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A set of high-profile hedge funds is expected to turn the fortunes of a battered North Sea oil and gas company, which has built large positions as energy prices rise.
Taconic Capital, CQS and Kite Lake Capital are among the funds with positions in the Norwegian Energy Company (Noreco), Denmark’s second-largest oil and gas producer, whose shares have fallen more than 99 percent since the major pre-financial crisis. .
Taconic and Kite Lake own more than 50 percent of the company. The CQS, one of London’s largest funds, announced a share of less than 13 per cent in March, with a number of positions personally located at the fund, which is run by billionaire founder Michael Hintze.
Caius Capital and Astaris Capital, the hedge funds created last year by Martin Beck, the former founder of Sothic Capital, also hold positions, and York Capital has also been a shareholder.
Noreco has only capitalized the Norwegian krone (£ 270 million) capitalized at £ 3.14bn, which is unusual for the high concentration of hedge funds in the shareholder register.
Last week, the funds were further tightened for the company, as Peter Coleman of Taconic and Jan Lernout of Kite Lake voted on the board at the company’s annual meeting.
Noreco was once Norway’s second-largest oil and gas company, but the financial crisis was caused by a drop in oil prices. The company also suffered in 2009 after discovering cracks in one of its oil rigs. In 2018, he lost a $ 470 million lawsuit he filed against 20 insurance companies that he hoped would pay for it.
But that same year Taconic, Kite Lake, CQS and York helped Norecok buy Shell’s Danish upstream assets, making it Denmark’s second-largest oil and gas producer.
Hedging funds are now laying the hope that the company expects production to nearly double in the second half of 2023, redeveloping one of the areas in which it participated in the acquisition of assets from Shell. .
One of the funds said the decision to take seats in Noreco’s management was designed to help management increase gas production.
The price of Brent crude fell to $ 66 at the end of 2019, but fell below $ 20 last April as the coronavirus pandemic forced the economy to shut down. However, prices have risen to $ 70 this week as they have been the highest in two months as traders have pushed for higher demand as the economy opens up and international travel is slowly recovering again.
The funds are also expected to benefit from M&A in the energy sector, which includes Chrysaor reverse purchase Premier Oil at the end of last year and Waldorf Production purchase North Sea assets in March by Cairn Energy.
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