Det norske announced its 2Q 2014 financial results on 17 July. Among other financial highlights and activity, the company discussed its agreement to acquire Marathon Oil Norge for US$2.1 billion. Announced 2 June 2014, the transaction is expected to close 4Q 2014, subject to regulatory approvals.
Marathon Oil Norge’s portfolio is estimated at approximately 80MMboe. Combined 2013 production for the two companies amounted to approximately 84,000bo/d, which, Det norske says, makes it one of the largest listed independent exploration and production companies in Europe in terms of output.
Following the acquisition, the company will have 202MMboe in proven and probable reserves (YE2013) and contingent resources amounting to 101MMboe, excluding the resources from the Johan Sverdrup field.
The acquisition of Marathon Oil Norge will increase Det norske’s financial robustness and its ability to absorb the impact of any changes in future capital expenditure. This will also improve the company’s credit profile and reduce the cost of capital.
Johan Sverdrup
The Johan Sverdrup licensees have entered into negotiations regarding a unitization agreement, and the Norwegian legislature, Storting, will review the company’s plan for development and operation (PDO) during its spring session of 2015. Aker Solutions has been awarded the main contract for the pre-engineering of the platform unit, and a letter of intent for delivery of two of the planned steel jackets for the Johan Sverdrup development has been signed with Kværner. The jacket for the riser platform is due for delivery in the summer 2017, and the jacket of the drilling platform will be delivered in the spring of 2018. Det norske says the first phase of Johan Sverdrup is estimated to have a production capacity of between 315,000 and 380,000 boe/d.
Ivar Aasen
The key engineering and construction activities in the Ivar Aasen project are on schedule, with production start-up expected 4Q 2016. The project, located west of Johan Sverdrup in the North Sea, marks Det norske’s first major project as the operator. In June, Det norske signed a unitization agreement for the development of the Ivar Aasen field on the Utsira High in the North Sea, securing the company a 4.78% stake. Reserves, previously estimated by Det norske to be about 150MMboe, have increased by about 35% following the unitization and the processing of new ocean-bed seismic. Total investments for the Ivar Aasen development are estimated at US$44 million (NOK 27.4 billion, nominal value), which remain unchanged when compared to the PDO.
Exploration
During Q2, the company’s costs related to exploration amounted to approximately US$49 million (NOK 304 million), of which US$19.8 million (NOK 123 million) have been entered as exploration expenses.
Read more:
Marathon to keep North Sea assest
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