Oil Denmark A/S and Noreco Petroleum Denmark A/S.
On 31 December 2012, Noreco issued a parent company guarantee on behalf of its subsidiary Noreco Norway AS. Noreco
guarantees that, if any sums become payable by Noreco Norway AS to the Norwegian Secretary of State under the terms of
the licences and the company does not repay those sums on first demand, Noreco shall pay to the Norwegian Secretary of
State on demand an amount equal to all such sums. Noreco Norway AS was liquidated in 2018, however as per 31 December
2010 the guarantee has not been withdrawn.
In connection with completion of the acquisition of Shell Olie- og Gasudvinding Denmark B.V. in 2019, Noreco issued a
parent company guarantee to the Danish state on behalf of the two acquired companies for obligations in respect of licence
8/06, area B and the Tyra West – F3 gas pipeline. In addition, Noreco issued a parent company guarantee towards the
lenders under the Reserve Based Lending Facility Agreement and to Total E&P Danmark A/S for its obligations under the
DUC JOA and to Shell Energy Europe Limited related to a gas sales and purchase agreement (capped at EUR 30 million)..
27 INVESTMENT IN JOINTLY OWNED ASSETS
Investment in jointly own assets are included in the accounts by recognize its share of the assets, liabilities, revenues and
expenses related to the joint operation.
The Group holds the following licence equities on 31 December 2020:
Licence Field Country Ownership share

DUC DUC Denmark 36.8 %
1/90 Lulita Part Denmark 20.0 %
7/86 Lulita Part Denmark 20.0 %
8/06B Denmark 36.8 %

28 CONTINGENCIES AND COMMITMENTS
##
FINANCIAL COMMITMENTS
As a partner in DUC, the Company has commitment to fund its proportional share of the budget and work programmes of
the DUC. In December each year the operating budget (which includes operating expenditures, capital expenditure related
to production, exploration and abandonment) for the following year is agreed amongst the DUC partners. For the coming
four years the average operating budget is expected to be around USD 230 million per year. Capital and abandonment
expenditure for individual projects, such as Tyra, are approved separately.
Noreco’s capital commitments are principally related to the ongoing Tyra redevelopment project. The gross capital and
abandonment expenditure budget for the Tyra redevelopment project at the time of the investment decision was DKK 21
billion and DKK 13.3 billion had been incurred by the end of 2020. Based on the current project schedule, Noreco will be
required to fund its proportional share of this remaining expenditure over the next three years with Tyra to restart production
by June 2023.
The DUC is obliged to use the specially constructed oil trunk line, pumps and terminal facilities and to contribute to the
construction and financing costs thereof as a result of an agreement entered into with the Danish government. This
obligation is approximately USD 22 million per year (2019: USD 19 million).
In addition to the above and in order to obtain the consent of Total E&P Danmark A/S to the acquisition, Noreco Oil Denmark
A/S agreed to place monies in a secured cash call security account in favour of Total E&P Danmark A/S (the concessionaire
in respect of the Sole Concession). The cash call security account was funded in an amount of USD 50 million upon
completion of the transaction. This escrow amount will then be increased by USD 15 million on a monthly basis during the
second half of 2020 up to a maximum amount of USD 140 million by January 2021. By end of 2020 the escrow account was
USD 125 million. The cash call security amount will then decrease to USD 100 million at the end of the year in which the Tyra
redevelopment project is completed and can, on certain terms and conditions, be replaced with a letter of credit or other
type of security.
GUARANTEES
The Company has provided a parent company guarantee to the Danish Ministry of Climate, Energy and Utilities related to the
Group’s activities on the DCS, including Noreco’s participation in the DUC and the Lulita licence. The Company has also
provided a parent company guarantee towards the lenders in relation to the Company’s USD 900 million reserve-based
lending facility and customary obligations/guarantees under joint operating agreements. Noreco has also provided a parent
company guarantee to Shell Energy Europe Limited in relation to its subsidiary Noreco Oil Denmark A/S’s obligations under a
gas offtake and transportation agreement.
Furthermore, the Company has provided a parent company guarantee to Total E&P Danmark A/S for its obligations under the
JOA together with a guarantee from Shell. Noreco has provided standby letters of credit of USD 100 million, issued under the
USD 100 million sub-limit of the RBL facility for the benefit of Shell in connection with this guarantee.
In relation to Noreco’s historic operations in the UK North Sea, the Company has issued a parent company guarantee on
behalf of its subsidiaries Norwegian Energy Company UK Ltd and Noreco Oil (UK) Limited.
CONTINGENT LIABILITIES
In relation to the Nini and Cecilie fields, Noreco was in 2015 prevented from making payments for its share of production costs
and was consequently in breach of the licence agreements. In accordance with the JOAs, the Nini and Cecilie licences were
forfeitured and the licences were taken over by the partners, whereas the debt remained with Noreco. Noreco and
representatives from the bondholders reached an agreement during 2015 which entails that the Danish Noreco entity remains
liable for the abandonment obligation, but the liability is in any and all circumstances limited to a maximum amount equal to

