Norwegian oil and gas producer Det norske oljeselskap reported Monday that it has increased reserves and is maintaining "very good" production levels amid low oil prices and challenging macroeconomic conditions.
In a statement coinciding with its capital markets day, Det norske confirmed that it has begun a comprehensive improvement program to increases its competitive strength and is positioning itself for additional growth during the coming years. The firm said that one of the goals of its improvement program is to enable the sanctioning of standalone developments, even with oil prices below $40 per barrel.
In 2016, Det norske plans to invest between $925 and $975 million, with exploration spending expected to be in the $160-to-$170 million range. The firm said that its ambition is to become a leading player within exploration on the Norwegian Continental Shelf, setting itself a target of discovering 150 million barrels of oil equivalent by 2020. In 2016, it will work to further clarify the resource potential in priority areas, such as the Krafla/Askja area, the Tampen area and the Loppa High, as well as the area adjacent to the Ivar Aasen field.
Seven exploration wells have been planned for 2016, of which Rovarkula on the PL 626 license is operated by Det norske. The Uptonia exploration well on the PL554 B&C license is currently being drilled by Total.
Production costs in 2016 are estimated to be between $8 and $9 per barrel of oil equivalent. Det norske reiterated its production guidance for 2016 at between 55,000 and 60,000 barrels of oil equivalent per day.
Commenting in a company statement, DNO CEO Karl Johnny Hersvik said:
"Det norske has reported strong growth over its ten years of existence. On the average, we have increased reserves by as much as 50 million barrels of oil every year since 2006. At year-end 2015, certified P50 reserves amounted to 498 million barrels of oil equivalent.
"Det norske shall utilize its ability to challenge, think differently and adapt to reduce exploration, development and operating costs to a minimum, including reduced drilling costs. This is the competitive advantage we will use to continue growing on the Norwegian shelf."
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