Det norske Lifts Output Guidance Ahead of BP Merger

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 merger) is expected to average between 62,000-65,000 barrels of oil equivalents per day in 2016, up from a previous guidance of 55,000-60,000 mboepd. CEO Karl Johnny Hersvik told a conference on Wednesday: "Our goal is simple, and that is to sanction new projects with a break even below $35 per barrel, all in."
 

Hersvik also said:

* Hersvik: "We have proven that we are able to cut cost and put productivity back in the front seat."

* Hersvik: "We still see that there is a possibility to reduce cost by 20 percent 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 percent and cut total execution time by 25 percent."

* Hersvik: "Our ambition is to keep growing through M&A and organic portfolio development. We are targeting high-value assets and operated assets where we can apply our mindset and increase productivity."

* Hersvik: "We believe that the current window of opportunity offers fantastic strategic possibilities on the NCS."

* Hersvik: "We are more interested in liquid exposure than gas exposure ... we are going to be extremely selective and disciplined."

* Det norske's production cost (excluding effect of the merger with BP) for 2016 is expected to be around $7.0 per barrel of oil equivalent, lowered from a previous guidance of $8.0-$9.0/boe.

* No changes have been made to the company's guidance for 2016 CAPEX and EXPEX, as presented on July 14, 2016.

* Det norske's shares trade 1 percent higher for the day at 0745 GMT while the Oslo benchmark index is down 0.3 percent Further company coverage: (Reporting By Camilla Knudsen