the restricted cash account of USD 71 million (DKK 429 million), adjusted for interest. The total provision made for the asset
retirement obligations reflects this.
The Company has received a claim regarding the level of Ørsted pipeline tariffs charged since 2013. As the relevant authority
(Forsyningstilsynet) is currently reassessing their view, Noreco believes that there is no basis for this claim prior to a new ruling
setting the appropriate level of these tariffs. Given the outcome of this and any consequent liability is not yet known, the
Company has not recognized a provision for this claim.
During the normal course of its business, the company may be involved in disputes, including tax disputes (see Note 13 Tax).
The company has not made accruals for possible liabilities related to litigation and claims based on management's best
judgment.
Noreco has unlimited liability for damage in relation to its participation in the DUC. The Company has insured its pro rata
liability in line with standard market practice.
Apart from the issues discussed above, the Group is not involved in claims from public authorities, legal claims or arbitrations
that could have a significant negative impact on the Company’s financial position or results.
29 RELATED PARTY TRANSACTIONS
The Noreco Group was renting an accommodation in London for the board of director disposal when working with business
development. This contract is terminated in December 2020.
Purchase of services includes consultancy cost from S&U Trading ApS (owned by Board Member Lars Purlund) of USD 0.3.
The Group did not have any other transactions with any other related parties during 2020. Director's fee paid to shareholders
and remuneration to management is described in Note 7.
30 SUBSEQUENT EVENTS
On 2 February 2021, the Company entered into an underwriting agreement with five banks for a USD 1.1 billion RBL facility
with a seven-year term and maturing in 2028.
This RBL, with a USD 200 million increased facility size and two years maturity extension, will amortize from the second half
of 2024 and reinforces the Company’s capital structure. In addition, Noreco has established a link in the RBL to ESG targets
that will support development progression of the Company’s ESG strategy. The USD 1.1 billion facility will be fully
underwritten by BNP Paribas, Deutsche Bank, ING Bank, Lloyds Bank and Natixis.

Statement of Compliance
BOARD AND MANAGEMENT CONFIRMATION
Today, the board of directors and the managing director reviewed and approved the board of directors’ report and
the Norwegian Energy Company ASA consolidated and separate annual financial statements as of 31 December
2020.
To the best of our knowledge, we confirm that:
• the Norwegian Energy Company ASA consolidated annual financial statements for 2020 have been prepared in
accordance with IFRSs and IFRICs as adopted by the European Union (EU), and additional Norwegian disclosure
requirements in the Norwegian Accounting Act, and that
• the financial statements for Norwegian Energy Company ASA have been prepared in accordance with the
Norwegian Accounting Act and Norwegian Accounting Standards, and
• that the board of directors’ report for the group and the parent company is in accordance with the requirements in
the Norwegian Accounting Act and Norwegian Accounting Standard no 16, and
• that the information presented in the financial statements gives a true and fair view of the Company’s and the
Group’s
assets, liabilities, financial position and results for the period viewed in their entirety, and
• that the board of directors’ report gives a true and fair view of the development, performance, financial position,
principle risks and uncertainties of the Company and the group.
Oslo, 19 April 2021

