Aker BP, a Norwegian company, expecting higher production

July 14 (UPI) -- Aker BP, a merger of Norwegian energy companies and a subsidiary of BP, said Friday it raised its guidance for output but lowered it for production costs.

One of the first companies out of the gate with second quarter results, the company said production costs were $121 million, up from $39 million, though total income of $595 million was nearly twice what it was last year, mainly because of the tie up with the Norwegian subsidiary of BP.

"Aker BP continued to deliver solid performance in the second quarter with stable operations, efficient drilling operations and development projects progressing according to plan," CEO Karl Hersvik said in a statement. "The company continues to build on a strong platform for further value creation."

The company reported first quarter production of 145.3 million barrels of oil equivalent, an increase of 14.8 percent from the previous quarter. Most of the company's output came from the Alvheim license area, which draws oil using a floating production facility from four fields in the greater region.

Aker BP holds stakes in some of the more promising prospects offshore Norway, including the giant Johan Sverdrup oil field. Production in June began at the Gina Krog field offshore Norway and the company said it expected output to accelerate during the year at the larger Edvard Grieg field.

The company said Friday it expects to produce between 135 million barrels of oil equivalent and 140 million barrels of oil equivalent per day for all of 2017, an upward revision of about 5 percent. Full-year production costs were estimated at $10 per barrel of oil equivalent, a downward revision of about 9 percent.

Spending on exploration for the quarter was $61 million. For the year, the company left its plans unchanged, allocating between $280 million and $300 million for exploration spending.