May 21 (Bloomberg) -- Det Norske Oljeselskap ASA, an oil producer with stakes in Norway’s biggest find in 40 years, rose to a seven-week high in Oslo as production at the company’s Jette field in the North Sea starts earlier than expected.
The Trondheim-based company gained as much as 1.8 percent to 89.75 kroner, the highest intraday level since April 2, and where it was trading as of 4:07 p.m. Almost 230,000 shares have been traded so far today, equivalent to about 90 percent of the average daily volume during the last three months.
Detnor started production from the first well at Jette “with good results,” it said in a statement today. Output from a second well will begin tomorrow, the company said. Detnor has a 70 percent stake in Jette, while Petoro AS, which manages Norway’s direct stakes in its oil and gas assets, has the remaining 30 percent.
The second well’s production start is “earlier than we have assumed and provides upside potential to our first half production estimates,” Swedbank AB analyst Teodor Sveen Nilsen said in an e-mail. “We retain our buy recommendation and target price of 130 kroner a share.”
Detnor is transforming itself from an exploration company into an oil producer as pumping begins at fields including Jette and Ivar Aasen, scheduled to start in the fourth quarter of 2016. The company took a 1.9 billion kroner ($326.2 million) writedown on Jette in the third quarter after technical problems with a production well.
Shares in the company have more than doubled during the last two years after finds including Johan Sverdrup, which could hold as much as 3.6 billion barrels of oil, making it the biggest find off Norway since 1974. Detnor has stakes in two of the three licenses containing Sverdrup.
To contact the reporter on this story: Stephen Treloar in Oslo on at firstname.lastname@example.org
To contact the editor responsible for this story: Jonas Bergman at email@example.com