Annual report
2022
Contents
North Energy at a glance .............................................................................................................. 3
CEO’s Statement ............................................................................................................................................. 4
Directors’ report ................................................................................................................................................ 8
Corporate Governance ..................................................................................................................... 18
Financial Statements & Notes ............................................................................................ 24
Responsibility Statement ............................................................................................................... 50
Shareholder Information ................................................................................................................ 52
Auditor’s report ................................................................................................................................................... 54
North Energy at a glance | 3
North Energy at a glance
Key figures
In 2022 the main industrial investments of North Energy have been shares
in Reach Subsea ASA (“REACH”) and Wind Catching Systems AS (“WCS”).
The main financial investment has been shares in Touchstone Exploration
Inc (“TXP”). In addition, the Company has taken steps to optimize excess
liquidity by the establishment of a new multicurrency credit facility with
DNB where the Company uses listed financial investments as collateral and
placed excess cash in NOK denominated investment grade bonds. This
gives the Company more flexibility when it comes to liquidity management.
From 1st of January 2022 the former senior advisors have been em-
ployed by the Company in the roles as co-CEO and by the end of 2022,
the Company counted 3 full time employees. North Energy’s head office
is in Oslo. The Company is listed on the Euronext Expand Oslo Stock
Exchange with the ticker “NORTH”.
MNOK 2022
2021
Earnings before tax -13,1 -46,2
Tax 0 18,4
Net result -13,1 -27,8
Total Assets 327,6 339,0
Equity 308,2 321,3
Equity % 94% 95%
Net asset value 403,4 352,9
Market capitalisation 31.12 252,4 319,0
4 | Dear shareholder
Global markets and economy
The year 2022 has been a year of mostly
weak performance in global financial markets.
Global international share indices have declined
significantly with the S&P 500 index declining
by approximately -20% over the year. The
technology heavy Nasdaq 100 index was
particularly weak with a decline of -34%. Oslo
Stock Exchange (OSEBX) benchmark index
was roughly flat over the year as energy shares
significantly outperformed versus global shares.
Growth in the global economy continued to hold
up reasonably well however with the backdrop
of inflation rising materially and continuing to be
significantly above central bank targets. To bring
inflation down, global central banks embarked
on a campaign of historically unprecedented
rises in interest rates with the US Federal
Reserve raising its Federal Funds Rate by 450
basis points during 2022. This is the fastest pace
of interest rate increases we have seen since the
1970s, both on an absolute and relative basis.
Energy markets in 2022
The year 2022 was an extremely volatile year
for energy markets with high prices in general
as well as periodic price spikes to extreme
levels. In the aftermath of Russian invasion of
Ukraine in February 2022, energy prices rose to
unprecedented levels, particularly for natural gas.
The resulting prices and significant uncertainties
resulted a changing landscape for energy use. To
keep lights on in Europe the continent has relied
on coal which marks a set-back in the progress
towards use of energy sources with lower carbon
footprints. The phase-out of Russian pipeline gas
in a very short period of time, will also change the
energy landscape in Europe for decades to come.
Brent crude oil benchmark ended the year at
$86/bbl versus $80/bbl at the start of the year
but saw periodic spikes in excess of $120/bbl
during the year. Natural gas prices were also
very strong, particularly in Europe, with Dutch
TTF natural gas prices increasing from €65/MWh
to a peak of over €300/MWh in H1. Favorable
weather in combination with significant shut-
ins of industrial energy use has brought prices
down through the year but there continues to
be significant risk of higher energy prices in the
coming years.
Perspectives on the future
As we stated in our annual report for 2021,
innovation in energy technology continues to be
a focus for North Energy. We are continuously
searching for investment opportunities that
provide energy solutions in a more cost-
effective way with a reduced carbon emission
footprint. This applies both to developing our
existing portfolio of investments as well as new
opportunities.
Dear Shareholders!
The year 2022 in brief:
• Comprehensive income of -13.1 MNOK
• Net asset value growth of 14%
• New team of co-CEOs started in January 2022
• Continued work on developing our portfolio of investments
Dear shareholder | 5
at elevated levels there is a significant risk that
this will continue as there are multiple factors
underpinning a world with structurally higher
inflation in the years to come. Deglobalization
is one of these and increased geopolitical
competition, principally between China and the
US, is likely to cause a structural shift upwards
for inflation. Strategic autonomy over chip
production, increased scarcity of both energy
and other commodities as well as the green
transition are all likely to underpin higher
inflation than the realities of the last few decades.
Within this strategic backdrop we intend to
develop our portfolio of industrial holdings in
accordance with our stated philosophy as value
oriented and contrarian investors. There has
been a significant adjustment of valuations for
a number early phase companies through the
year, however we continue to find valuations
to be at elevated levels for many opportunities.
We will continue to take a prudent approach
in terms of identifying new investments and
broaden our portfolio of industrial investments
as opportunities emerge.
Rachid Bendriss
co-CEO
North Energy ASA
Didrik Leikvang
co-CEO
North Energy ASA
The year 2022 has been a transformational
year for Reach Subsea with significant growth
in business volumes as well as advances in the
Reach Remote project. Wind Catching Systems
completed significant milestones through the
year, most importantly through completing their
Series A financing of USD 10 million.
Although there has been a significant reality
check with respect to how quickly the world
can transition to greener sources of energy,
we continue to believe there are significant
technological risks related to the energy
transition as the long-term demand outlook for
carbon intensive energy sources such as oil and
gas is uncertain. As we have previously stated,
demand for conventional energy will ultimately
start to decline at some point as the world
transition towards a decarbonized society.
Electric mobility continues to power forward
and will at some point significantly impact
demand for crude oil. This may be some
years ahead however the transition to battery
electric vehicles continues to outperform
versus expectations just a few years ago. As
producers of trucks and cars roll out new electric
models, we expect electric vehicles to have an
increasingly broad appeal to consumers and
companies around the world.
The year 2022 has been a year of increased
geopolitical polarization. As inflation keeps being
Directors’
report
Directors’ report | 7
is to get a return through owning companies
that generate value from their operations, and
not through buying and selling companies and
financial instruments. Against this background, it
is thus the Board’s conclusion that North Energy
can not be classified as an AIF.
The global economy has during 2022 been
impacted by a mix of increasing geopolitical
tension, fuelled by the war in Ukraine and
escalating trade and political tensions between
China and the Western world, and rapidly
rising inflation and, consequently, rising
interest rates as central banks embarked on a
mission to combat inflation. In the wake of this
backdrop, global capital markets experienced
a synchronised correction in both equity and
bond markets. The value of North Energy’s
investments, on the other hand, have in total
increased during 2022.
Our investment in Reach Subsea has performed
well with a total return of 44% on market values,
equivalent to a value contribution of NOK 61.8
million. The strong performance of the Reach
Subsea share was fuelled by the company’s
record results for 2022, exceeding the previous
record set in 2021. .
Wind Catching Systems continued making good
progress in developing its innovative solution for
floating offshore wind production and attracted
The Board has considered whether North
Energy can be classified as an alternative
investment fund (AIF) subject to regulation by
the Financial Supervisory Authority of Norway
(Finanstilsynet). North Energy’s main strategy
as an industrial holding company is through its
ownership to exercise significant influence in the
various investment objects. The main purpose
North Energy’s current mandate from
shareholders is to own, manage and provide
financing for activities within the energy industry,
and other industries where the company has
relevant competence. The Company is an
industrial holding company with a portfolio
of independent investments, both listed and
unlisted.
Board of Directors’ Report 2022
The business
North Energy ASA (“North Energy” or “Company”) was established in 2007 with the goal
of exploring commercial accumulations of oil and gas on the Norwegian Continental
Shelf (“NCS”). In May 2016, an extraordinary general meeting resolved a new strategy
and business model whereby North Energy would become an industrial holding
company pursuing investment opportunities in the energy sector. In July 2017, the
Board of Directors of North Energy decided to discontinue the Company’s petroleum
activities on the Norwegian Continental Shelf (“NCS”) and to close the subsidiary North
E&P, which was the base for all petroleum activities in North Energy. The closure of
North E&P and the simplification of the Company’s legal structure was completed
in 2020, resulting in a structure with only one legal entity, North Energy, holding all
investments and carrying out business activities. Towards the end of 2022, North
Energy established two new subsidiaries and moved the ownership of the company’s
shares in Reach Subsea ASA and Wind Catching Systems AS to each subsidiary
respectively. The Company’s business is conducted from its offices located in Oslo.