Colette Cohen Chris Bruijnzeels Robert J. McGuire David B Cook


Alternative Performance Measures
Noreco may disclose alternative performance measures as Adj. EBITDA is adjusted for any claims under the volume
part of its financial reporting as a supplement to the financial guarantee in the quarter as this reflects a payment from Shell
statements prepared in accordance with IFRS. Noreco if the production performance of the business is below
believes that the alternative performance measures provide expectations set at the time of the signing of the SPA. This
useful supplemental information to management, investors, hedge is calculated to make whole Noreco’s contribution
security analysts and other stakeholders and are meant to from the operations had the performance been in line with
provide an enhanced insight into the financial development expectations and is currently reflected in the company’s
of Noreco’s business operations and to improve cashflow statement and balance sheet only.
comparability between periods.
It is also adjusted for exceptional costs in relation to the
Abandonment spent (abex) is defined as the payment for transaction that are not reflective of the underlying
removal and decommissioning of oil fields, to highlight the performance of the business, cost from share-base payment
cash effect for the period. arrangements.
All figures in USD million 2020 2019
EBITDA 250 127

Claim volume floor guarantee 98 70
Transaction cost - 9
Non-payment insurance 8 -
Share-base payment 2 8
Exceptional DUC operating cost - 22
Adj. EBITDA 358 236
EBITDA Earnings before interest, taxes, depreciation, Interest bearing debt defined as the book value of the
depletion, amortization and impairments. EBITDA assists in current and non-current interest-bearing debt.
comparing performance on a consistent basis without regard
to depreciation and amortization, which can vary significantly Net interest-bearing debt is defined by Noreco as cash and
depending on accounting methods or non-operating factors cash equivalents reduced by current and non-current
and provides a more complete and comprehensive analysis interest-bearing debt. RBL facility and bond loan are included
of our operating performance relative to other companies. in the calculation with the total amount outstanding and not
the amortised cost including transaction cost.
Convertible bond loan (131) (108)

Senior Unsecured bond loan (169) (168)
Reserve based lending facility (719) (707)
Other interest-bearing debt (25) (25)
Interest-bearing debt (1,043) (1,008)

Alternative Performance Measures

Cash and cash equivalents 259 286
Convertible bond loan (171) (158)
Senior Unsecured bond loan (175) (175)
Reserve based lending facility (751) (746)
Other interest-bearing debt (26) (25)
Net interest-bearing debt (863) (818)

SUPPLEMENTARY OIL AND GAS INFORMATION (UNAUDITED)
In 2021 the Group reported oil and gas reserves, the report is reported separately from the annual report 2020. RISC UK ltd
(RISC) has made an independent reserves evaluation based on the definitions and guidelines set out in the revised June 2018
Petroleum Resources Management System (PRMS) version 1.01 (June 2018)
The reserves for the DUC portfolio and Lulita, are shown below using the figures from the 2020 Annual Statement of Reserves
as basis.
TOTAL RESERVES AS OF 31.12. 2020
Liquids Gas Mill Interest Net mill

2P/P50 (mill bbl) (mmboe) boe % boe
Dan 71.2 3.8 75.0 36.8 % 27.6
Kraka 9.4 0.3 9.7 36.8 % 3.6
Halfdan 142.0 36.2 178.2 36.8 % 65.6
Gorm 18.2 - 18.2 36.8 % 6.7
Skjold 27.0 - 27.0 36.8 % 9.9
Rolf 2.5 - 2.5 36.8 % 0.9
Tyra 38.3 85.6 123.9 36.8 % 45.6
Valdemar 60.0 28.2 88.2 36.8 % 32.5
Roar 5.4 12.2 17.6 36.8 % 6.5
Harald 0.9 4.5 5.4 36.8 % 2.0
Lulita 0.7 0.5 1.2 28.4 % 0.3
Total 201.2

