Det norske Presents Q4 2013 Results and Future Plans

Det norske oljeselskap ASA delivers a good fourth quarter with the development of the Ivar Aasen field progressing according to plan and the partners agreeing on a development concept for the Johan Sverdrup field.

The development of the Ivar Aasen field, where the operator Det norske holds a 35 per cent ownership interest, is on schedule. The first cut of steel has been made and construction of both the jacket and the platform deck has commenced. The jacket is being built by Saipem at the yard in Arbatax in Sardinia. The platform deck is being constructed by SMOE in Singapore. Planned production start-up on the Ivar Aasen field is in the fourth quarter of 2016.

The discovery in PL 457, located due east of the Ivar Aasen field, leads to a more comprehensive development. The Ivar Aasen partnership has signed a pre-unit agreement with the partners in PL 457. The agreement will be finalised by June 2014.

Formal decision about Johan Sverdrup field was made by the partnership on 13 February 2014. The Plan for Development and Operation (PDO) is to be presented in early 2015, in anticipation of the Norwegian Parliament’s approval during the first half-year of 2015. According to plan, start-up of oil production is expected in late 2019. The production capacity during the first phase will be between 315,000 and 380,000 barrels of oil equivalents per day.

In Q4, Det norske participated in a discovery at Askja (PL 272). Preliminary estimates indicate that the field contains between 19 and 44 million barrels of oil equivalents. Det norske has an ownership interest also in the adjacent Krafla discovery, and a joint development with Askja may generate a production of between 69 and 124 million barrels.

The drilling on Mantra in PL 551 was completed in Q4; no hydrocarbons were identified in this prospect.

In Q4, Det norske entered into an agreement with Atlantic Petroleum Norge AS concerning the sale of a 10 per cent interest in PL 659 in the Barents Sea. The licence comprises the Langlitinden prospect, where drilling commenced in January 2014. Det norske is the operator and will retain a 20 per cent interest in the licence after this transaction. As compensation, Atlantic Petroleum will carry part of Det norske’s drilling costs related to the exploration well.

Det norske’s four producing fields; Jette, Atla, Varg and Jotun, produced an average of 4,328 barrels of oil equivalents in Q4. Production from Jette accounted for 63 per cent. The average realised oil price was USD 109 (110) per barrel.

Det norske oljeselskap ASA reported NOK 254 million (117) in revenues in the fourth quarter. Exploration expenses were NOK 544 million (195), contributing to an operating loss of NOK 1,182 million as compared to an operating loss of NOK 358 million in Q4 2012. Net financial costs were NOK 106 million (14). The net loss for the period was NOK 329 million (47) after tax income of NOK 959 million (325).

The equity ratio as at end of Q4 2013 had been reduced to 30 per cent (45).

Press Release, February 19, 2014; Image: Det norske