Norse Energy 2Q13: Concerned About Remaining ‘a Going Concern’

MDN told you a few days ago about the sad state of affairs at Norse Energy (see Norse Can’t Dump NY Leases at Auction, Creditors Get Ready to Sue). The company released their second quarter update today (full copy embedded below). The update is based  on the assumption the company will remain “a going concern.” They state that if they can’t sell their 130,000 acres of New York leases at a decent price, they’ll have to turn the lights off and walk away. The company is currently under bankruptcy protection and has been ordered to sell their last remaining asset–the leases.

One item from the 2Q13 update that caught our attention is that a group of approximately 60 landowners with a collective 6,000 acres are suing Norse to end their leases. Norse had invoked force majeure on the leases–a legal maneuver that states, roughly, “due to a circumstance beyond our control we’re extending the original lease term.” Of course the unforeseen circumstance is the now 5+ year moratorium on drilling in New York. If Norse starts losing already-signed leases left and right, they’ll have no assets left to sell at auction, so they are vigorously fighting the action by the landowners…

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