8 | Directors’ report
further support through new equity capital
from GM Ventures and a strategic collaboration
agreement with GM, as well as grants from
Enova. Through the transaction with GM
Ventures, and other investors, the value of our
investment increased by NOK 40.5 million.
Touchstone Exploration entered 2022 with
expectations that commencement of production
at Coho and Cascadura would transform the
company into a major gas producer with
substantial cash flows. However, continued delays
in development and commissioning pushed
the start-up to October for Coho 2022 and to
June 2023 for the larger Cascadura field. Thus,
the Touchstone share price depreciated by 39%,
measured in NOK, during the year leading to a
NOK 54.3 million value reduction for North Energy.
Our portfolio of other minor investment, con-
sisting of both bonds and shares, had a market
value of NOK 63.3 million at year-end 2022 and
contributed with a 2022 return of NOK 17.4 million.
At the end of the year, North Energy had 3 full-
time employees, which is one more than at the
end of 2021.
Important events
Market development
The year 2022 was a challenging year in
financial markets with substantial losses from
a combination of higher interest rates, higher
inflation and weaker economic prospects.
Towards the end of the year the global economy
continued to hold up reasonably well, despite
significant interest rate rises.
Inflation globally during 2022 has been
substantially above inflation targets set by
central banks globally and we would likely need
to see a combination of reduced demand and
improved supply side dynamics for inflation to
reach target levels.
Corporate matters
In December 2021, the Board of North Energy
announced the following changes in the
Management team. Mr. Knut Sæberg retired
from his position as CEO on 31 December
2021. Effective from 1 January 2022 Mr. Rachid
Bendriss and Mr. Didrik Leikvang were appointed
to the roles as co-CEOs in the Company
collectively responsible for managing the
business. Both Mr. Bendriss and Mr. Leikvang
had since 2016 been engaged as strategic and
financial advisors for the company. Further,
Mr. Rune Damm, Finance Manager since 2015,
assumed the role as CFO from 1 January 2022.
Investment in Reach Subsea
Reach Subsea ASA (Reach) is a company listed
on Oslo Stock Exchange with the objective
to become a leading subsea service provider,
offering solutions to survey the seabed and
solutions for maintaining the integrity of the
client’s subsurface equipment and infrastructure.
During the year, Reach has delivered record high
results exceeding the previous record set in 2021.
The result is driven by high utilization, improved
pricing, and successful project execution. Reach
has continued the development of the Reach
Remote project, a new innovative solution for
providing subsea services on a remote and
autonomous basis, reducing cost and risk to
personnel and eliminating carbon footprint. The
first two vessels have planned delivery late 2023
in order to be ready for commercial operations
in the 2024 season.
At the beginning of the year, Reach announced
two major strategic initiatives with the
acquisition of offshore survey specialist iSurvey
Group AS, and the strategic co-operation with
Wilhelmsen New Energy on Reach Remote.
The agreement with Wilhelmsen New Energy
involved a directed equity issue of NOK 150
million, providing equity funding for the first
two Reach Remote unmanned service vessels.
Through these initiatives, Reach strengthened
its in-house capabilities on data management
and processing, an important feature of Reach
Remote, and strengthened the set-up for
commercialisation of Reach Remote.
The company is very well positioned for the
Directors’ report | 9
applied for additional acreage in the onshore
bidding round announced in 2022.
The Touchstone share has in 2022 depreciated
by 39%, measured in NOK. North Energy has
a shareholding of slightly more than 5% in
the company and is not represented in any of
Touchstone’s governing bodies.
Investment in Wind Catching Systems AS
Wind Catching Systems is a developer of floating
offshore wind technology and intends to enable
offshore wind operators and developers to
produce electricity at a cost that competes with
other energy sources, without subsidies. The
company is currently developing floating multi-
turbine technology expected to cut acreage
use by more than 80% and increase efficiency
significantly in comparison to conventional
floating offshore wind farms In 2022 Wind
Catching Systems completed its Series A
financing of USD 10 million with a new significant
investment from GM Ventures (“GMV”), a
subsidiary of General Motors. In addition to GMV,
current investors Ferd AS and North Energy ASA
has participated in the round. New investors
include the Bergesen family through Havfonn
AS. North Energy participated with a total of 3.2
MNOK in the Series A financing.
During 2022 the company has continued to
develop its technology for floating offshore wind.
The year 2022 has been a year of delays for
Touchstone. Despite projects taking longer than
expected, the company brought the Coho-
1 discovery onto production, which is a key
milestone for the company as it roughly doubles
production for the company on a per barrel
basis. The Coho-1 well has performed in-line with
expectations, producing in its initial phase net 6.6
MMCF of natural gas per day.
The two Cascadura wells are targeted for
production in the middle of 2023. The company
estimates the net initial production rate
from Cascadura to be 55 MMCF per day, or
equivalent to roughly 9,200 barrels per day,
with additional upside from future development
wells.
Touchstone expects production from the Ortoire
block to increase cash flow significantly and
contribute to a substantial reduction in volatility
of future earnings. Based on the natural gas
sales agreement with the National Gas Company
of Trinidad and Tobago, Touchstone has secured
offtake for all natural gas produced from the
Ortoire license.
In the fourth quarter of 2022 Touchstone
completed a new equity issue of USD 13m to
accelerate its drilling program in the Ortoire
block. The company has also through a swap-
agreement increased its license area and has
future, with a financially well performing existing
business, a solid plan in place for reshaping the
delivery model and backed by a strong financial
position with some NOK 260 million in cash and
working capital at the end of 2022.
After year-end Reach Subsea carried out a NOK
125 million private placement to finance (i) the
equity portion of the acquisition of the subsea
vessel Viking Reach, (ii) investments in necessary
equipment and mobilisation of three new vessels
(Viking Reach, Go Electra, and Olympic Triton),
and (iii) working capital and general corporate
purposes. North participated with NOK 20
million in the private placement and now holds
an ownership stake of 19.9%.
The Reach-share has during the year provided
a total return, including dividends, of 44%, based
on market value of the share. North Energy had
a shareholding of 20% in Reach at year-end and
is represented with two members in the board of
the company.
Investment in Touchstone Exploration
Touchstone Exploration (TXP) is a Canadian
based company, being listed both on the
London and Toronto stock exchanges.
The company has during 2022 focused on
development and commissioning activities in
order to bring the Coho and Cascadura fields on
stream.
10 | Directors’ report
Financial statements for the North Energy
Group
Revenues reported in 2022 was NOK 0.1
million while the revenues reported in 2021
was NOK 0.2 million. The revenue for 2022
is related to consultancy services. Payroll
and related expenses in 2022 were NOK 9.3
million, compared to NOK 9.2 million in 2021.
Previous year the company made a provision
for a severance payment to the former CEO
of NOK 5 million. Excluding this provision,
the underlaying payroll expenses was NOK
4.2 million last year. The increase this year
compared to the underlaying expenses last
year is due to the new management structure
in place from 1 January 2022 where the two
former advisors have been employed as
co-CEOs. A corresponding offset is seen in
consultancy expenses reported under other
operating expenses. Other operating expenses
in 2022 were NOK 4.3 million, down from NOK
18.4 million in 2021. The decrease is partly due to
a provision of NOK 7.5 million booked last year
for a possible claim from the Norwegian Tax
administration related to VAT stemming from
the period from 2016 to 2019 and partly less
consultancy expenses as two former advisors
have been employed as co-CEOs.
