Fourth quarter 2013 results

The development of the Ivar Aasen field, where the operator Det norske holds a 35 per cent ownership interest, is on schedule. The first cut of steel has been made and construction of both the jacket and the platform deck has commenced. The jacket is being built by Saipem at the yard in Arbatax in Sardinia. The platform deck is being constructed by SMOE in Singapore. Planned production start-up on the Ivar Aasen field is in the fourth quarter of 2016.

The discovery in PL 457, located due east of the Ivar Aasen field, leads to a more comprehensive development. The Ivar Aasen partnership has signed a pre-unit agreement with the partners in PL 457. The agreement will be finalised by June 2014.

The Johan Sverdrup field
In late 2013, Statoil, the pre-unit operator, presented its recommended field development concept for the first phase. The formal decision was made by the partnership on 13 February 2014. The Plan for Development and Operation (PDO) is to be presented in early 2015, in anticipation of the Norwegian Parliament’s approval during the first half-year of 2015. According to plan, start-up of oil production is expected in late 2019. The production capacity during the first phase will be between 315,000 and 380,000 barrels of oil equivalents per day. Statoil communicated gross field recoverable contingent resources between 1,800 and 2,900 million barrels oil equivalents. Preliminary estimated recovery factor is about 60 per cent. However, the ambition is to increase this towards 70 per cent.

Total investments for the first phase are estimated to be between NOK 100 and 120 billion. This estimate includes all investments in platforms, subsea installations, wells, pipelines and power from shore, also including contingencies and provisions for market adjustments. The partners are working continuously to lower the investment level for the first phase. Phase 1 has capacity to produce more than 70 per cent of the resources. Fully developed, the production capacity of the field may be in the range between 550,000 and 650,000 barrels of oil equivalents. From both a technical and an economical perspective, the anticipated life of the Johan Sverdrup field is approximately 50 years.

Exploration activities
In Q4, Det norske participated in a discovery at Askja (PL 272). Preliminary estimates indicate that the field contains between 19 and 44 million barrels of oil equivalents. Det norske has an ownership interest also in the adjacent Krafla discovery, and a joint development with Askja may generate a production of between 69 and 124 million barrels.

The drilling on Mantra in PL 551 was completed in Q4; no hydrocarbons were identified in this prospect.

In Q4, Det norske entered into an agreement with Atlantic Petroleum Norge AS concerning the sale of a 10 per cent interest in PL 659 in the Barents Sea. The licence comprises the Langlitinden prospect, where drilling commenced in January 2014. Det norske is the operator and will retain a 20 per cent interest in the licence after this transaction. As compensation, Atlantic Petroleum will carry part of Det norske’s drilling costs related to the exploration well.  

In January, Det norske was awarded six new licences in the APA 2013 round, of which two as operator.

Gro G. Haatvedt has been appointed new Senior Vice President Exploration in Det norske. She was previously the Senior Vice President for exploration on the Norwegian shelf in Statoil.

Production
Det norske’s four producing fields; Jette, Atla, Varg and Jotun, produced an average of 4,328 barrels of oil equivalents in Q4. Production from Jette accounted for 63 per cent. The average realised oil price was USD 109 (110) per barrel.

Financials
Det norske oljeselskap ASA reported NOK 254 million (117) in revenues in the fourth quarter. Exploration expenses were NOK 544 million (195), contributing to an operating loss of NOK 1,182 million as compared to an operating loss of NOK 358 million in Q4 2012. Net financial costs were NOK 106 million (14). The net loss for the period was NOK 329 million (47) after tax income of NOK 959 million (325).

The equity ratio as at end of Q4 2013 had been reduced to 30 per cent (45).

Summary of financial results and operating performance:

Find the report and presentation attached. A live webcast from the presentation will be available at our website from 08:15 (CET), www.detnor.no.

Contact:
Knut Evensen, VP Investor Relations, tel.: + 47 950 77 622.