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Noreco, Detnor Rise After Lundin’s Oil Find at Gohta: Oslo Mover

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Sept. 10 (Bloomberg) -- Norwegian Energy Co. and Det Norske Oljeselskap ASA rose in Oslo after Lundin Petroleum AB found oil at the Gohta prospect in the Barents Sea amid rising exploration success in the Arctic waters off Norway’s northern tip.

Shares in Noreco rose as much as 14 percent, the most in more than 15 months, while Detnor gained as much as 2.4 percent, the biggest intraday increase in a month. Lundin added as much as 3 percent in Stockholm, the most in more than five months.

Lundin, which operates license 492 where Gohta is located, said its exploration well there found a 75-meter (246-feet) oil column and a 25-meter gas/condensate cap. “A drill stem test will now be carried out to establish the flow properties of the discovery,” it said in a statement today.

The find, 35 kilometers (22 miles) north-west of Statoil ASA’s Snohvit gas field, comes four days after OMV AG said it found as much as 160 million barrels of oil and 40 billion cubic feet of gas at the Barents Sea’s Wisting prospect, Norway’s northernmost discovery. It may help boost confidence in Norway’s Arctic region after Statoil in June delayed plans to develop the Johan Castberg discoveries there because of costs, tax increases on energy companies and lower resource estimates.

“The proximity to Johan Castberg and Snohvit is very positive for both oil and gas off-take,” RS Platou Markets AS analyst Alex Gheorghe said in an e-mail. Shares in Noreco, which has a 20 percent stake in license 492, are expected to rise 5 percent to 15 percent today on the news, he wrote.

‘Substantial Volumes’

There will be a “more muted impact” on shares in Detnor and Lundin, which both have 40 percent interests, the analyst wrote.

Norway’s oil industry is expanding into the waters off its northern tip to compensate for dwindling production from aging fields in the North Sea. The country’s crude production is expected to drop for a 13th consecutive year in 2013 to less than half a 2000 peak.

While no resource estimate was given for Gohta, the few details given so far “could indicate substantial volumes,” Swedbank First Securities analyst Teodor Sveen Nilsen said in an e-mailed note. Based on an average pre-drill volume estimate of 160 million barrels of oil equivalent, the fair value per share of the find is estimated to be worth 1.2 krona for Lundin, 1.2 kroner for Det Norske and 0.6 kroner for Noreco, he wrote.

Noreco traded 7.2 percent higher at 2.83 kroner as of 10:50 a.m. in Oslo, while Detnor was up 1.9 percent at 84.55 kroner. Lundin rose 2.3 percent to 145.50 kronor at the same time in Stockholm.

To contact the reporter on this story: Mikael Holter in Oslo on at mholter2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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