Det norske oljeselskap ASA reports an increase in contingent resources in the third quarter due to the Geitungen discovery, which now constitutes part of the Johan Sverdrup discovery. The Ivar Aasen project made good progress in the quarter, and Plan for Development and Operation (PDO) will be submitted this year. In the third quarter Income Statement, Det norske recorded an impairment charge for the Jette project in the amount of NOK 477 million after taxes.
Johan Sverdrup is Det norske’s greatest asset. The Geitungen discovery in Production License (PL) 265 is substantial, with volume estimates ranging between 140 and 270 million of oil equivalents.Geitungen will constitute part of the Johan Sverdrup development. Prior to the discovery of Geitungen, volume estimates in P 265 ranged between 900 and 1,500 million barrels. Oil was recently proven in the Espevær High appraisal well. More appraisal wells are scheduled to be drilled in the Johan Sverdrup Field, in addition to an exploration well in PL 502, where Det norske holds a 22 percent interest. Det norske has a 20 percent interest in PL 265, which along with PL 501 constitutes Sverdrup.
On Jette, the company has succeeded in solving the technical challenges presented in the second quarter presentation. Two shorter horizontal wells have been drilled into the southern segment with 600 and 1,200 meters of sand screens, respectively. Volume estimates range between five and nine million barrels, 6.4 million barrels being the mean estimate (P50). Due to increased costs and reduced volumes, Det norske has recorded an impairment charge in the third quarter Income Statement amounting to NOK 1,881 million before taxes, corresponding to NOK 477 million after taxes.
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The Ivar Aasen project has made good progress during the quarter. The environmental impact assessment for Aasen was submitted in September, and the PDO will be submitted in December this year. The development cost of Aasen is estimated at NOK 24.3 billion. First oil is planned produced 1 October 2016. Tenders for the most important contracts of the development have been received in the third quarter, and the main contracts will be awarded during next year. Det norske holds a 35 percent interest in Ivar Aasen.
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Det norske reported a dry well on Ulvetanna in PL 356 in the quarter. In September, the presence of hydrocarbons on Garantiana in PL 554 was reported. It has now been decided to drill a sidetrack on Garantiana to prove up volumes. A gas discovery was made on the Salina prospect in PL 533. However, with the existing infrastructure in the Barents Sea, the discovery is not considered to be commercial. In Atla, production started in October, an addition of approximately 1,000 barrels per day to the company.
At the end of the period, Det norske’s equity ratio was 34 percent. In the third quarter Det norske produced 782 barrels of oil equivalents per day, which was sold at an average price of USD 111 per barrel. The loss for the period was NOK 589 million after taxes. Exploration expenditures for the third quarter amounted to NOK 403 million.