May 28 (Bloomberg) -- Det Norske Oljeselskap ASA, an energy producer with stakes in Norway’s biggest find in 40 years, pared gains in Oslo trading after increasing production guidance for its Jette field in the North Sea by less than had been reported.
The Trondheim-based company gained 1.9 percent to 92.5 kroner as of 1:07 p.m. local time, having earlier surged as much as 3.6 percent to 94 kroner, the highest intraday level in seven months.
Detnor, which started output from Jette on May 21, expects gross initial production from the field’s two wells of about 12,000 to 15,000 barrels of oil a day, up from earlier guidance of about 10,000 barrels, it said in a statement. Shares jumped earlier after Offshore.no, an oil-industry website, said Jette is producing at about 21,000 barrels a day, citing an unidentified person.
Output at that rate would have been double expectations, Alex Gheorghe, an analyst at RS Platou Markets AS, said in an e-mail. “The news is positive since the project was written off last year, and management has previously disclosed it’s unlikely it will recover costs,” Gheorghe wrote. “We expect the stock to outperform by about 1 to 2 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 ($329 million) writedown on Jette in the third quarter after technical problems with a production well.
“Jette is a small field and there are uncertainties with respect to future production rates,” Detnor said today. The company 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.
Shares in Detnor have more than tripled in 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 discovery off Norway since 1974. Detnor has stakes in two of the three licenses containing Sverdrup.
To contact the reporter on this story: Alastair Reed in in Oslo on at firstname.lastname@example.org
To contact the editor responsible for this story: Jonas Bergman at email@example.com