Operating loss for 2022 was at NOK 14.0 million,
versus an operating loss of NOK 46.7 million for
2021. The loss this year is mainly the result of
403.4 million. The corresponding figures from
2021 were NOK 326.6 million in investments and
NOK 352.9 million in net asset value.
Going concern
Pursuant to section 3-3a of the Norwegian
Accounting Act, the Board confirms the going
concern assumption and that the financial
statements are prepared on this basis. That
assumption rests on the Company’s financial
position, as well as forecast for 2023.
Comments on the annual financial
statements
The consolidated financial statements of North
Energy ASA have been prepared in accordance
with International Financial Reporting Standards
(“IFRS”) as adopted by the European Union and
in accordance with the additional requirements
pursuant to the Norwegian Accounting Act. The
consolidated figures are for the Group consisting
of North Energy ASA and the newly established
subsidiaries North Industries 1 AS and North
Industries 2 AS. Comparison figures presented for
2021 are the financial figures for North Energy ASA.
The Board is not aware of any significant
considerations that affect the assessment of
the Company’s position as of December 31,
2022, or the net result for the year, other than
those presented in the Directors’ report and the
financial statements.
The company was awarded a NOK 22 million
technology grant from Enova for development
of turbine technology to be used in the Wind
Catcher.
North Energy has a shareholding of 22% in the
company and is represented on the board of
directors with one member and one observer.
Other investments
North Energy has several minor investments
with a combined market value of approximately
NOK 63.3 million at the end of 2022, of which
NOK 30 million are investment grade bonds as
part of liquidity management.
During the year North Energy accumulated a
15.8% stake in Nordic Nanovector ASA, a clinical
trial oncology company, which in light of its
failed clinical trial is in need of a new business
model. North Energy monitors the situation
closely while evaluating strategic alternatives to
the benefit of the company’s shareholders.
Tyveholmen AS, a co-working office facility which
is 50% owned and accoun ted for as an associated
company, contributed with a profit of NOK 0.2
million in 2022.
As per year-end 2022, North Energy had NOK
409.8 million in total investments measured at
market value, while the net asset value was NOK
Directors’ report | 11
drawdown on the bank facility of NOK 7.7 million.
Available liquidity, which includes cash, liquid
investment grade bonds, and unutilised credit
facility, amounted to NOK 74.3 million
The Company has no costs and no activities
related to research and development.
Financial statements for North Energy ASA
The parent company reported an income of
NOK 75.3 million for the year compared to a
loss of NOK 27.8 million last year. The profit this
year is mainly due to the gain on the sale of the
investments in Reach Subsea and Wind Catching
Systems to the newly created subsidiaries North
Industries 1 AS and North Industries 2 AS.
Net cash flow for the parent company was
negative by NOK 36.9 million compared to NOK
79.3 million last year. The negative cash flow
is mainly driven by cash spent on operating
activities of NOK 27.2 million and net cas spent
on investing activities of NOK 17.4 million, partly
offset by drawdown on the new bank facility of
NOK 7.7 million.
The main difference in the statement of financial
position between the parent company and the
group is related to sale of the investments in
Reach Subsea ASA and Wind Catching Systems
AS to 2 wholly owned subsidiaries financed with
intercompany loans.
million. The loss amounts to both basic and diluted
earnings per share of negative NOK 0.11 this year,
versus negative NOK 0.24 per share in 2021.
Total book value of assets at year-end were NOK
327.6 million, down from NOK 339.0 million at
year-end 2021. The decrease is mainly due to a
reduction in cash and a reduction in the value of
financial investments, partly offset by an increase
in book value of associated companies.
Total equity at the end of the year was NOK
308.2 million, down from NOK 321.3 million at
the end of 2021. The decrease is explained by
total comprehensive loss of NOK 13.1 million for
2022. The Company’s equity ratio stood at 94.0
percent at the end of the year.
During the year, the Company established a
new multicurrency credit facility with DNB for a
total amount of NOK 49 million. The Company
uses listed financial investments as collateral for
the credit facility. At year-end the Company has
utilised NOK 7.7 million of the facility.
North Energy recorded NOK 3.1 million in cash at
the end of the year. This is down from NOK 40.0
million at the end of last year. The net negative
cash flow of NOK 36.9 million in 2022, is mainly
due to cash used in investing activities of NOK
17.3 million as well as cash flow from operating
activities of NOK 27.3 million partly offset by the
decreased market value of investments partly
offset by income from associated companies.
The market value of the investment in
Touchstone Exploration dropped by NOK 54.3
million through the year, while the investment
in the associated company Reach Subsea
contributed with a net result through profit and
loss of NOK 24.4 million and the associated
company Wind Catching Systems contributed
with a net result of NOK 13.8 for the year.
Net financial items for 2022 were positive at NOK
1.0 million, versus NOK 0.5 million for 2021. The
positive figure this year, as well as last year, is
related to interest income.
The result before tax in 2022 is a loss of NOK 13.1
million compared to a loss of NOK 46.2 million
reported last year. The loss is mainly due to a
negative change in fair value of investments of
NOK 37.5 million and operating expenses of NOK
15.0 offset by a positive result from investments
in associates of NOK 38.4 million.
Change in deferred tax in 2022 was nil, while
2021 was an income of NOK 18.4 million. The
company has deferred tax assets of NOK 14.6
million that are not recognised in the balance
sheet at the end of the year.
Loss for the year 2022 was NOK 13.1 million,
compared to a loss for the year 2021 of NOK 27.8
12 | Directors’ report
well as guidelines for handling matters between
the Board and the executive management. The
instructions for the Nomination Committee
specify its mandate and provide guidelines on its
composition and mode of working.
The Company’s Articles of Association provide
no guidance on the composition of the Board,
other than that it must comprise of three to nine
Directors. The articles do not authorise the Board
to purchase the Company’s own shares or to
issue shares.
Risk assessment
Overall objectives and strategy
North Energy’s financial risk management is
intended to ensure that risks of significance for
the Company’s goals are identified, analysed,
and managed in a systematic and cost-efficient
manner. The Company is exposed to financial
risk in various areas, as described below.
Monitoring of risk exposure and assessment
of the need to deploy financial instruments are
pursued continuously.
Operational risk
North Energy is an enterprise where operational
risk is closely related to its expertise and the
integrity of our IT systems. The Company
therefore devotes attention to developing
its expertise and organisation, ensuring that
measures for cyber security are up to date, and
to its management systems.
to the code has been included in this Annual
Report. Any non-compliance with the code is
specified and explained in the status report.
The Board intends to take account of all factors
relevant to the Company’s overall risk picture.
By doing so, it aims to ensure that the collective
operational and financial exposure is at a
satisfactory level. In accordance with market
practice for listed companies the Company has
purchased liability insurance to cover individual
and collective liability exposure for the board
members and CEO.
North Energy’s Articles of Association contain
no provisions which wholly or partly exceed
or restrict the provisions in chapter 5 of the
Norwegian Public Companies Act.
Several considerations, which collectively ensure
a good and broad composition, have been
considered when electing the Board. These
include an appropriate gender distribution, good
strategic, industry competence and accounting
expertise, a good division between owner-
based and independent candidates. The Board
functions collectively as an Audit Committee.
Instructions have been developed and adopted
for the CEO, the Board and the Company’s
Nomination Committee. The instructions for
the Board specify its principal duties and the
responsibilities of the CEO towards the Board, as
The Board regards the Company’s financial
position as of end 2022 as solid.
Allocation of net profit
The Board of North Energy proposes that the
net loss of NOK 27.8 million in the company is
transferred to other equity. Further, based on
the new dividend policy, the Board proposes to
distribute a cash dividend of NOK 0.10 per share
to shareholders. The total proposed dividend
of NOK 11.9 million is subject to approval at the
Annual General Meeting.
Corporate governance
Corporate governance in North Energy is based
on the Norwegian code of practice for corporate
governance. A separate status report related
Directors’ report | 13
accidents relating to North Energy’s activities
were reported in 2022. North Energy’s goal is to
prevent any incidents or accidents to employees
or partners working with the Company and to
conduct business in a way that will not damage
the environment. Based on best judgement,
the Company’s employees will conduct their
operations in a safe, environmentally responsible,
and ethically sound manner. North Energy
will remain focused on protecting health of
employees and communities and continue to
follow advice from public health officials.
