Det norske positioned for rapid growth

Det norske oljeselskap ASA (”DETNOR”) reported MNOK 393.9 in operating revenues for the fourth quarter 2008, compared to MNOK 55,6 in the same quarter 2007. The operating loss amounted to MNOK 361.4, and is strongly affected by write downs of MNOK 400,4. Net profit in the period was MNOK 235,6. In the corresponding quarter last year, the company reported an operating loss of MNOK 112,2. Total exploration expenses in Q4 amounted to MNOK 238.6 (122.8). Production in Q4 was 195.800 (102.000). The oil was sold at an average price of USD 45.80 per barrel.

Det norske strengthened its financial position considerably during Q4, and now has more than NOK two billion in cash and tax receivables on accumulated exploration expenses. This is due to the sale of interests in Goliat and Yme. In October, Det norske sold its 15 percent license interest in PL 229, PL 229B and PL 229C, including the Goliat field, to StatoilHydro, for MNOK 1 100. The settlement took place in December. In October, Det norske also sold its 10 percent interest in PL 316, PL 316B and PL 316 DS, including the Yme field, to Lotos Exploration and Production Norge AS, for MNOK 390. This settlement took place in January 2009, even though rights of ownership were transferred to Lotos on December 31, 2008.

An active year
For 2009, Det norske has prepared a programme for nine exploration wells, all operated by the company. This is the most extensive exploration programme ever carried out by a Norwegian independent.

Throughout the year, Det norske will participate in a total of 15 exploration wells. The Fulla prospect in PL 035B was the first prospect to be drilled in the 2009 exploration programme, and resulted in a natural gas/condensate discovery of between 6 and 19 million barrels of oil equivalents. The operator StatoilHydro is planning an appraisal well during spring 2009 to help determine the size of the discovery. During Q1, Det norske has started drilling at Freke (PL 029B) and expect to hit the reservoir in March.

The company has strengthened its position as the number two company on the Norwegian shelf, also through new allocations of licenses and operatorships. In December, the company was awarded ownership in seven licenses, and the operatorship in five of these, in APA 2008. In total, Det norske now has ownership interests in 47 licenses, of which 27 are operated by the company. Det norske is one of eleven companies qualified as operator for licenses in the Barents Sea in the 20th licensing round.

Creating value
The Norwegian Ministry of Petroleum and Energy has concluded that Det norskes obligations in production license 364, including the Frøy field, has been fulfilled. The licensees were therefore granted a ten-year extension of the licence period, until 2019. Two more exploration wells are planned in licenses near the Frøy field in 2009, while a third exploratory well is proposed, but not yet decided. These drilling operations can establish the existence of new discoveries that can be exploited through the planned Frøy installation.

Det norske seeks to prioritize projects near existing infrastructure, where we can quickly create the greatest value. In the North Sea, Det norske has designated four areas of special strategic interest for the company; The Frøy area, Varg, the Southern Vikinggraben/Draupne, and the Jotun area. In October, Det norske entered into a contract with StatoilHydro, receiving ten per cent in PL 102 and 57 per cent in PL 169, in return for ten per cent ownership in PL 265. PL 102 includes the David prospect, situated near the Frøy field, whereas PL 169 is an important addition to the Jotun area. These swaps will strengthen Det norske in two of its core areas. In the Norwegian Sea, for the same reason, our exploration activities are concentrated around Norne/Draugen and Åsgard.


New board
In accordance with the integration agreement between NOIL and Pertra, DNO in January 2009 reduced its ownership in Det norske to 25 per cent. At Det norske’s extraordinary general assembly of February 2, 2009, five new board members were elected, including a new chair of the board. The new Board will, together with the management, thoroughly assess the opportunities for cooperation that exists to create the most effective company for the benefit of shareholders and society.