Q1 2012 – Set for development

This article originates from the news archive of Det norske.

9. May 2012

Det norske’s Jette development, the company’s first operated development, is progressing according to schedule. The Plan for Development and Operation (PDO) of Jette has been approved, and the very first self-produced oil is expected in early 2013. The Draupne field is also making good progress.

CEO Erik Haugane asserts that this will be yet another exciting year for the company.

– We are closing in on our goal of becoming a fully fledged oil company on the Norwegian shelf. Over the course of this year, we will transform from being an exploration company, to a company with exploration, development and an operational organization.

In February, the Norwegian authorities approved the PDO for the Jette field. Jette represents the company’s first field development as operator. Jette contains about 14 million barrels of oil equivalents (P50 reserves). Initial production from Jette will be about 14,000 barrels a day. Production start-up will take place within one year. Drilling of production wells has already commenced.

oppankring Jette 3

Picture: Transocean Barents anchoring at the Jette field May 4th.

Important agreements

In the beginning of March, the partnership in Draupne entered into an agreement with the partners in the Edvard Grieg field regarding a coordinated development. The Draupne field will have a fixed jacket platform with first stage separation. The well stream will be sent from the Draupne platform to Edvard Grieg for final processing and export to markets.

Det norske aims to submit the PDO of Draupne in the fourth quarter this year. Production start-up on Draupne is expected in fourth quarter 2016. Draupne has secured oil processing capacity for 50,000 barrels on Edvard Grieg at production start-up. This will gradually increase to 75,000 barrels from October 2018. The field contains estimated P50 reserves of 143 million barrels of oil equivalents.

In March, the owners of the two licenses comprising the Johan Sverdrup field, entered into a pre-unit agreement for the work leading up to a PDO. Gross resources in the Johan Sverdrup field, in production license 265, is estimated at 900 – 1,500 million barrels of oil equivalents. Det norske has a 20 percent share in this license.

The 2011 APA licensing round (Awards in Predefined Areas) was announced in January. Det norske was awarded nine licenses, three of them as operator, including one operatorship in the Barents Sea.

Financially

Det norske holds a strong financial position. In the first quarter, Det norske signed a USD 500 million corporate credit facility. Det norske’s equity ratio by the end of the first quarter was 43 percent. The company produced 123,072 barrels of oil equivalents, achieving an average oil price of 120.5 USD per barrel. Cash flow from production was NOK 50.2 million. In the first quarter, the company had a net loss of NOK 103.7 million. Exploration expenses amounted to NOK 594.6 million. At the close of the period, the company’s net cash position amounted to approximately NOK 900 million.

See a webcast from the presentation here from 8.15.

Find the Q2 2012 presentation here

Q1 2012 Report here