Climate risk
Climate risk is the potential for climate change
to create adverse consequences for human or
ecological systems. This includes impacts on
lives, livelihoods, health and wellbeing, economic,
social and cultural assets and investments,
infrastructure, services provision, ecosystems
and species. For North Energy, it can be defined
in practical terms as the measure of vulnerability
to climate-related impacts that have financial
consequences, or that may affect various aspects
of financial performance. There are two types of
climate risk that the company need to be aware
of: physical climate risk and transition climate risk.
Physical climate risk describes the potential
for physical damage and financial losses as a
result of increasing exposure to climate hazards
resulting from climate change. The impact of
limiting the risk of unforeseen requirements
for liquidity contributions from North Energy.
However, changes in business conditions
might weaken our main investment’s financial
positions, which might affect North Energy’s
liquidity longer term.
Interest rate risk
As of year-end 2022 the Company is directly
exposed to interest rate changes as the
company has partly utilized the new credit
facility. Fluctuations in interest rates may also
affect the financial position of and the market
valuation of our investments and through that
affect our equity.
Credit risk
The Company’s receivables are as of end 2022
marginal and the risk of bad debts is, therefore,
considered low.
Foreign exchange
The foreign exchange risk through transactions
is low due to limited volumes. However, the
Company invest in securities that are registered
in foreign currencies and are through these
investments exposed to exchange rate
fluctuations.
HSE and the natural environment
The work environment in North Energy is
regarded as satisfactory. No incidents or
Market risk
With a growing investment business, North
Energy is exposed to market risk involving
the risk of changing conditions in the specific
marketplace in which the Company makes
investments. Sources of market risk include
changes in market sentiment as well as
recessions, political turmoil, changes in interest
rates, natural disasters, climate changes and
regulatory changes related to climate, and
terrorist attacks. During 2022, the war in Ukraine
and growing political tensions between China and
the western world has created uncertainty about
the outlook for growth in global trade. At the
same time, inflation has surged to levels not seen
since the 80s, leading central banks to embark
on a journey of tightening monetary policies.
Although the global economy has held up well
through 2022, recession risks are mounting and it
is uncertain how markets will cope.
Liquidity risk
The Group’s ongoing financing needs are
forecasted on a continuous basis, and the level
of activity is tailored to liquidity. The Company’s
primary source of funding is equity while the
primary source of cash income is dividend
income and interest income from investments.
North Energy has a solid balance sheet and a
sound financial situation with limited liabilities.
Also, it is North Energy’s assessment that the
main investments have sound financial positions,
14 | Directors’ report
irrespective of gender, religion, race, disability,
national origin, or age. Currently there are only
male employees, however, future recruitments
will be based on the principle of equal
opportunity.
At the Company’s General Meeting in May 2022,
the Board of Directors were re-elected. Out of the
three directors elected, one is female.
The rate of absence due to illness during 2022
was below 1 per cent of total hours worked.
The Board considers it to be of importance that
employees regard North Energy as a safe and
motivating workplace.
Remuneration is determined in accordance with
the content of the work and the employee’s
qualifications. The remuneration of the executive
management is described in the notes to the
financial statements. Also, in accordance with
the Public Limited Liability Companies Act §
6-16, the guidelines for remuneration to senior
executives in North Energy ASA was adopted
by the Annual General Meeting in 2022. The
signed remuneration report for 2022 will be put
forth the Annual General Meeting in 2023 and is
published together with the annual report. The
remuneration report can be found on
www.northenergy.no
physical climate risk on North Energy’s direct
business operation is regarded low.
Transition climate risks are business risks
related to a transition away from fossil fuels and
other greenhouse gas-emitting activities. The
impact of transitional climate risks on North
Energy’s investment business is somewhat
higher as these risks may impact the various
investments adversely. The rapid transition away
from energy production from traditional fossil
fuels might result in stranded assets, increased
capital expenditure, loss of market share, legal
liabilities from failing to comply with regulatory
requirements, for some of the investments.
To mitigate this risk, North Energy manages
and diversifies the portfolio of investments
by introducing investments in renewables
companies such as Wind Catching Systems.
Within our industrial investment Reach Subsea,
the transitional climate risk is partly mitigated by
increasing services delivered to the renewable
business sector and the introduction of Reach
Remote solution that will dramatically reduce the
carbon footprint, amongst other.
Human resources and equal opportunities
North Energy had at the end of the year three
employees, and the Company office is in Oslo.
North Energy aims to have a good gender
balance and is an equal opportunity employer
Directors’ report | 15
North Energy must run its business without
this coming at the expense of basic human
rights and decent working conditions.
Therefore, North Energy carries out a due
diligence assessment of its own and suppliers’
operations.
North Energy strives to follow the OECD
guidelines for due diligence assessments. In this
assessment, we look at how large purchases
we make from each individual supplier, which
countries they operate in and whether they have
their own goals and processes to safeguard
human rights and good working conditions. The
outcome of the assessment will be published
within the deadline 1 of July 2023 on www.
northenergy.no.
Ownership
North Energy had 2,081 shareholders at year-end
2022 and the top 20 owners together held 64.6
percent of the shares in the North Energy. The
share price on the last day of trading in 2022
was NOK 2.12, while on the last day of trading in
2021 the share price was NOK 2.68. The share
price peaked at NOK 2.9 on 24 August, while
the lowest price in 2022 was NOK 2.005 on 13
December. As per the 24 February 2023, the
share price was NOK 2.17 representing a market
capitalisation of North Energy of NOK 258.3
million.
employees. Touchstone is committed to working
with partners both at national and local levels to
ensure high environmental standards in Trinidad.
North Energy has developed a policy state-
ment which further describes its commitment
to CSR. The document is published on www.
northenergy.no.
Transparency Act
The Transparency Act entered into force on 1
July 2022. The Transparency Act is intended to
help us reduce the risk of businesses causing or
contributing to violations of human rights. It also
contributes to the fact that we must do our part
to ensure decent working conditions with our
suppliers and with our owners, as well as with
ourselves.
The Act shall promote companies’ respect
for basic human rights and decent working
conditions. This applies to the company’s own
business, suppliers and the value chain of
the suppliers. The law requires, among other
things, the businesses to carry out so-called due
diligence assessments in order to understand
the risk of possible breaches - and to introduce
measures where necessary. Furthermore, the
business has a duty to inform about what is used
as a basis for the due diligence assessments and
the results of these.
Corporate social responsibility (“CSR”)
North Energy’s vision is to be a successful and
respected investment company with focus on
long term value creation. North Energy’s most
important contribution to society is to create
value and invest in forward looking companies
that operate in an environmentally, ethically,
and socially responsible manner. The Board
of North Energy gives emphasis to a positive
contribution being made by the Company
to those sections of society affected by its
operations, while simultaneously looking after
the interests of its owners. The Company follows
this up by integrating social and environmental
considerations in its strategy and day-to-day
operations. The operations of the company
North Energy ASA have negligible effect on the
external environment.
As a significant shareholder in several companies,
North Energy works to promote businesses that
are responsible and sustainable, including the
financial, social, and environmental consequences
of the operations. This is demonstrated by the
company’s main industrial investment, Reach
Subsea, with the launch of the Reach Remote
solution. This is an innovative service solution
which will virtually eliminate carbon footprint
when brought to market later in 2023. Further
the Company’s main financial investment,
Touchstone Exploration, emphasizes on recruiting
local staff and have a high degree of female
16 | Directors’ report
We still expect a muted outlook for global
growth in 2023, with increasing recession
risks, as the global economy continues to face
significant headwinds on multiple fronts. The full
impact of higher interest rates has most likely
not been felt across the global economy and this
will continue to play out during the first half of
2023.
