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DNO Expands and Accelerates Kurdistan Operations

DNO ASA, the Norwegian oil and gas operator, today announced expansion and acceleration of operations in the Kurdistan region of Iraq while building up its North Sea exposure.

First quarter revenues, the highest in nearly four years, stood at USD 142 million and net profit at USD 18 million. The Company exited the quarter with cash balances of USD 518 million plus USD 76 million in treasury shares and marketable securities.

The Company added a third license in Kurdistan following government and partner approvals of the previously announced transaction with ExxonMobil. Effective 10 April 2018, DNO assumed operatorship of the Baeshiqa license with a 40 percent (32 percent participating) interest alongside ExxonMobil, Turkish Energy Company and the Kurdistan Regional Government.

At the Tawke license, the Company fast tracked development of the Peshkabir field with three new wells. The recently completed Peshkabir-4 well will shortly undergo production testing and the Peshkabir-5 well is drilling ahead at 2,250 meters. The Peshkabir-6 well was spudded as a development well last week and will also explore the field’s deeper Triassic formation.

“We have the wind on our back,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani, “with higher oil prices, timely export payments in Kurdistan, a growing portfolio of quality assets, efficient drilling and bold strategy execution.“

On the DNO-operated Tawke license containing the Peshkabir and Tawke fields, 15,000 barrels of oil per day (bopd) of production from two Peshkabir wells are comingled with 90,000 bopd from the flagship Tawke field for export through Turkey.

A new Tawke Cretaceous well was brought onstream earlier this month at more than 5,000 bopd. The Company will drill additional Tawke development wells in 2018 following mobilization of a fourth rig.

Elsewhere, the Company acquired 28.71 percent of North Sea-focused Faroe Petroleum plc at a price of GBP 1.25 per share through four separate transactions in April, complementing DNO’s existing portfolio of 19 exploration licenses offshore Norway and the United Kingdom.

DNO’s current cash balance stands at USD 356 million plus USD 280 million in treasury shares and marketable securities. The Company’s outstanding bond debt remains at USD 400 million and the equity ratio at 61 percent.

(Source: DNO)

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Genel Energy receives Payment for January Sales

Genel Energy has announced that the Taq Taq partners have received a gross payment of $8.30 million from the Kurdistan Regional Government (KRG) for oil sales during January 2018. Genel’s net share of the payment is $4.57 million.

Genel also notes the announcement from DNO ASA, as operator of the Tawke PSC, that the Tawke partners have received $56.44 million from the KRG as payment for January 2018 crude oil deliveries to the export market from the Tawke licence. Genel’s net share of the payment is $14.07 million.

The Company has received an override payment of $7.86 million from the KRG, representing 4.5% of Tawke gross licence revenues for the month of January 2018, as per the terms of the Receivable Settlement Agreement.

In total, Genel’s net share of payments relating to January 2018 exports totals $26.50 million.

(Source: Genel Energy)

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DNO announces Higher Revenues, Profits, Production, Reserves

DNO ASA, the Norwegian oil and gas operator, today released its 2017 Annual Report and Accounts together with its 2017 Annual Statement of Reserves and Resources and reported improvements across key financial and operational metrics.

Annual 2017 revenues climbed to USD 347 million, up 72 percent from year earlier levels. Operating profit totaled USD 521 million, up from USD 6 million in 2016, with the recognition as other income of USD 556 million under the August 2017 Kurdistan Receivables Settlement Agreement.

Excluding the settlement agreement and non-cash impairments, operating profit in 2017 more than doubled to USD 72 million. And notwithstanding a doubling of operational spend to USD 259 million, the Company ended the year with a cash balance of USD 430 million.

Company Working Interest (CWI) production increased to 73,700 barrels of oil equivalent per day (boepd) from 69,200 boepd in 2016 (operated production in 2017 was 113,500 boepd, up from 112,600 boepd in 2016). Lifting costs last year averaged USD 3.6 per barrel of oil equivalent.

Iraqi Kurdistan

DNO’s production continues to be driven by the Tawke field in Kurdistan, where output in 2017 averaged 105,500 barrels of oil per day (bopd).

The adjacent Peshkabir field, brought on stream midyear, contributed another 3,600 bopd to bring total Tawke license production to 109,100 bopd in 2017. The Company plans to bolster production from the license with 10 new wells in 2018.

“We are committed this year to continue to outdrill, outproduce and outperform all other international companies in Kurdistan – combined,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani.

At yearend 2017, DNO’s CWI 1P reserves climbed to 240 million barrels of oil equivalent (MMboe) from 219 MMboe at yearend 2016, after adjusting for production during the year, technical revisions and an increase in DNO’s operated stake in the Tawke license from 55 percent to 75 percent.

On a 2P basis, DNO’s CWI reserves stood at 384 MMboe (up from 368 MMboe) and on a 3P basis, DNO’s CWI reserves stood at 666 MMboe (up from 521 MMboe). DNO’s yearend 2017 CWI contingent resources (2C) were estimated at 99 MMboe, down from 161 MMboe at yearend 2016, following reclassification of certain contingent resources to reserves.

