Norway: Det Norske Announces High Operating Revenues in 4Q 2010

 

Det norske oljeselskap ASA is working actively on three potential development projects. In the fourth quarter, Det norske recorded high operating revenues.

In 2010, Det norske oljeselskap ASA confirmed its position as one of the most active exploration companies on the Norwegian continental shelf and the company will continue its extensive exploration activity in 2011.

Development projects

In the first quarter 2011, the company will decide on the optimum development solution for the Draupne discovery. Draupne stands out as a very good project. Estimated volumes have been lifted from between 110 million to 150 million boe, to between 112 to 192 million boe, with a most likely volume of 140 million boe.

Det norske studied alternative development options for Draupne (PL 001B). Both a stand alone development of Draupne and a coordinated development with the Luno discovery (PL 338) are being considered. The company aims to present its recommended development solution to the licence partners by the end of first quarter of 2011.

The illustration at the left shows a possible development og the discoveries at Draupne, Hanz and West Cable. Press for bigger version.

The Frøy (PL 364) partnership decided in 2010 to study whether the combined use of gas and water injection can increase recoverable volumes compared with water injection alone. This work must be completed before the partnership decides on whether to proceed to the next level.

The Storklakken oil discovery in PL460, which is owned 100 percent by Det norske, is being considered for development together with Frøy.

In the course of the fourth quarter, Det norske matured the Jetta discovery towards a development decision. The project appears to be commercially viable provided that agreement is reached with the Jotun Unit concerning production tariffs. Production from Jetta can start in 2013, at the earliest.

Exploration

Results in the fourth quarter were disappointing. Both Stirby (PL 341) and Dalsnuten (PL 392) were dry. We found indications of gas in Stirby, but the volumes were non-commercial. Det norske was operator for Stirby, and it was the company’s first high pressure high temperature (HTHP) well. This was a milestone for the company and the operations were completed without any serious HSE incidents. Det norske plans to participate in about ten exploration wells in 2011.

In the 21st licensing round, De norske applied for areas that contain major prospects both in the Barents Sea and The Norwegian Sea. The results of the licence awards will be announced in the course of the spring 2011.

In the awards in pre-defined areas (APA) 2010, the government offered 39 companies interests in 50 licences. Det norske has been offered an interest in eight licences, of which three as operator.

High revenues and strong financial position

Operating revenues for the period amounted to MNOK 99.5 (73.7), which is historically high. The 45 percent increase was a result of increased production and higher oil prices. The company had an operating loss of MNOK 676.2 (MNOK 626.2). The loss can largely be attributed to recognised exploration expenses of MNOK 570.6 (387.3), which included expenses relating to Stirby and Dalsnuten in the third quarter. The loss for the period was MNOK 312.1 (MNOK 379.3).

The company is financially strong with an equity ratio of 41 percent and has a good liquidity position. In January 2011, Det norske issued a bond of MNOK 600. The bond has a five-year maturity and is unsecured.

During the fourth quarter, Det norske produced 187.653 (179,492) barrels of oil equivalents, corresponding to 2,040 (1,951) barrels a day. On average, the oil was sold for a price of USD 87.1 (73.4) per barrel.

In mid-November, Det norske moved into the company’s new head office in Føniksbygget at Torvet in Trondheim.

About Det norske:

Det norske is the second-largest operating company on the Norwegian Continental Shelf both considering number of operatorships, exploration- and drilling activity. The aggressive exploration program is the largest an independent Norwegian company has ever conducted on the NCS. Det norske runs its activities in a safe and responsible manner in close cooperation with the authorities.

Det norske will in 2011 participate in over 10 drilling operations as partner or as operator. Det norske currently employs a staff of around 200. The company`s registered office is located in Trondheim. The company also has offices in Oslo, Harstad, and Stavanger. Det norske is listed on the Oslo Stock Exchange (DETNOR).

Source:Det Norske, February  16, 2011;

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