North Energy intends to further develop the
company in accordance with its strategy and
will seek to maintain optionality in order to
successfully execute its long-term strategy
and actively seek opportunities to develop and
expand the industrial portfolio.
well as the war in Ukraine, will limit supply side
growth and support prices. Natural gas prices
have seen dramatic declines over the winter
most likely caused by a combination of factors
related to both demand destruction and some
improvement in supply. Energy companies
globally have reported record profits for 2022 as
higher realized prices feed through to financial
statements.
Developments in global financial markets
stabilized in Q4 2022 as the early shock of
dramatically higher interest rates has been
absorbed by the markets. Early 2023 has seen
strong performance supported by emerging
optimism of a near term peak in both inflation
and interest rates.
Outlook
As we enter 2023 the outlook for the global
economy looks mixed as central banks have
raised interest rates to combat inflation, while
most parts of the global economy continue to
perform reasonably well. Although certain signs
of moderation are evident in goods inflation,
the key underlying wage and services inflation
is still substantially above inflation targets set
by central banks globally. The full effects on the
economy of higher interest rates are most likely
to be observed in the next 6-12 months.
Energy prices moderated somewhat during the
second half of 2022, but continue to be high
compared with historical levels. Low levels of
energy investments over the last decade, as
Oslo, 30 March 2023
Anders Onarheim Elin Karfjell Jogeir Romestrand
Chair Director Director
Rachid Bendriss Didrik Leikvang
co-CEO co-CEO
Directors’ report | 17
18 | Corporate Governance
The following information is presented according
to the same structure as the code and contains
the same 15 main elements.
1. Implementation and reporting on
corporate governance
It is the executive management’s job to ensure
that the areas of responsibility, individually and
collectively, are prioritized according to the Com-
pany’s values and business codes. The Company
has established clear guidelines for corporate
social responsibility. These can be found on the
Company’s website, www.northenergy.no.
2. The business
North Energy’s business purpose is to directly or
indirectly own, manage and provide financing for
activities within the energy industry, and other
industries where the company has relevant
competence.
North Energy targets to become a successful
and respected investment company. The Com-
pany will achieve this through solid fundamental
analysis and a focus on long-term value creation.
Where relevant, the company seeks to create val-
ue for the shareholders in a sustainable manner.
Corporate Governance
Pursuant to section 3, sub-section 3b of the Norwegian Accounting Act, North Energy is required to include a description of its
principles for good corporate governance in the Directors’ report of its Annual Report or, alternatively, refer to where this information
can be found. The Norwegian Corporate Governance Board (NCGB) has issued the Norwegian code of practice for corporate
governance (the code), which can be found at www.nues.no. Observance of the code is based on the “comply or explain” principle,
which means that companies must explain either how they comply with each of the recommendations in the code or why they
have chosen an alternative approach.
The Euronext Oslo Stock Exchange requires that listed companies on Oslo Børs and Euronext Expand provide an explanation of
their corporate governance policy annually. Current requirements for companies listed on the Oslo Stock Exchange can be found
at https://www.euronext.com/en/markets/oslo.
Corporate Governance | 19
North Energy’s Articles of Association specify
clear parameters for its operations, while its
vision, goals and strategies are at the core of its
management philosophy and operations.
3. Equity and dividends
The Board of Directors has from the accounting
year 2022 adopted a new dividend policy, which
states that “The Company intends to distribute
an annual dividend that approximates 3% of year
end Net Asset Value”. In accordance with the new
policy, the Board intends to propose a dividend
of NOK 0.10 per share for 2022. The Company’s
dividend policy is also outlined on its website.
The Company has a strong financial platform and
a solid foundation for executing its strategy as an
industrial investment company. Going forward,
available financial funds are expected to be de-
ployed to support this core strategy.
All proposals from the Board concerning divi-
dends must be approved by shareholders at the
General Meeting to ensure that the Company’s
equity and dividend are consistent with its objec-
tives, strategies, and risk profile.
Equity as of December 31, 2022, for the group was
NOK 308 million, compared with NOK 321 million
at year-end 2021, giving an equity ratio of 94 per
cent, which is at the same level as year-end 2021.
Equity for the parent company was NOK 397
million at year-end 2022, compared to NOK 321
million at year-end 2021. The increase from last
year is mainly due to the realized profit from the
sale of the investments in Reach Subsea and
Wind Catching Systems from the parent company
to the newly established subsidiaries.
The Company established during the year a new
multicurrency credit facility with DNB for a total
amount of NOK 49 million where the Company
uses listed financial investments as collateral. This
gives the Company more flexibility when it comes
to liquidity management.
Cash and cash equivalents totaled NOK 3 million
as of December 31st while the credit facility was
utilized with NOK 7.7 million. Available liquidity
of NOK 74.3 million, which consist of cash, liquid
investment grade bonds, and unutilized credit
facility, is regarded as satisfactory in relation to the
Company’s future obligations.
At the AGM on May 9, 2022, the Company’s
Board was granted authorization to increase the
share capital with 11,904,706 shares, equaling an
increase of 10 per cent. At present, this authoriza-
tion is not used.
4. Equal treatment of shareholders and trans-
actions with close associates
Should North Energy be a party to any trans-
action that may involve a close associate of the
Company or other companies that Directors,
senior executives or their close associates have a
significant interest in, whether directly or indi-
rectly, the parties concerned must immediately
notify the Board. All such transactions must be
approved by the Chief Executive Officer and the
Board and, where required, a market notification
must be sent.
5. Freely negotiable shares
The North Energy share is listed on the Euronext
Expand Oslo exchange. All shares are freely
negotiable. The Articles of Association impose
no restrictions on the negotiability of the share.
6. General Meetings
The AGM is North Energy’s highest authority.
The Company’s AGM in 2022 was held in
accordance with the Public Companies Act.
The Board endeavors to ensure that the
General Meeting is an effective forum for
communication between the Board and the
Company’s shareholders. Thus, the Board makes
provision for the highest possible participation
by the Company’s owners at the General
Meeting. Notice of the meeting and supporting
documentation for items on the agenda are
made available on the Company’s website no
later than 21 days before the General Meeting.
Provision is also made for shareholders to vote in
advance of the Company’s General Meeting, and
20 | Corporate Governance
elections are organized such that it is possible
to vote individually for candidates nominated
to serve in the Company’s elected bodies.
Shareholders who cannot attend the General
Meeting in person are able to appoint a proxy to
vote on their behalf. Proxy forms are provided
that allow the proxy to be instructed how to vote
on each agenda item.
The Board determines the agenda for the
General Meeting. However, the most important
items on the agenda are dictated by the Public
Companies Act and the Company’s Articles of
Association. Meeting minutes are published on
the Company’s website the day after the General
Meetings, at latest.
7. Nomination Committee
The Nomination Committee submits recommen-
dations for candidates to be elected, along with
a justification, to the General Meeting, as well as
nominates the Chair of the Board. Furthermore,
the Committee will submit substantiated propos-
als for the remuneration of Directors and rec-
ommend Committee members. Establishment
of the Committee is stipulated by the Articles of
Association, and its work is regulated by instruc-
tions adopted by the General Meeting.
Nomination Committee members serve inde-
pendently of the Board, and the Company’s
executive management. Members of the Com-
Corporate Governance | 21
board meetings. Ensuring that the work of the
Board is conducted in an efficient and correct
manner in accordance with relevant legislation
is the responsibility of the Chair. The Board
ensures that the auditor fulfils a satisfactory and
independent control function. It presents the
auditor’s report to the General Meeting, which
also approves the remuneration of the auditor.
It was resolved in 2014 that the Audit Commit-
tee’s duties would be discharged directly by the
Board. Likewise, the duties of the Compensation
Committee, established by the Board in 2014,
is now handled directly by the Board following
a resolution in a Board meeting in 2017. The
objective of the Compensation Committee is to
ensure that compensation arrangements sup-
port the Company’s strategy and enable it to
recruit, motivate and retain managers of a high
standard, while complying with requirements set
by governing bodies, fulfilling shareholder expec-
tations and being in line with the expectations of
the rest of the workforce. The Board conducts an
annual evaluation of its work, competence, and
performance.
