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%.
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