Q1 Presentation
Oslo, 30 April 2014 CEO Karl Johnny Hersvik CFO Alexander Krane
A company set for further growth
Highlights since the fourth quarter
Johan Sverdrup
- Concept selection announced
- Estimated resources from 1.8-2.9 bn boe
- Initial production of 315-380 kboepd
- First phase investments of NOK 100-120bn
- Geitungen appraisal completed
Ivar Aasen
- Project on time and cost
- Living quarters fabrication commenced at Apply Leirvik's yard at Stord
Exploration
- Discovery on Trell in the North Sea
- Non-commercial discovery on Langlitinden in the Barents Sea
Production
Q1 2014
Oil and gas production last 12 months
Operational updates
Jette
- Net production of 1 458 boepd in Q1 2014
- Production in the first quarter was affected as both wells were partially shut in during March for production flow testing
Varg
- Gas export from commenced 6 February
- The gas will be exported to the Armada platform and transported to the UK via the CATS pipeline
- Varg produced 500 boepd net to the Det norske in Q1 2014, up 21% from Q4 2013
Ivar Aasen
Q1 2014
Construction ongoing
Monday 31 March the fabrication start took place at Apply Leirvik's yard at Stord
- The living quarters will be built in three modules, and will be completed in 2015
- This means that the fabrications work on all the major Ivar Aasen sub-projects (living quarters, topsides and jacket) have commenced
Ivar Aasen project update
Ivar Aasen project status
- Project is on schedule and on cost for first oil in the Q4 2016
- Fabrication start-ups
- Construction of both jacket, topsides and living quarters have commenced
- Engineering ongoing
- Jacket and topsides engineering in London
| 1H 2013 |
Approval of development |
|
|
Detailed design of jacket and topside |
|
| 2H 2013 |
Start-up of construction jacket |
|
| 1H 2014 |
Start-up of construction topside |
|
|
Conclusion of unit agreement |
|
| 2H 2014 |
Start-up of construction living quarters |
|
| 1H 2015 |
Jacket lifted into place |
|
| 2H 2015 |
Mærsk starts drilling of production wells |
|
|
Installation of pipelines |
|
| 1H 2016 |
Topside to leave SMOE
yard |
|
|
Installation of topside |
|
|
Installation of living quarters |
|
| 2H 2016 |
Hook-up and commissioning |
|
|
Production start-up |
|
Johan Sverdrup
Q1 2014
Key first phase data
Resources:
- Between 1 800 and 2 900 mmboe
- Ambition to increase the recovery rate from ~60% to ~70%
Capacity:
- Production capacity in the first phase will be between 315 000 and 380 000 boepd
- More than 70% of the total resources from the first phase facilities
- Plateau production level of 550 000 650 000 boepd
Costs:
- NOK 100 120 billion for the first phase
- Includes also contingencies and provisions for market adjustments
- Includes the field centre, wells, export solutions and power supply, subsea templates and infield pipelines
Appraisal programme completed
Geitungen appraisal
- Located in PL 265, on the northern margin of the Johan Sverdrup field
- The well encountered a gross oil column of 6 metres in sandstones believed to represent the Statfjord formation
- Sidetrack about 1 km to the southwest, with objective to clarify the northern extent of the Johan Sverdrup main reservoir (Draupne)
- Sidetrack encountered a 12-metre sandstone / siltstone interval of medium good reservoir development in the Draupne formation
- Appraisal programme completed:
- 32 number of wells drilled
Milestones
FEED contract for phase 1 awarded to Aker Solutions
Decision Gate 2 passed
Phase 1 PDO submittal to the authorities and unitisation process finalised
Phase 1 PDO approval
Construction & Installation
First oil production
| Production (boepd) net to Detnor |
Q1
2014 |
Q1 2013 |
| Jette |
1,458 |
0 |
| Atla |
750 |
1,253 |
| Varg |
500 |
425 |
| Jotun Unit |
188 |
209 |
| Glitne |
0 |
53 |
Total
production per day |
2,895 |
1,929 |
| Total production in period (Kboe) |
261 |
174 |
| Cash flow from production |
Q1
2014 |
Q1 2013 |
Realised
oil price (USD/bbl)) |
107 |
112 |
| Revenues (MNOK) |
158 |
80 |
Cash
flow from production (MNOK) |
112 |
37 |
Exploration expenses
Statement of income
| Income statement (NOK mill) |
Q1
2014 |
Q1 2013 |
Q4
2013 |
| Revenues |
158 |
80 |
254 |
| Production costs |
43 |
42 |
98 |
Payroll
and payroll-related expenses |
5 |
2 |
4 |
Other
operating expenses |
13 |
19 |
9 |
| EBITDAX |
98 |
18 |
144 |
| Exploration expenses |
110 |
234 |
544 |
| EBITDA |
(12) |
(216) |
(400) |
| Depreciation |
89 |
35 |
124 |
| Impairment losses |
- |
- |
658 |
| Operating profit/loss (EBIT) |
(101) |
(251) |
(1 182) |
Net financial
items |
(60) |
(30) |
(106) |
| Profit/loss before taxes |
(161) |
(283) |
(1 288) |
| Tax income |
182 |
262 |
959 |
| Net profit/loss |
21 |
(20) |
(329) |
Statement of financial position
Assets
| (NOK mill) |
31.03.14 |
31.03.13 |
31.12.13 |
Equity and Liabilities
(NOK mill) |
31.03.14 |
31.13.13 |
31.12.13 |
Intangible
assets |
2 520 |
3
296 |
3 024 |
Equity |
3 210 |
3 716 |
3 188 |
Property, plant
and equipment |
3
704 |
2 487 |
2 658 |
Other provisions for liabilities incl.