Ten board meetings were held in 2022, out of
which four meetings were conducted via e-mail
circulation while the rest of the meetings were
conducted physically or by video/audio confer-
ences. The attendance at the meetings from the
Board members were 100%.
Directors own shares directly or indirectly in
North Energy. No director holds options to buy
further shares.
On December 8, 2021, the company announced
changes to the management whereas Mr. Knut
Sæberg retired from his position as CEO on
December 31, 2021, and as of January 1, 2022,
Mr. Rachid Bendriss and Mr. Didrik Leikvang
accepted roles as co-CEO in the company. At the
same date the former advisory agreements were
terminated.
9. The work of the Board of Directors
The Board’s work is regulated by instructions. Its
duties consist primarily of managing North En-
ergy, which includes determining the Company’s
strategy and overall goals, approving its action
program, and ensuring an acceptable organi-
zation of the business in line with the Compa-
ny’s Articles of Association. The Board can also
determine guidelines for the business and issue
orders in specific cases. The Board must look
after North Energy’s interests, and not act as
individual shareholders.
A clear division of responsibility has been es-
tablished between the Board and the executive
management. The Chief Executive is responsible
for operational management of the Company
and reports regularly to the Board. The admin-
istration is responsible for preparing matters for
mittee receive a fixed remuneration which is
not dependent on results. The General Meeting
decides on all recommendations made by the
Committee.
The members of the Nomination Committee are
Hans Kristian Rød (Head), and Merete Haugli.
8. Board of Directors: composition and
independence
Following the recommendation from the Nom-
ination Committee approved at the AGM, the
Board consists of two men and one woman
who serve as shareholder-elected Directors. All
have broad experience. Two of these Directors
are elected independently by the Company’s
shareholders. The Directors provide industry-spe-
cific professional expertise and experience from
national and international companies. More
information on each Director is available at
www.northenergy.no.
Shareholder-elected Directors are elected for
two-year terms. Elections are conducted in such
a way that new directors can join the board
every year.
Apart from Chairman Anders Onarheim, North
Energy regards its Directors as independent
of the Company’s executive management and
significant business partners. At present, all three
22 | Corporate Governance
the strategy plan based on the company’s
values and ethical guidelines, The Board is
also considering the responsibility involved,
qualifications, the complexity of the work and
the results achieved.
The Board issues a yearly remuneration report
according to the requirements as set out in
the Public Limited Liability Companies Act §
6-16 b, and the Regulations on guidelines and
report on remuneration for senior executives §
6. The report should be approved at the Annual
General Meeting.
13. Information and communications
North Energy keeps its shareholders and inves-
tors regularly informed about its commercial and
financial status. The Board is conscientious that
all stakeholders shall receive the same infor-
mation at the same time, and all financial and
commercial information is made available on
the Company’s website simultaneously. Stock ex-
change announcements are distributed through
www.newsweb.no and made available on the
Company’s website.
The annual financial statements for North En-
ergy are made available on its website at least
three weeks before the General Meeting. Interim
reports are published within two months after
the end of each quarter. North Energy publishes
an annual financial calendar which is available
11. Remuneration of the Board of Directors
The Nomination Committee recommends the
Directors’ fees to the General Meeting, and takes
account of their responsibility, qualifications, time
spent and the complexity of the business. Direc-
tors’ fees are not profit-related. North Energy has
not issued any options to its shareholder-elected
Directors.
None of the shareholder-elected Directors have
undertaken special assignments for North En-
ergy other than those presented in this report,
and none have received compensation from the
Company other than normal Directors’ fees.
12. Salary and other remuneration of
executive personnel
On 9 May 2022 the AGM adopted the proposal
from the Board of Directors for new guidelines
for remuneration to senior executive in North
Energy ASA. The guidelines are compliant
with the requirements as set out in the Public
Limited Liability Companies Act § 6-16 a, and
the Regulations on guidelines and report on
remuneration for senior executives.
The Board determines the remuneration of
the senior executives, and the remuneration
is determined on the basis of an overall
assessment where the main emphasis in the
variable part of the remuneration is based
on achieved results and implementation of
10. Risk management and internal control
Strict standards are set for the Company’s inter-
nal control and management system. Work on
further development and improvement of North
Energy’s management system and associated
documentation is a priority job in the Compa-
ny’s corporate governance and risk manage-
ment. Emphasis have been put on developing
risk systems and internal control procedures
adapted to the Company’s strategy as an invest-
ment company. The Company’s management
system is a good tool for the executive manage-
ment and the workforce and reduces the risk of
errors and misunderstandings. The system fa-
cilitates collaboration and learning and ensures
continuity in the execution of the company’s
processes.
The executive management regularly follow
up conditions which could pose a financial
risk to the Company, and reports these to the
Board. Reporting to the Board by the Compa-
ny gives emphasis both to the on-going risk in
daily operations and to risk associated with the
investment opportunities presented. In addition,
the Board carry out an overall risk assessment
at least twice a year which takes account of all
the Company’s activities and the exposure these
involve. The Board does also at regular intervals
have the auditor’s assessments of financial risk
presented.
Corporate Governance | 23
the conduct of audit work and attends board
meetings when the consideration of accounting
matters requires their presence. In at least one
of these meetings, the auditor makes a presenta-
tion to the Board without the executive man-
agement being present. The auditor presents a
declaration of independence and objectivity. Re-
lations with the auditor are regularly reviewed by
the Board to ensure that the auditor exercises an
independent and satisfactory control function.
The Board presents the auditor’s fee to the Gen-
eral Meeting for approval by the shareholders.
shareholders in such an event. Unless special
grounds exist, the Board will not seek to prevent
takeover offers for the Company’s business or
shares. Should an offer be made for the shares
of North Energy, the Board will issue a statement
with its recommendation as to whether
shareholders should accept it.
15. Auditor
The annual financial statements are audited by
PricewaterhouseCoopers AS. The Board receives
and considers the auditor’s report after the finan-
cial statements for the relevant year have been
audited. The auditor submits an annual plan for
on the Oslo Stock Exchange website and on
www.northenergy.no. The Board emphasizes
openness and equal treatment in relation to all
relevant parties in the market and strives always
to provide as correct a picture as possible of the
Company’s financial position.
14. Takeovers
North Energy’s Articles of Association contain
no restrictions on or defense mechanisms
against the acquisition of the Company’s shares.
