Norway: Outstanding Quarter for Det Norske, CEO Says
As a partner in the giant Aldous Major oil discovery, Det norske oljeselskap ASA has created significant values both for its shareholders and for the Norwegian society at large. This discovery transforms the company and makes it a more significant player on the Norwegian Continental Shelf.
In the third quarter, Det norske has submitted two applications for development and operations (PDO), one as operator for the Jette development and one as partner in the Atla development.
Erik Haugane, CEO of Det norske, says the development has been extraordinary.
‘I have used words such as grand slam and outstanding. With a tripling of the company’s resource base over six months, it is difficult not to use superlatives. We have a 20 percent interest in what has proved to be one of the biggest discoveries ever on the Norwegian Continental Shelf, and we still see potential upside in this area. Along with the PDO for Jetta, this lays the foundation we need to become a significant and fully-fledged Norwegian oil company.
I am also pleased on behalf of our many shareholders, that Det norske´s market capitalisation has passed the ten billion mark (NOK)’
Det norske holds a 20 percent share in the Aldous Major South discovery. This is one of the biggest discoveries on the Norwegian shelf, and the world´s largest offshore discovery so far this year. The operator´s resource estimate is in the range of 900 to 1,500 million barrels of oil equivalents. Det norske´s share is in the range of 180 to 300 million barrels. With today´s oil price, the company´s interest represents a gross value of about NOK 146 billion. Additionally, there is still potential upside both in PL 265 and in the neighbouring PL 501.
During the quarter, Det norske also participated in a gas discovery on Norvarg in the Barents Sea, operated by Total. Det norske has a 20 percent interest in the licence. In July, a small gas discovery was made on the Skalle prospect, also in the Barents Sea, where Det norske holds10 percent.
Det norske also made a smaller oil discovery on Skaugumsåsen in PL 482. Det norske is operator for the licence with a 65 percent interest.
Jette on schedule
Det norske submitted a plan for development and operation (PDO) of Jette in September (PL 027D, 169C and 504). This will be the company´s first field development as operator. Det norske has a 63.3 percent interest in Jette. Investments in Jette development are estimated at gross NOK 2.5 billion. First oil is expected in early 2013, adding 9,000 barrels net to Det norske´s daily production.
Total submitted a plan for development and operation of Atla in July. According to schedule, production from Atla will come on-stream towards the end of 2012, adding 1,000 barrels of oil equivalents net to Det norske
Strong financial situation
In the third quarter, the company carried out a successful private placement of NOK 488.9 million. A total of 11.1 million shares were issued at a price of NOK 44 per share.
Det norske produced 120.438 barrels of oil equivalents in the third quarter. The oil price achieved was 115 dollars per barrel. The cash flow from production this quarter was NOK 36 million. Third quarter net income was negative in the amount of NOK 40 million. Exploration costs in the third quarter were NOK 120 million. The company’s net cash position at the end of the third quarter was in excess of NOK 1.1 billion, and liquidity in excess of NOK 1.7 billion.
Source:Det Norske , November 2, 2011