Det norske oljeselskap ASA reached several milestones in the second quarter. The company finalised the Jette development project and the oil production commenced on 19 May. In addition, Ivar Aasen was unanimously approved by the Storting, the Norwegian parliament, and the project is progressing well.
Production start on Jette signifies an important milestone for Det norske on its way to becoming a fully-fledged E&P company with exploration, development and production. Production on Jette has been satisfactory. In total, Det norske produced an average of 5,613 oil equivalents per day in the second quarter, of which 64 percent came from Jette. Atla represents 26 percent of the production in the second quarter.
Aasen on track
The plan for development and operation of the Ivar Aasen field was approved by the Storting on 21 May. The project is progressing according to plan. All major contracts are now in place. The goal is to come on stream in the fourth quarter of 2016, yielding a production of approximately 16,000 barrels per day to Det norske. The production is planned to increase to 23,000 barrels net to Det norske in 2019. Det norske holds a 35 percent ownership interest in the licence.
In May, the Storting also approved the plan for development and operation of the Gina Krog field. Det norske has a 3.3 interest in the field, which is planned to start producing in 2017.
The Johan Sverdrup field is the company’s largest asset. During the fourth quarter of 2013, the partners will reach a decision on the concept for one of the largest developments ever on the Norwegian shelf. In the second quarter, two important appraisal wells were drilled in the western part of the field. The well 16/2-17S (”Fault Margin”) confirmed an 82-metre thick oil column, of which 49 metres were of very high quality. The sidetrack Cliffhanger South (well 16/2-17B) was classified as dry.
Det norske was awarded four new licences in the 22nd licensing round, two of these as operator. All licences are in the Barents Sea. Hydrocarbons were discovered in the appraisal well on the Norvarg prospect (PL 535). This well showed more sand and better properties than the discovery well, but with lower productivity than expected. The exploration well on the Darwin prospect (PL 531) was dry. Det norske holds a 10 percent ownership interest in the licence.
The company’s financial position was strengthened during the quarter by a NOK 1.9 billion bond issue. Det norske is working to replace its existing USD 500 million revolving credit facility with maturity in 2015. The goal is to double this to USD 1 billion with maturity in 2018.
The company’s revenues in the second quarter amounted to NOK 286 million, as compared to NOK 70 million in the second quarter of last year. The principal reason for this growth is the marked increase in oil production. The operating loss amounted to NOK 277 million. The company recorded a loss after tax in the amount of NOK 41 million.