In accordance with its general responsibility for
the management of North Energy, the Board
will act in the best interests of all the Company’s
Oslo, 30 March 2023
Anders Onarheim Elin Karfjell Jogeir Romestrand
Chair Director Director
Rachid Bendriss Didrik Leikvang
co-CEO co-CEO
Financial
Statements
& Notes
Financial Statements & Notes – North Energy | 25
Financial Statements
Income statement
PARENT COMPANY GROUP
2022 2021 (NOK 1 000) Note 2022 2021
113 178 Sales 113 178
(9 252) (9 165) Payroll and related expenses 5 (9 252 ) (9 165 )
(1 537) (1 096) Depreciation and amortisation 11, 16 (1 537 ) (1 096 )
(4 233) (18 351) Other operating expenses 6 (4 273 ) (18 351 )
(37 526) (45 152) Change in fair value of financial investments 21, 2 (37 526 ) (45 152 )
126 223 26 862 Net result from investments in associates 19 38 435 26 862
73 788 (46 724) Operating profit/(loss) (14 041 ) (46 724 )
1 855 593 Financial income 17 1 308 593
(339) (80) Financial expenses 17 (339 ) (80 )
1 515 512 Net financial items 969 512
75 303 (46 212) Profit/(loss) before income tax (13 072 ) (46 212 )
0 18 383 Income tax 15 0 18 383
75 303 (27 829) Profit/(loss) for the year (13 072 ) (27 829 )
Attributable to:
75 303 (27 829) Owners of North Energy ASA (13 072 ) (27 829 )
75 303 (27 829) (13 072 ) (27 829 )
Earnings per share (NOK per share)
0.63 (0.24) - Basic 13 (0 . 11 ) (0. 24 )
0.63 (0.24) - Diluted 13 (0 . 11 ) (0. 24 )
26 | Financial Statements & Notes – North Energy
Statement of comprehensive income
PARENT COMPANY GROUP
2022 2021 (NOK 1 000) Note 2022 2021
75 303 (27 829) Profit/(loss) for the year (13 072 ) (27 829 )
Other comprehensive income, net of tax:
0 0 Total other comprehensive income, net of tax 0 0
75 303 (27 829) Total comprehensive income/(loss) for the year (13 072 ) (27 829 )
Attributable to:
75 303 (27 829) Owners of North Energy ASA (13 072 ) (27 829 )
75 303 (27 829) (13 072 ) (27 829 )
Financial Statements & Notes – North Energy | 27
Statement of financial position
PARENT COMPANY GROUP
ASSETS
31/12/22 31/12/21 (NOK 1 000) Note 31/12/22 31/12/21
ASSETS
Non-current assets
189 148 Property, plant and equipment 16 189 14 8
6 011 3 103 Right-of-use assets 11 6 011 3 103
120 0 Investments in subsidiaries 0 0
4 341 141 312 Investments in associates 19 171 610 141 312
0 0 Deferred tax asset 15 0 0
0 120 Other receivables 7 0 120
10 661 144 683 Total non-current assets 177 810 144 683
Current assets
3 525 195 Trade and other receivables 8 3 645 19 5
255 604 0 Loan to subsidiaries 0 0
143 069 154 129 Financial investments at fair value through profit and loss 21 143 069 154 129
3 056 39 986 Cash and cash equivalents 9 3 056 39 986
405 254 194 311 Total current assets 149 770 194 311
415 915 338 993 Total assets 327 580 338 993
28 | Financial Statements & Notes – North Energy
Statement of financial position
EQUITY AND LIABILITIES
31/12/22 31/12/21 (NOK 1 000) Note 31/12/22 31/12/21
EQUITY
119 047 119 047 Share capital 10 119 047 119 047
(3 411) (3 411) Treasury shares 10 (3 411 ) (3 411 )
850 378 850 378 Share premium 850 378 850 378
30 691 30 691 Other paid-in capital 30 691 30 691
(600 101) (675 404) Retained earnings (688 476 ) (675 404 )
396 604 321 301 Total equity 308 229 321 301
Liabilities
Non-current liabilities
0 0 Deferred tax liability 15 0 0
4 802 2 537 Leasing liabilities 11 4 802 2 537
0 2 513 Other non-current liabilities 12 0 2 513
4 802 5 050 Total non-current liabilities 4 802 5 050
Current liabilities
7 723 0 Current borrowings 7 723 0
1 325 636 Leasing liabilities, current 11 1 325 636
46 30 Trade creditors 46 30
0 0 Tax payable 15 0 0
5 415 11 977 Other current liabilities 12 5 455 11 977
14 509 12 643 Total current liabilities 14 549 12 643
19 311 17 693 Total liabilities 19 351 17 693
415 915 338 993 Total equity and liabilities 327 580 338 993
Oslo, 30 March 2023
Anders Onarheim Elin Karfjell Jogeir Romestrand
Chair Director Director
Rachid Bendriss Didrik Leikvang
co-CEO co-CEO
Financial Statements & Notes – North Energy | 29
Statement of changes in equity
GROUP
Other
Share Treasury Share paid-in Retained Total
(NOK 1 000) capital shares premium capital earnings equity
Equity at 1 January 2021 119 047 (3 411 ) 903 141 30 691 (647 575 ) 401 893
Total comprehensive income for 01.01.21-31.12.21 (27 829 ) (27 829 )
Paid dividend (52 763 ) (52 763 )
Equity at 31 December 2021 119 047 (3 411 ) 850 378 30 691 (675 404 ) 321 301
Total comprehensive income for 01.01.22-31.12.22 (13 072 ) (13 072 )
Equity at 31 December 2022 119 047 (3 411 ) 850 378 30 691 (688 476 ) 308 229
PARENT COMPANY
Other
Share Treasury Share paid-in Retained Total
(NOK 1 000) capital shares premium capital earnings equity
Equity at 1 January 2021 119 047 (3 411) 903 141 30 691 (647 575) 401 893
Total comprehensive income for 01.01.21-31.12.21 (27 829) (27 829)
Paid dividend (52 763) (52 763)
Equity at 31 December 2021 119 047 (3 411) 850 378 30 691 (675 404) 321 301
Total comprehensive income for 01.01.22-31.12.22 75 303 75 303
Equity at 31 December 2022 119 047 (3 411) 850 378 30 691 (600 101) 396 604
30 | Financial Statements & Notes – North Energy
Cash flows statement
PARENT COMPANY GROUP
2022 2021 (NOK 1 000) Note 2022 2021
CASH FLOWS FROM OPERATING ACTIVITIES
75 303 (46 212) Income before income tax (13 072 ) (46 212 )
Adjustments:
1 537 1 096 Depreciation 11,16 1 537 1 096
258 138 Pensions 25 8 138
37 526 45 152 Change in fair value of financial investments 21 37 526 45 152
(126 223) (26 862) Net result from investments in associates 19 (38 435 ) (26 862 )
16 0 Changes in trade creditors 16 0
(15 625) 11 087 Changes in other accruals 12 (15 159 ) 11 087
(27 208) (15 600) Net cash flows from operating activities (27 328 ) (15 600 )
CASH FLOWS FROM INVESTING ACTIVITIES
(84) (42) Purchase of property, plant and equipment 16 (8 4 ) (42 )
(3 167) (10 000) Investment in associates 19 (3 167 ) (10 000 )
0 0 Divestment of associates 0 0
8 303 6 919 Dividends from associates 19 8 303 6 919
3 000 0 Distribution from associates 3 000 0
(89 472) (13 385) Purchase of financial investments 18 (89 472 ) (13 385 )
64 094 5 526 Proceeds from sales of financial investments 18 64 094 5 526
(120) 0 Investment in subsidiaries 12 0 0
(17 446) (10 982) Net cash flows from investing activities (17 326 ) (10 982 )
CASH FLOWS FROM FINANCING ACTIVITIES
0 (52 763) Dividends paid 10 0 (52 763 )
0 0 Loan to subsidiaries 0 0
7 723 0 Drawdown bank facility 7 723 0
7 723 (52 763) Net cash flows from financing activities 7 723 (52 763 )
(36 931) (79 345) Net change in cash and cash equivalents (36 931 ) (79 345 )
39 986 119 332 Cash and cash equivivalents at 1 January 9 39 986 119 332
3 056 39 986 Cash and cash equivivalents at 31 December 9 3 056 39 986
Financial Statements & Notes – North Energy | 31
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Financial Statements & Notes – North Energy | 55
We declare, to the best of our judgement, that
the annual financial statements for the period
from 1 January to 31 December 2022 have been
prepared in accordance with the applicable
accounting standards, and that the information
in the accounts fairly reflects the Company’s
assets, liabilities, financial position, and results as
a whole.
We also declare that the Directors’ report pro-
vides a true and fair view of the Company’s and
Group’s performance, results, and position, along
with a description of the most important risk and
uncertainty factors facing the Company.
.
Responsibility statement
by the Board of Directors and CEO
Oslo, 30 March 2023
Anders Onarheim Elin Karfjell Jogeir Romestrand
Chair Director Director
Rachid Bendriss Didrik Leikvang
co-CEO co-CEO
56 | Financial Statements & Notes – North Energy
In 2022, the North Energy share price depreciated
by 20.9 per cent. In comparison, an investment
in the Oslo Børs Benchmark Index over the same
period provided a positive return of 2.0 per cent,
while the energy index yielded a positive return
of 42.5 per cent. During the year, 27.1 million North
Energy shares changed hands on the Oslo Stock
Exchange, down from 58.4 million in 2021, repre-
senting a daily average trading volume of 107,270
shares.
Dividend policy
The Board of Directors has adopted a new
dividend policy, which states that “The Compa-
ny intends to distribute an annual dividend that
approximates 3% of year end Net Asset Value”.
