Annual Report 2017
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ANNUAL REPORT 2017 Siorapaluk ! ! Qaanaaq Moriusaq ! ! Thule Air Base Savissivik ! Kullorsuaq ! Nuussuaq ! Nutaarmiut ! Tasiusaq ! Innaarsuit ! Naajaat Tussaaq ! ! Aappilattoq ! ! Upernavik Kangersuatsiaq ! Upernavik Kujalleq ! Nuugaatsiaq ! Illorsuit ! Ukkusissat ! Nerlerit Inaat ! Niaqornat ! Qaarsut Saattut Itterajivit!Illoqqortoormiut ! ! ! ! !Uunarteq Uummannaq Ikerasak ! Saqqaq ! !Qeqertaq Kangerluk ! ! Oqaatsut Qeqertarsuaq ! ! Ilimanaq Kitsissuarsuit ! ! Ilulissat Akunnaaq ! ! ! Ikamiut Aasiaat ! Qasigiannguit !Kangaatsiaq Niaqornaarsuk Ikerasaarsuk ! ! ! Iginniarfik Attu ! ! Sarfannguit ! Kangerlussuaq Sisimiut ! Itilleq ! Kangaamiut ! ! Sermiligaaq Tiniteqilaaq Kuummiut! Maniitsoq ! ! Napasoq ! Kulusuk Isortoq ! ! ! Atammik Tasiilaq ! Kapisillit ! ! Nuuk Qeqertarsuatsiaat ! ! Paamiut Arsuk Ivittuut ! ! Qassiarsuk Narsarsuaq ! ! Igaliku ! Qassimiut ! ! ! Narsaq Saarloq! Ammassivik ! ! 0 250 500 ! Alluitsup Paa Tasiusaq ! ! !Aappilattoq Narsaq Kujalleq ! Kilometer Contents Financial highlights and key figures 3 Guidelines and policies 12 Letter from the Board of Directors 4 Management’s statement 14 Management’s review 5 Independent auditors’ report 15 Expectations to 2018 6 Accounting Policies 16 Greenland Sea 7 Income statement 19 Jameson Land 8 Balance sheet 20 NUNAOIL’s industrial Ph.D. project 9 Cash flow statement 21 Risk management 10 Notes 22 Corporate governance 11 Company information THE COMPANY BOARD OF DIRECTORS NUNAOIL A/S Stine Bosse, Chairman Tuapannguit 38 Søren Lennert Mortensen, Vice-chairman P.O. Box 579 Peter Helmer Steen GL-3900 Nuuk Telephone: +299 32 87 03 BOARD OF MANAGEMENT Website: www.nunaoil.gl Signe Ulfeldt Hede Email: [email protected] Follow NUNAOIL on LinkedIn AUDITORS Reg. no.: 68.116 Grønlands Revisionskontor A/S, statsautoriserede revisorer Founded: 23 January 1985 Registered office: Kommuneqarfik Sermersooq ANNUAL GENERAL MEETING Financial year: 1 January - 31 December Annual general meeting held 3 May 2018 Cover: Map of Greenland including licenses 2017. The pictures from the Annual Report are from Northeast Greenland during the summer of 2017. EDITORS: NUNAOIL A/S | LAYOUT & PRODUCTION: ICICERO, NUUK | PUBLISHED: MAY 2018 2 Annual report 2017 · NUNAOIL A/S Financial highlights and key figures 2017 2016 2015 2014 2013 DKK 1,000 Net profit for the year Revenue 0 185 755 1,612 3,418 Gross profit -1,148 ‑1,006 ‑626 ‑1,543 ‑129 Profit before net financials -3,141 -5,772 -6,909 -8,235 -8,455 Financial income and expenses 109 19 330 1,298 ‑329 Net profit for the year -3,032 ‑5,753 ‑6,579 ‑6,733 ‑8,784 Balance Sheet Balance Sheet 36,829 42,603 45,800 50,549 55,336 Total equity 14,129 17,161 22,913 29,492 36,225 Cashflow statement Operational activities -7,768 -2,340 -4,529 -3,398 -2,407 Investment activities 4,713 2,815 0 ‑13 ‑177 Financing activities 0 ‑568 0 0 0 Total cashflow -3,055 ‑93 -4,529 -3,411 -2,584 Employees Average number (full-time) 4 5 7 7 8 Financial ratio (in %) * Equity ratio 38,4 40,3 50,0 58,3 65,5 Return on equity (ROE) -19,4 -28,7 -25,1 -20,5 -21,6 * Financial ratios are calculated in compliance with the ”Recommendations and Financial Ratios 2015” issued by the Danish Society of Finance Ana- lysts. For definitions on key ratios, please see section on accounting policies on page 16. STATEMENT TO INATSISARTUT This annual report meets the legal requirements for submission of accounts in Greenland, and it is furthermore the statutory annual report to Inatsisartut according to Inatsisartut Act no. 15. Dated December 7th 2009 regarding NUNAOIL A/S. The Management Report, furthermore, is worked out based on recommendations on good company governance as stated by Naalakkersuisut. The annual report is available in Greenlandic, Danish and English. In case of doubt the Danish version shall serve as the ap- plicable copy. Annual report 2017 · Financial highlights and key figures · NUNAOIL A/S 3 Letter from the Board of Directors During the last 18 months NUNAOIL’s who will implement NUNAOIL’s future The overview of the potential oil and board of directors has been working work together with the board of direc- gas resources and associated risks, very detailed with NUNAOIL’s strategy tors. A considerable smaller NUNAOIL which hereby will be established, will focusing on challenges and possibili- will be able to consolidate and main- be of great value for the future strate- ties of an industry which has changed tain the data and knowledge, which gic planning and for marketing of the drastically during the last couple of is in the company today. Doing that, Greenlandic oil and gas potential to- years due to a worldwide low oil price NUNAOIL will be ready to use it when- wards the global petroleum industry. of which the result has been a slow- ever it is needed. ing down of the exploration activity in Furthermore, NUNAOIL has taken the Greenland. The new strategy means In 2017, the board of directors was initiative to start a resource