Norwegian Energy Company (Noreco) reported “strong performance” over the summer months, as a well restimulation campaign at Halfdan lifted gas production.

In a trading update issued Tuesday Noreco (OSLO:NOR) said preliminary production estimates for July and August 2022 stood at 27,300 barrels of oil equivalent per day (boepd).

Much of this was driven by a successful well restimulation campaign at the Danish Halfdan hub carried out this summer.

In combination with strong performance across its portfolio, and a scale squeeze operation at the Gorm field, Noreco said the HCA work delivered approximately 2,000 boepd of additional gas volumes and increased its overall gas weighting from around 20% to roughly 26% of total production.

It expects the restimulation work have a “positive effect” on production until H2 2024.

Accordingly, it also upped its full-year production guidance from 24,500-26,500 boepd, to between 25,500 and 27,000 boepd.

Noreco said it expected the increased output to have “a significant impact” on its cash generation.

As European gas prices remain high, the group said it has put in place a total of 450,000 MWh of additional gas hedges this quarter, covering winter 22/23, summer 23 and winter 23/24 to secure “favourable prices” in future.

“The success of the HCA restimulation campaign demonstrates the potential of our existing production base, where increased operational activity is delivering material results. This positive outcome has enabled us to increase our production guidance for the second time during 2022,” noted chief executive Euan Shirlaw.

The trading update strikes a more positive note than its last in early August, in which it reported significant delays to the TotalEnergies-led Tyra redevelopment project off Denmark.

Noreco said global supply chain challenges had impacted the extent to which fabrication work on the Tyra process module (TEG) has been completed in the yard in Batam, pushing first gas from the project back to winter 2023/24.

It was the second major delay for the project, which had already been pushed back from 2022 into mid-2023 as a result of COVID-19, and will also see the firm incur additional expenditure.

Mr Shirlaw said today’s revised forecasts show “a significant enhancement” of the company’s pre-Tyra cashflow profile.

“The DUC operator continues to mature further planned workover activity, and we look forward to this continuing to deliver into 2023 and beyond,” he concluded.

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