OSLO: Norwegian oil producer Det norske launched deep cost cuts, took an impairment charge, and said it was exploring new financing options to pay for its share in the giant Johan Sverdrup field in the North Sea.
Det norske said it was cutting exploration and aiming to cut costs by over $100 million this year even as it raises output and continues to spend on several major projects.
"The company is considering diversifying its capital structure going forward, as well as aligning loan agreements," it said. "The support from the company's bank group is considered to be strong and the company is confident that it will be able to fund its planned future developments."
Sverdrup, which holds up to 3 billion barrels of oil equivalents and will cost about $29 billion to fully develop, is expected to weigh on Det norske's cash for years to come.
The firm, which holds 11.9 percent in the Statoil operated project, considered itself fully funded for the project but the drop in oil prices, which have more than halved since June, raised expectations in the market that it would need further financing before Sverdrup starts producing in late 2019.
Det norske's fourth-quarter operating loss narrowed to $184 million from $201 million a year earlier but trailed expectations for a loss of $132 million.
It booked an impairment of $319 million in the quarter, writing down part of the goodwill from its acquisition of Marathon Oil's Norwegian business.
It expects to produce between 58 million and 63 million barrels of oil equivalents per day (mmboe) in 2015, up from 51.2 mmboe in 2014. It will invest up to $1 billion this year.
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