assess- that NUNAOIL will still serve as a reduced from five to three due to a ment project which will be carried out framework for all commercial hydro- change in the NUNAOIL-law. together with the Ministry of Mineral carbon activity in Greenland. In addi- Resources and international partners. tion to this, NUNAOIL will make sure The board of directors will towards The purpose of the project is to com- that all knowledge of the hydrocarbon the future make sure that the know- pile all the geological models which potential in Greenland, which the com- ledge which already is created within have been used by the industry doing pany has been able to build up during the company today and through close petroleum exploration in Greenland, to the years, will be used and remain an- co-operation with the international oil establish an overview of where more chored in Greenland. companies contributes to the develop- information is needed and to point to- ment of a petroleum industry in Green- wards initiatives which can minimize The continued decrease in the number land. NUNAOIL is the only company, risks and costs. The project will be of exploration and exploitation licences which participates as a partner in all co-ordinated with the new oil and gas from seven to five (31 December 2017) exploration licences in Greenland, and strategy made by the Greenlandic au- has of course affected NUNAOIL not NUNAOIL therefore plays a key role in thorities. The time for such a project is only economically and physically but maintaining and anchoring knowledge now, where the different partners still also with respect to the number of em- about petroleum exploration in Green- are up-to-date with knowledge, re- ployees. As a result of a continued fo- land. sources and network. cus on the economy from the board of directors the office as well as the house Today, huge amounts of geological The board of directors would like to meant for the employees were sold at and geophysical data, interpretations, thank the former directors of the board the end of 2017. Furthermore, all em- maps, relinquishment reports and ex- and last but not least Hans Kristian ployees including the director of the periences from the many years of com- Olsen for a good and constructive company during the last 13 years were prehensive exploration in Greenland co-operation during the years. dismissed; except for the Ph.D. stu- are stored at NUNAOIL. All this know- dent of the company. The employees ledge represents a huge value for the were dismissed only because of aus- Greenlandic society. However, a utili- terity measures. On 1 January 2018, zation of this value is only possible if the board of directors employed a new all of the knowledge and the evalua- managing director, Signe Ulfeldt Hede, tions are summarized and qualified. 4 Annual report 2017 · Letter from the Board of Directors · NUNAOIL A/S Management’s review The number of exploration and ex- with a licence share of 12.5% within funds, which have accumulated over ploitation licences in 2017 has not been the Northeast Greenland licenses and the years due to the sale of seismic data this low since 2007. The year before, 6.25% within the two licenses onshore acquired by the KANUMAS group with the remaining licences offshore West Jameson Land. NUNAOIL’s financial risk NUNAOIL as an operator. The data ac- Greenland were relinquished, and in is limited due to the fact being a carried quisition took place from 1991 to 1995. 2017 exploration activity was only car- partner during the exploration phase. The KANUMAS funds shall be used for ried out within the five licences off- hydrocarbon related exploration pro- shore Northeast Greenland and the NUNAOIL does not expect to profit on jects. This specific resource assessment two licences onshore Jameson Land in the exploration before a commercial project is expected to contribute to the East Greenland. The exploration work discovery is put into production. How- new Greenlandic oil and gas strategy within these licences has worked out ever, the amount of geological and 2019-2023. as planned. Since the award of the li- geophysical data and knowledge with- cences a huge amount of data has in NUNAOIL represents a significant been acquired. In 2017, the focus for value, not only for NUNAOIL but al- the partnerships has been to evaluate so for Greenland. Therefore, NUNAOIL the petroleum potential, risks and pos- continued the work on getting a com- sibilities in order to make a qualified prehensive resource assessment pro- drill-or-drop decision before the end of ject up and running together with the the first sub-period. NUNAOIL partici- Ministry of Mineral Resources. The pro- pates as a carried (non-paying) partner ject will be financed by the KANUMAS Annual report 2017 · Management’s review · NUNAOIL A/S 5 Expectations to 2018 After 10 years of hectic exploration ac- ploration drilling campaigns have been During the last years worldwide explo- tivity offshore West Greenland and an carried out as well.