In accordance with the new policy, the Board
intends to propose a dividend of NOK 0.10 per
share for 2022.
Table: Top 20 shareholder as of March 21, 2023
Shareholder information
North Energy is listed on the Euronext Expand Oslo marketplace. The Company has one share class, and each share carries one
vote at the general meetings.
Investor Number of shares % of total Type Country
1 AB INVESTMENT AS 22 618 915 19,00 % Ordinary Norway
2 CELISA CAPITAL AS 11 753 284 9,87 % Ordinary Norway
3 ISFJORDEN AS 9 514 849 7,99 % Ordinary Norway
4 INTERTRADE SHIPPING AS 3 750 000 3,15 % Ordinary Norway
5 TRIOMAR AS 3 100 000 2,60 % Ordinary Norway
6 CORUNA AS 3 000 000 2,52 % Ordinary Norway
7 ARNT HAGEN HOLDING AS 2 703 793 2,27 % Ordinary Norway
8 SALTEN KRAFTSAMBAND AS 2 419 215 2,03 % Ordinary Norway
9 BAKKANE ARVID 2 100 009 1,76 % Ordinary Norway
10 BOYE HANS JØRGEN 2 026 264 1,70 % Ordinary Norway
11 HEDEN HOLDING AS 1 919 340 1,61 % Ordinary Norway
12 NORTH ENERGY ASA 1 795 472 1,51 % Ordinary Norway
13 TAJ HOLDING AS 1 792 030 1,51 % Ordinary Norway
14 CLEARSTREAM BANKING S.A. 1 534 601 1,29 % Nominee Luxembourg
15 ROME AS 1 440 000 1,21 % Ordinary Norway
16 ORIGO KAPITAL AS 1 343 569 1,13 % Ordinary Norway
17 NORDNET LIVSFORSIKRING AS 1 273 392 1,07 % Ordinary Norway
18 Avanza Bank AB 1 267 787 1,06 % Nominee Sweden
19 SÆBERG KNUT 1 002 352 0,84 % Ordinary Norway
20 PEDERSEN ROLF IVAR 976 098 0,82 % Ordinary Norway
Total number owned by top 20 77 330 970 64,96 %
Total number of shares 119 047 065 100,0 %
Financial Statements & Notes – North Energy | 57
Ownership structure
At the end of 2022 North Energy had 2,081 shareholders, down from
2,202 shareholders at the end of 2021. Approximately 5.1 per cent of
the Company’s shares were owned by foreign investors at the end of
2022, which is up from 6.1 per cent last year.
The Company’s employees, management, and Board held in total 39.9
per cent of the shares in the Company by the end of the year.
North Energy’s 20 largest shareholders held 64.6 per cent of the
shares as of 31 December 2022.
Share capital
North Energy’s share capital on 31 December 2022 was NOK
119,047,065 divided into 119,047,065 shares, each with a nominal value
of NOK 1. The Company holds 1,795,472 treasury shares equivalent to
1.5 per cent of the Company’s total share capital.
Auditors’
report
Auditors’ report | 59
PricewaterhouseCoopers AS, Kanalsletta 8, Postboks 8017, NO-4068 Stavanger
T: 02316, org. no.: 987 009 713 MVA, www.pwc.no
Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap
To the General Meeting of North Energy ASA
Independent Auditor’s Report
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of North Energy ASA, which comprise:
• the financial statements of the parent company North Energy ASA (the Company), which
comprise the statement of financial position as at 31 December 2022, the income statement,
statement of comprehensive income, statement of changes in equity and cash flows statement
for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies, and
• the consolidated financial statements of North Energy ASA and its subsidiaries (the Group),
which comprise the statement of financial position as at 31 December 2022, the income
statement, statement of comprehensive income, statement of changes in equity and cash
flows statement for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies.
In our opinion
• the financial statements comply with applicable statutory requirements,
• the financial statements give a true and fair view of the financial position of the Company as at
31 December 2022, and its financial performance and its cash flows for the year then ended in
accordance with International Financial Reporting Standards as adopted by the EU, and
• the consolidated financial statements give a true and fair view of the financial position of the
Group as at 31 December 2022, and its financial performance and its cash flows for the year
then ended in accordance with International Financial Reporting Standards as adopted by the
EU.
Our opinion is consistent with our additional report to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company and the
Group as required by relevant laws and regulations in Norway and the International Ethics Standards
Board for Accountants’ International Code of Ethics for Professional Accountants (including
International Independence Standards) (IESBA Code), and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit
Regulation (537/2014) Article 5.1 have been provided.
2 / 4
We have been the auditor of the Company for 16 years from the election by the general meeting of the
shareholders on 1 November 2007 for the accounting year 2007 with a renewed election on 25 April
2014.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
We have determined that there are no key audit matters to communicate in our report.
Other Information
The Board of Directors and the Managing Director (management) are responsible for the information
in the Board of Directors’ report and the other information accompanying the financial statements. The
other information comprises information in the annual report, but does not include the financial
statements and our auditor’s report thereon. Our opinion on the financial statements does not cover
the information in the Board of Directors’ report nor the other information accompanying the financial
statements.
In connection with our audit of the financial statements, our responsibility is to read the Board of
Directors’ report and the other information accompanying the financial statements. The purpose is to
consider if there is material inconsistency between the Board of Directors’ report and the other
information accompanying the financial statements and the financial statements or our knowledge
obtained in the audit, or whether the Board of Directors’ report and the other information
accompanying the financial statements otherwise appear to be materially misstated. We are required
to report if there is a material misstatement in the Board of Directors’ report or the other information
accompanying the financial statements. We have nothing to report in this regard.
Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report
• is consistent with the financial statements and
• contains the information required by applicable statutory requirements.
Our opinion on the Board of Director’s report applies correspondingly to the statements on Corporate
Governance and Corporate Social Responsibility.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in
accordance with International Financial Reporting Standards as adopted by the EU, and for such
internal control as management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and
the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to
liquidate the Group or to cease operations, or has no realistic alternative but to do so.
60 | Auditors’ report
3 / 4
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
• identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error. We design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's and the Group's internal control.
• evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
• conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company's and the
Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company and the Group to cease to
continue as a going concern.
• evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves a true and fair view.
• obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
4 / 4
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
Report on Compliance with Requirement on European Single Electronic Format (ESEF)
Opinion
As part of the audit of the financial statements of North Energy ASA, we have performed an assurance
engagement to obtain reasonable assurance about whether the financial statements included in the
annual report, with the file name NORTH-2022-12-31-en have been prepared, in all material respects,
in compliance with the requirements of the Commission Delegated Regulation (EU) 2019/815 on the
European Single Electronic Format (ESEF Regulation) and regulation pursuant to Section 5-5 of the
Norwegian Securities Trading Act, which includes requirements related to the preparation of the
annual report in XHTML format, and iXBRL tagging of the consolidated financial statements.
In our opinion, the financial statements, included in the annual report, have been prepared, in all
material respects, in compliance with the ESEF regulation.
Management’s Responsibilities
Management is responsible for the preparation of the annual report in compliance with the ESEF
regulation. This responsibility comprises an adequate process and such internal control as
management determines is necessary.
Auditor’s Responsibilities
For a description of the auditor’s responsibilities when performing an assurance engagement of the
ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger
Stavanger, 30 March 2023
PricewaterhouseCoopers AS
Tom Notland
State Authorised Public Accountant
North Energy ASA will present financial statements on the
following dates in 2023:
Q1 2023 interim financial report: 10 May 2023
Half-yearly 2023 interim financial report: 24 August 2023
Q3 2023 interim financial report: 8 November 2023
All dates are subject to change.
The annual General Meeting is planned to be held on 1
June 2023
North Energy ASA- Financial Calendar for 2023
North Energy ASA
Address: Tjuvholmen allé 19, 0252 OSLO
E-mail: post@northenergy.no
Phone: +47 22 01 79 50
Legal Org. Number: NO 891 797 702 MVA