A group of high-profile hedge funds are hoping to recoup assets in a broken oil and gas pipeline in the North Sea where they have established the majority position on rising energy prices.
Taconic Capital, CQS and Kite Lake Capital together with the fund own the positions of Norwegian Energy Company (Noreco), the second largest producer of oil and gas in Denmark, with shares falling by more than 99 percentage from the long pre-financial crisis.
Taconic and Kite Lake among them own more than 50 percent of the company. CQS, one of London’s largest funds, in March unveiled a stake of just under 13 per cent, with some positions held in the fund personally run by billionaire founder Michael Hintze.
Caius Capital and Astaris Capital, a hedge fund launched last year by Martin Beck, former co-founder of Sothic Capital, also hold positions, while York Capital is also a shareholder.
Noreco has a working capital of just 3.14bn Norwegian krone (£ 270m), and it is not uncommon for such a high concentration of hedge funds to be on the shareholder register.
Last week, the fund further tightened their hold on the company, as Peter Coleman of Taconic and Jan Lernout of Kite Lake voted on the board at the company’s annual meeting.
Noreco is Norway’s second -largest oil and gas company by production, but was hit by the collapse in oil prices during the financial crisis. The company also suffered after cracks were found in one of its oil platforms in 2009. In 2018, it lost a court case worth $ 470m brought to 20 insurance companies they hoped to pay. the cracks.
But later that year Taconic, Kite Lake, CQS and York helped Noreco buy Shell’s upstream assets, making it the second -largest producer of oil and gas in Denmark.
Hedge funds are now setting their hopes on what the company predicts will almost double production in the second half of 2023, which has helped growth also in one of the fields taken in part as a share. to purchase assets from Shell.
The move to sit on Noreco’s board seats is designed to support management of increasing gas production, as one of the funds.
Brent crude oil prices dropped from $ 66 at the end of 2019 but fell below $ 20 in April as the coronavirus pandemic forced economies to lockdown. However, prices also rebounded to hit $ 70 this week, the highest in two months, as traders bet on higher demand as economies open and slow travel continues. international.
The funds also hope they can benefit from M&A in the energy sector, which includes Chrysaor’s retrieval of Premier Oil late last year and Waldorf Production’s Conversions of North Sea assets from Cairn Energy in March.