OSLO, Nov 4 (Reuters) – Norwegian oil firm Det norske has cut spending this year after an impairment charge related to lower oil prices pushed it into a loss in the third quarter.
The company, controlled by billionaire Kjell Inge Roekke, forecast production costs of $6.5 per barrel of oil equivalent (boe) this year from an earlier view of $8-10. Adjusting to lower oil prices, it said it had achieved savings this year of more than $100 million, in line with guidance.
"The costs have come down while production has remained strong and we are therefore revising our full-year guidance accordingly," Chief Executive Karl Johnny Hersvik told investors on a conference call.
The exploration and production company, which is focused on its native Norwegian fields, cut capital expenditure this year to around $925 million from a previous guidance of between $950 million and $1 billion.
It projected 2015 exploration expenses at around $95 million from an earlier view of $115-125 million.
Shares in the firm rose 3.2 percent by 1035 GMT, outperforming a 2.0 percent increase in the European oil and gas index.
Det norske, which employs more than 240 people, said it was tendering for a new rig for its Alvheim field in the North Sea.
"We are taking advantage of a very favourable market and expect to be able to lock in extremely favourable rates and very flexible contract structures for the new rig," Hersvik said
The firm posted a net loss of $166 million in the third quarter against expectations for a profit of $10 million due to a non-cash impairment of $186 million related to goodwill from its acquisition of Marathon Oil's Norwegian business.
A comparison with figures a year earlier is skewed because Det norske has since acquired Marathon Oil's Norwegian business, significantly increasing its production and revenue.
(Reporting by Stine Jacobsen; Editing by Alister Doyle and Keith Weir)
Copyright 2017 Thomson Reuters. Click for Restrictions.
WHAT DO YOU THINK?
Click on the button below to add a comment.
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Most Popular Articles
From the Career Center
Jobs that may interest you