P&A (long) |
867 |
1 048 |
896 |
Calculated tax receivables
(long) |
148 |
261 |
- |
Bonds |
2 476 |
590 |
2 474 |
| Deferred tax asset |
665 |
- |
630 |
Revolving credit facility |
2 150 |
1 453 |
2 037 |
| Receivables and other assets |
1 230 |
737 |
1 109 |
|
|
|
|
Calculated
tax receivables (short) |
1
417 |
1 278 |
1 411 |
Exploration facility |
681 |
970 |
478 |
Cash and
cash equivalents |
821 |
736 |
1 709 |
Creditors, other current liabilities
incl. P&A (short) |
1 121 |
1 018 |
1 469 |
Total
Assets |
10 504 |
8 794 |
10 541 |
Total Equity and Liabilities |
10 504 |
8 794 |
10 541 |
Sources of funds
Exploration
Q1 2014
Discoveries in the first quarter
Discovery on Langlitinden
- Well 7222/11-2 encountered an oil-bearing channel sand of Triassic age
- Det norske is of the opinion that the well is noncommercial as of today
- Currently evaluating remaining prospectivity
Discovery on Trell
- Well 25/5-9 encountered a gross oil column of 21 metres in the Heimdal formation, of which 19 metres has good reservoir quality
- Preliminary estimates indicate recoverable volumes of between 0.5 – 2.0 million scm
- Licencees will evaluate the discovery together with other nearby prospects and consider further follow-up
2014 drilling plan
| Prospect |
Share |
mmboe |
Operator |
Rig |
Q1 2014 |
Q2 2014 |
Q3 2014 |
Q4 2014 |
PL 102F
Trell |
10% |
15-121 |
Total |
Leiv Eriksson |
|
|
|
|
| PL 659 Langlitinden |
20% |
154-374 |
Det norske |
Trans. Barents |
|
|
|
|
| PL 265 JS Geitungen |
20% |
Appr. |
Statoil |
Ocean Vanguard |
|
|
|
|
| PL 550 Gotama |
10% |
10-150 |
Tullow
Oil |
Borgland Dolphin |
|
|
|
|
| PL 558 Terne |
20% |
15-145 |
E.ON |
Borgland
Dolphin |
|
|
|
|
PL 554 Garantiana
2 |
20% |
Appr. |
Total |
Leiv Eriksson |
|
|
|
|
PL 492 Gohta
2 |
40% |
Appr. |
Lundin |
Island Innovator |
|
|
|
|
| PL 494 Heimdalshøe |
30% |
30-230 |
Det norske |
Maersk
Giant |
|
|
|
|
| PL 553 Kvitvola |
40% |
13-115 |
Det norske |
Borgland Dolphin |
|
|
|
|
*Please note that the drilling plan is often subject to changes due to rig planning etc. Partner operated wells
PL 550 Gotama
- License located north of Troll
- Potential gross resources:
- 10-150 mmboe
- Prospect information:
- Main target: Intra Draupne sandstone also target in Fensfjord Fm. and Brent Gp.
- Source: Upper Jurassic shales
- Trap: Structural 4-way closure/ pinch out
- Main risk is the geometry of the trap and reservoir presence
- Water depth
-
348 meters
-
Det norske 10%
- Tullow Oil (o) 80%
- VNG Norge AS 10%
PL 558 Terne
- License located east of Skarv north of Heidrun
- Potential gross resources:
- 15-145 mmboe
- Prospect information:
- Main target: M-L Jurassic Fangst Gp
- Source: U Jurassic shales
- Trap: Truncated and fault bounded structural 3 way closure
- Main risk is HC-charging of the trap
- Water depth
-
430 meters
-
Det norske 20%
- E.ON (o) 30%
- PGNiG 30%
- Petoro 20%
PL 554 Garantiana 2
- License located NE Visund Field
- Prospect information:
- Main target: Cook Fm and Statfjord Fm.
- Source: Upper Jurassic shales
- Trap: Structural 4-way closure
- Main risk is the reservoir quality
Water depth
375 meters
- Total (o) 40% Det norske 20%
- Spike 20%
- Svenska 20%
PL 492 Gohta 2
- License located north of Snøhvit
- Prospect information:
- Main target: Permian karstified carbonates
- Source: Triassic and Paleozoic shales
- Trap: Structural 4-way closure
- Main risk is reservoir presence
Water depth
332 meters
- Det norske 40%
- Lundin (o) 40%
- Noreco 20%
Outlook
Q1 2014
Summary and outlook
Field developments
- Johan Sverdrup concept selected, unitisation negotiations have started
- Ivar Aasen progressing according to plan
Exploration
- Exciting prospects to be drilled for the remainder of the year
- Company will participate in around 10 exploration wells in 2014
- Gotama is ongoing
Financing
Ongoing work to secure the optimum financing structure for the company