NORCEN SEES IMPROVEMENT IN 1987 EARNINGS <Norcen Energy Resources Ltd>, 41 pct owned by <Hees International Corp>, said earnings and cash flow will improve in 1987, even if oil and gas prices remain at 1986 levels. The improvement will result from production increases, lower taxes and royalties, reduced financing costs and from operating efficiencies and downsizing put into place during 1986, the company said in the annual report. Norcen previously reported 1986 earnings, excluding a 20.1 mln dlr writeoff, declined by 58 pct to 50.0 mln dlrs from 119.7 mln dlrs in in 1985. Norcen's 1986 cash flow fell 10 pct to 204.9 mln dlrs from 228.9 mln dlrs in the prior year. It said the sharp decline in oil prices during 1986 was the most significant factor for Norcen's reduced performance. "While financial results are far from the previous year's record levels, it is clear that Norcen has withstood declining prices and remains financially and operationally strong," Norcen said. It did not give a specific 1987 profit forecast. The company said it is well positioned to capitalize on profitable opportunities in its core business areas, and will continue to invest to increase revenue and asset values.