Results Q1 2011

This article originates from the news archive of Det norske.

10. May 2011

Det norske plans to submit a plan for development and operation (PDO) for the Jetta discovery this summer. On the exploration side, the company will participate in an additional eight wells in 2011.

During the first quarter, Det norske oljeselskap ASA has given priority to the development of the Draupne field and the Jetta discovery, while the development of Frøy has been temporarily postponed.Erik_Haugane_Q12011

CEO Erik Haugane says that the company is entering a new phase.

‘We will continue to engage in extensive exploration activities, but with the planned submission of a PDO for Jetta this summer, we will pass an important milestone on our way to become an oil company that is fully capable of carrying out developments and production from operated fields.’

The Jetta field is a time-critical field that depends on a subsea tie back to the Jotun field. The partnership is targeting a PDO submission this summer. Production start in early 2013 is within reach.

Det norske has entered into a dialogue with its licence partners on Draupne in order to find the best technical development solution for the field. The two alternatives being considered are a fixed production platform, alternatively a floating production unit combined with a fixed wellhead platform.

Exploration

Det norske will participate in additional eight exploration wells in 2011. The exploration wells on Dovregubben in PL 468 and Gullris in PL 522 proved to be dry. Before drilling started in the Gullris prospect, Det norske sold half its 20% interest in PL 522 (Gullris) to Centrica Resources Norge.

The company has bought a 10% interest in PL 438. The licence is located in the Barents Sea and there are plans to drill an exploration well in the Skalle prospect in the course of the summer 2011. Det norske has a 20% interest in Norvarg (PL 535), which is currently being drilled with Total as operator. Det norske has a 25% interest in the Krafla (PL035) presently being drilled by Statoil.

Finances

During the first quarter, Det norske produced 162,982 (217,807) barrels of oil equivalents, corresponding to 1,811 (2,420) barrels a day. On average, the oil was sold for a price of USD 106.1 (76.0) per barrel. Cash flows from production amounted to NOK 57 million during the first quarter.

The company reported a first quarter after tax loss of NOK 251.7 million, compared to a loss of NOK 174.3 million during the first quarter 2010. Exploration expenses amounted to NOK 609.1 million during the first quarter, compared to NOK 544.2 million during the first quarter 2010.

Det norske strengthened its financial position during the first quarter through a new unsecured bond issue of NOK 600 million. At the same time, it bought back NOK 136.9 million of outstanding convertible bonds.

Organisational changes

In order to improve the organisational efficiency of Det norske, the board of directors has decided to close down the company’s office in Stavanger. Furthermore the subsidiary Det norske oljeselskap AS will be terminated.

Key figures

MNOK= NOK million

Q1 11

Q4 10

Q3 10

Q2 10

Q1 10

2010

2009

Oil and gas production (barrels)

162,982

187,653

170,414

187,620

217,807

763,494

673,603

Oil price achieved (USD/barrel)

106.1

87.1

77.8

79.9

76.0

80.2

59.7

Cash flows from production*

57.0

58.6

43.2

49.5

55.9

207.2

110.7

Operating revenues (MNOK)

101.6

99.5

80.6

88.7

97.1

366.0

265.0

Exploration expenses (MNOK)

609.1

570.6

209.1

367.2

544.2

1,691.1

1,186.1

Operating profit/loss (MNOK)

-638.3

-676.2

-253.1

-409.3

-574.7

-1,913.4

-1,435.5

Profit/loss for the period (MNOK)

-251.7

-312.1

-80.1

-104.8

-174.3

-671.4

-520.7

Total exploration expenses (charged to income and recognised in the balance sheet)

634.3

513.2

447.0

911.6

793.9

2,665.7

1,804.3

No of licences (operatorships)

72 (30)

66 (30)

72 (35)

71 (35)

74 (37)

*     Petroleum revenues minus production costs

Production

Barrels of o.e. per day

Share in license

Q1 11

Q4 10

Q3 10

Q2 10

Q1 10

2010

2009

Varg

5%

1,121

1,322.7

1,067.4

1,185.8

1,386.1

1,239.9

690.1

Glitne

10%

318

346.7

437.1

433.6

542.9

439.5

618.9

Enoch

2%

57

60.7

61.0

85.4

113.6

80.0

125.6

Jotun Unit

7%

315

309.5

286.9

357.0

377.5

332.4

410.9

Total production

1,811

2,040

1,852

2,062

2,420

2,092

1,845

See a webcast from the presentation here.Find the financial report from the first quarter 2011 here.

The presentation of Q1 2011 can be downloaded here.

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).