On a gross basis, at yearend 2017, 1P reserves at the Tawke license containing the Tawke and Peshkabir fields totaled 348 MMboe (353 MMboe at yearend 2016) after adjusting for production of 40 MMboe during the year and technical revisions; 2P reserves totaled 513 MMboe (536 MMboe at yearend 2016); 3P reserves totaled 880 MMboe (725 MMboe at yearend 2016) and 2C resources totaled 91 MMboe (211 MMboe at yearend 2016) following reclassification.

International petroleum consultants DeGolyer and MacNaughton carried out the annual independent assessment of the Tawke and Peshkabir fields. DNO internally evaluated the remaining assets.

(Source: DNO)

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DNO: Revenues and Investment Rise Sharply

DNO ASA, the Norwegian oil and gas operator, today announced a 50 percent hike in 2018 spending in the Kurdistan region of Iraq to USD 250 million net to the Company on the back of higher revenues and regular export payments.

Annual 2017 revenues stood at USD 347 million, up 72 percent from 2016, bolstered by fourth quarter revenues of USD 116 million, the highest quarterly level in more than three years.

The Company fast tracked the development of the Peshkabir field with two wells currently producing a total of 16,000 barrels of oil per day (bopd) and commingled for export with another 97,000 bopd from the other DNO-operated field, Tawke, on the same license.

DNO’s Executive Chairman Bijan Mossavar-Rahmani:

“We made the Peshkabir Cretaceous discovery early in 2017, initiated early production in June, tripled output by year’s end and already have exported two million barrels with an estimated value of USD 100 million – more than twice the investment to date. And we have only started to appraise and develop this field which continues to surprise to the upside.”

A total of six Peshkabir wells will be drilled this year with field production expected to reach 30,000 bopd by summer and continue to ramp up in the second half of the year.

At the Tawke field, plans are being finalized with partner Genel Energy plc to drill four wells in 2018, in addition to the currently drilling Tawke-48 well slated for completion by end-February.

Elsewhere in Kurdistan, DNO has re-entered and sidetracked the Hawler-1 well to appraise the Benenan heavy oil field in the Erbil license, achieving a technical milestone with the first ever multilateral well and the first ever dual completion in Kurdistan. Testing will commence shortly, and if successful, will be followed by additional wells.

The Company received 12 monthly Kurdistan export payments during 2017 totaling USD 380 million net to DNO. The landmark August 2017 receivables settlement agreement, which increased DNO’s stake in the Tawke and Peshkabir fields from 55 percent to 75 percent plus three percent of gross license revenues over five years, contributed to higher export payments.

Operational cash flow more than tripled to USD 339 million in 2017 and DNO exited the year with a net cash position of USD 30 million versus net debt of USD 139 million at end-2016.

(Source: DNO)

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DNO: Revenues and Investment Rise Sharply

DNO ASA, the Norwegian oil and gas operator, today announced a 50 percent hike in 2018 spending in the Kurdistan region of Iraq to USD 250 million net to the Company on the back of higher revenues and regular export payments.

Annual 2017 revenues stood at USD 347 million, up 72 percent from 2016, bolstered by fourth quarter revenues of USD 116 million, the highest quarterly level in more than three years.

The Company fast tracked the development of the Peshkabir field with two wells currently producing a total of 16,000 barrels of oil per day (bopd) and commingled for export with another 97,000 bopd from the other DNO-operated field, Tawke, on the same license.

DNO’s Executive Chairman Bijan Mossavar-Rahmani:

“We made the Peshkabir Cretaceous discovery early in 2017, initiated early production in June, tripled output by year’s end and already have exported two million barrels with an estimated value of USD 100 million – more than twice the investment to date. And we have only started to appraise and develop this field which continues to surprise to the upside.”

A total of six Peshkabir wells will be drilled this year with field production expected to reach 30,000 bopd by summer and continue to ramp up in the second half of the year.

At the Tawke field, plans are being finalized with partner Genel Energy plc to drill four wells in 2018, in addition to the currently drilling Tawke-48 well slated for completion by end-February.

Elsewhere in Kurdistan, DNO has re-entered and sidetracked the Hawler-1 well to appraise the Benenan heavy oil field in the Erbil license, achieving a technical milestone with the first ever multilateral well and the first ever dual completion in Kurdistan. Testing will commence shortly, and if successful, will be followed by additional wells.

The Company received 12 monthly Kurdistan export payments during 2017 totaling USD 380 million net to DNO. The landmark August 2017 receivables settlement agreement, which increased DNO’s stake in the Tawke and Peshkabir fields from 55 percent to 75 percent plus three percent of gross license revenues over five years, contributed to higher export payments.

Operational cash flow more than tripled to USD 339 million in 2017 and DNO exited the year with a net cash position of USD 30 million versus net debt of USD 139 million at end-2016.

(Source: DNO)

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DNO Reports Payment for Tawke Deliveries

DNO ASA, the Norwegian oil and gas operator, today reported receipt of USD 53.71 million from the Kurdistan Regional Government as payment for October 2017 crude oil deliveries to the export market from the Tawke license.

