Oil firm Det norske cuts capex outlook for 2016

(Adds analyst comment, detail)

OSLO, July 14 (Reuters) - Norwegian oil firm Det norske is to cut capital spending this year due to project cost savings after reporting a smaller than expected 22 percent fall in second-quarter core profit.

The company said on Thursday it expected capital spending of $900-920 million this year down from a previous estimate of $925-975 million. But Det norske also said exploration spending this year would rise to $200-220 million from a previous range of $160-170 million due to more wells being drilled.

"It looks like the company's effort to collaborate with other industries and its continuous cost focus are paying off," Swedbank (LSE: 0H6T.L - news) analyst Teodor Sveen-Nilsen said in a note.

In June, Det norske agreed a $1.3 billion deal with BP to merge their Norwegian businesses. Det norske said the merger was progressing according to plan and it was due to close by the third-quarter.

The deal aims to cut costs, challenge Statoil (LSE: 0M2Z.L - news) 's dominance of the local industry and also seek further acquisitions, the two firms have previously said.

Det norske's second-quarter core earnings (EBITDA) fell to $174 million compared to $224 million last year, beating forecasts in a Reuters poll of $154 million.

"The main reasons for the better than expected figures were two-percent higher production ... (and) low exploration expenses," Sveen-Nilsen said. (Reporting by Stine Jacobsen, writing by Stine Jacobsen and Gwladys Fouche. Editing by Jane Merriman)