Information About Noreco
Head Office Noreco

Headquarter Nedre Vollgate 1, 0158 Oslo, Norway
Telephone +47 22 33 60 00
Internet www.noreco.com
Organisation number NO 987 989 297 MVA
Financial Calendar 2021

19 May Annual General Meeting
28 May Q1 2021 Report
13 July Q2 2021 Report
28 October Q3 2021 Report
Board of Directors
Riulf Rustad Chair
Marianne Lie
Tone Kristin Omsted
Colette Cohen
Yves-Louis Darricarrère
Chris Bruijnzeels
Bob McGuire
Management
David B.Cook Chief Executive Officer
Euan Shirlaw Chief Financial Officer
John Hulme Chief Operating Officer
Cathrine Torgersen EVP, Investor Relations & Communications
Frederik Rustad EVP, Corporate Finance & Investments
Hege Hayden EVP, People & Capability
Investor Relations
Phone +47 22 33 60 00
E-mail [email protected]
Annual Reports
Annual reports for Noreco are available on www.noreco.com
Quarterly publications
Quarterly reports and supplementary information for investors and analysts

are available on www.noreco.com. The publications can be ordered by
e-mailing [email protected].
News Releases
In order to receive news releases from Noreco, please register
on www.noreco.com or e-mail [email protected].

noreco.com

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ANNUAL REPORT 2020

As a result of this transaction, Noreco lower opex significantly and unlock

The DUC is currently redeveloping

• Solid operational performance: • Proactive COVID-19 measures to

• A game-changing project: To • First delivery from yard: In Sep-

• Safety and sustainability:

Operationally, we delivered pro- We agreed early this year an under-

OIL /GAS PRODUCTION SPLIT

• Chemical injection on Dan

• MFB-21 and MFB-22 wells have

NET PRODUCTION Kraka Field

Several reservoir management studies are currently on-going

The Gorm field was discovered in 1971 and brought on pro-

• Well scale inhibitor squeezes • Stable oil production on Rolf.

NET PRODUCTION Skjold Field

NET PRODUCTION Rolf Field

The Halfdan hub includes Halfdan and Halfdan NE. Halfdan is

Halfdan consists of two main groups of platforms, Halfdan A and Halfdan

• Wireline work was largely focused

Reservoir models and recovery optimisation, integrated

The Tyra main field is a gas field discovered in 1968

NET RESE RVES

Roar Field Harald Field

2020 MILESTONES & DEVE LOPME NT

In September, the project took delivery of two jackets after completing

Due to the global pandemic, local governmental imposed restrictions at the

2020 Performance Status

RE MARKS 2020 PE RFORMANCE

Oil discharge to Sea

NOx, SOx emission

Sustainability Linked KPIs

2024 2026 2027

KPI Target: KPI Target: KPI Target:

2021-23 2023-26 2027 2029

KPI Target: KPI Target: KPI Target: KPI Target:

As part of the Tyra Redevelopment Project, the old Tyra pro-

The facilities were transferred to the new recycling yard of M.A.R.S. at

Partnering with wind farm developers and infrastructure stakeholders can

Giga Watt Central North

Hydrogen production offshore in connection with an extensive offshore wind

Research and Technology

Together with its partners in the DUC, Noreco invests

Advanced Water Flooding

Well and Production Technology

Operations and Maintenance Technology

Enhanced Well Chemistry and Integrity

AI-assisted Structural Integrity

Produced Water Management

The DUC also supports researchers on the development of new scientif-

The Environmental Team in the DUC arranges dedicated biodiversity aware-

From the Boardroom

NORECO 2020 ANNUAL REPORT 34

TONE KRISTIN OMSTED

NORECO 2020 ANNUAL REPORT 35

Bruijnzeels holds a master’s in Mining Engineering from the University of Delft. He is

McGuire is a senior professional at MAEVA Group, LLC., a turnaround and restructuring

NORECO 2020 ANNUAL REPORT 36

NORECO 2020 ANNUAL REPORT 37

GROUP FINANCIAL RESULTS FOR 2020

Selected data from consolidated statement of comprehensive income