Det norske oljeselskap, which plans to merge with BP Norway later this month to become Aker BP, raised its output guidance for 2016 based on stronger-than-expected production from the Alvheim area.
Det norske's production, excluding effects of the planned BP Norway merger, is expected to average between 62,000 barrels of oil equivalent per day (Mboe/d) and 65 Mboe/d in 2016, up from a previous guidance ranging between 55 Mboe/d and 60 Mboe/d.
CEO Karl Johnny Hersvik told a conference on Sept. 14 that "our goal is simple, and that is to sanction new projects with a breakeven below $35 per barrel, all in. We have proven that we are able to cut cost and put productivity back in the front seat."
"We still see that there is a possibility to reduce cost by 20% in some of our projects. But we need to have the right priorities. We believe there is a possibility to reduce engineering per platform by 50% and cut total execution time by 25%," he added.
Hersvik said the company's goal is to keep growing through M&A and organic portfolio development. High-value assets and operated assets where productivity can be increased are being targeted, he added.
Hersvik said the company is more interested in liquid exposure than gas exposure, and said that the current window of opportunity contains good strategic possibilities on the Norwegian Continental Shelf.
Det norske's production cost for 2016, excluding effect of the merger, is expected to be about $7/boe, which is lowered from a previous guidance of between $8/boe and $9/boe.
No changes have been made to the company's guidance for 2016 capex as of July 14.
Det norske's shares traded 1% higher for Sept. 14 at 0745 GMT while the Oslo benchmark index was down 0.3%.
Recommended Reading
CERAWeek: Tecpetrol CEO Touts Argentina Conventional, Unconventional Potential
2024-03-28 - Tecpetrol CEO Ricardo Markous touted Argentina’s conventional and unconventional potential saying the country’s oil production would nearly double by 2030 while LNG exports would likely evolve over three phases.
DUG GAS+: Chesapeake in Drill-but-don’t-turn-on Mode
2024-03-28 - COO Josh Viets said Chesapeake is cutting costs and ready to take advantage once gas prices rebound.
CERAWeek: Trinidad Energy Minister on LNG Restructuring, Venezuelan Gas Supply
2024-03-28 - Stuart Young, Trinidad and Tobago’s Minister of Energy, discussed with Hart Energy at CERAWeek by S&P Global, the restructuring of Atlantic LNG, the geopolitical noise around inking deals with U.S.-sanctioned Venezuela and plans to source gas from Venezuela and Suriname.
Exclusive: Chevron Balancing Low Carbon Intensity, Global Oil, Gas Needs
2024-03-28 - Colin Parfitt, president of midstream at Chevron, discusses how the company continues to grow its traditional oil and gas business while focusing on growing its new energies production, in this Hart Energy Exclusive interview.
Baltimore Port Closure Could Dent US Coal Export Volumes, EIA Says
2024-03-28 - Baltimore handled exports of 28 million short tons last year, making up 28% of total U.S. coal exports.