The funds will be shared by DNO and partner Genel Energy plc pro-rata to the companies’ interests in the license.

The payment to DNO of three percent of gross Tawke license revenues during October 2017, as provided for under last August’s receivables settlement agreement, was previously received by the Company.
  
DNO operates and has a 75 percent interest in the Tawke license, which contains the Tawke and Peshkabir fields. Combined production from the two fields currently averages 110,000 barrels of oil per day.

(Source: DNO)

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Genel Energy confirms Payments for KRI Oil Exports

Genel Energy has announced the receipt of payments from the Kurdistan Regional Government (KRG) for oil sales during September 2017 from the Tawke and Taq Taq PSCs.

DNO ASA, as operator of the Tawke PSC, has announced the receipt of $54.32 million from the KRG as payment towards September 2017 crude oil deliveries to the export market from the Tawke licence. Genel’s net share of the payment is $13.58 million.

The Taq Taq field partners have received a gross payment of $9.70 million from the KRG for oil sales during September 2017. Genel’s net share of the payment is $5.33 million.

Genel has also received an override payment of $6.55 million from the KRG, representing 4.5% of Tawke gross field revenues for the month of October 2017, as per the terms of the Receivable Settlement Agreement.

Combined, Genel’s December 2017 net receipts total $25.46 million.

(Source: Genel Energy)

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DNO Steps Up Production at Peshkabir Field

DNO ASA, the Norwegian oil and gas operator, today announced a tripling of production from the Peshkabir field in the Tawke license in the Kurdistan region of Iraq to 15,000 barrels of oil per day (bopd) following completion of the Peshkabir-3 well testing, stimulation and cleanup program.

A total of 11 zones in a 1.2 kilometer horizontal section of Cretaceous and Jurassic reservoir in the Peshkabir-3 well were individually tested and flowed successfully, of which ten were oil zones and one a gas zone.

The oil zones tested an average of 5,340 bopd per zone on a 64/64″ choke, with the highest individual test rate of 7,200 bopd. A multi-zone combined production test totaled 12,500 bopd on a 128/64″ choke from five zones.

Production from the previously drilled Peshkabir-2 well, in operation since May, together with that of the new Peshkabir-3 well are currently processed through temporary test package facilities and trucked to DNO’s adjacent Tawke field facilities for export.

As previously announced, the Tawke license partners are proceeding with fast track plans to commission an early production facility by yearend and complete installation of pipeline connections early in 2018 to allow ramp up of output at the Peshkabir field.

Preparations are underway to drill the Peshkabir-4 well which will also be designed to test the underlying Triassic reservoir.

DNO operates and has a 75 percent interest in the Tawke license, with partner Genel Energy plc holding the remainder. The license contains the Tawke and Peshkabir fields whose combined year-to-date production has averaged 110,000 bopd.

(Source: DNO)

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DNO Flows Peshkabir-3 Well

DNO ASA, the Norwegian oil and gas operator, today announced flow rates of more than 3,000 barrels of oil per day (bopd) from the first zone tested in the Peshkabir-3 well in the Kurdistan region of Iraq. Nine other oil zones and one gas zone have been identified for testing in a 1.2 kilometer horizontal section of Cretaceous and Jurassic reservoir.

The Company has fast tracked the development of the field and an early production facility will be commissioned by year-end. The previously drilled Peshkabir-2 well has produced at a steady rate of 4,700 bopd since May and comingled with over 100,000 bopd from the adjacent Tawke field for export. DNO’s operations in Kurdistan continue uninterrupted.

DNO is the most active driller in Kurdistan with three rigs deployed and 15 wells in 2017 across three operated fields in various stages of production, development and appraisal. Most recently, the Company spud the Hawler-1A multilateral well in October to appraise the Benenan heavy oil field in the Erbil license.

The Company has received year-to-date export payments totaling USD 297 million net to DNO, up from USD 210 million during the full-year 2016. With continuing export payments, DNO will step up investments in Kurdistan in 2018.

The Company today released its third quarter operating and financial update, reporting an operating profit of USD 469 million during the quarter. This follows recognition of USD 556 million as other income following the receivables settlement agreement with the Kurdistan Regional Government in August 2017.

Pursuant to the agreement, DNO was assigned an additional 20 percent in the Tawke license, bringing the Company’s operated stake to 75 percent. Partner Genel Energy plc holds the remaining 25 percent interest.

DNO’s cash balance stood at USD 399 million at the end of the third quarter, up from USD 261 million at end-2016. With the strengthening of its balance sheet, the Company’s equity ratio has increased to 60 percent.

(Source: DNO)

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Genel Energy confirms Payment from KRG

Genel Energy has announced that the company has received an override payment of $6.41 million from the Kurdistan Regional Government (KRG).

The payment represents 4.5% of Tawke gross field revenues for the month of September 2017, as per the terms of the Receivable Settlement Agreement.

An entitlement invoice for that month’s export deliveries has been issued separately and will be shared pro-rata with DNO upon receipt.

(Source: Genel Energy)