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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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Genel Energy attempts to Refinance Bonds

Genel Energy has announced that it has instructed the trustee for the GENEL01 bonds (ISIN: NO 001 0710 882) (‘GENEL01’ or ‘the Bonds’) to summons a bondholders’ meeting to resolve a refinancing of the existing Bonds.

The Company proposes to refinance GENEL01 through a partial early redemption and debt reduction by replacing the existing Bond Agreement with a new USD 300 million bond agreement. Bondholders holding a significant proportion of the Bonds have confirmed their commitment to vote in favour of the proposal.

In the proposal, the Company seeks to reduce its existing bond debt from the currently outstanding USD 421.8 million to USD 300 million, and at the same time extend maturity through amending and restating terms to a new 5 year bond with a coupon of 10% per annum.

Bondholders will, on a pro-rata basis, receive a partial early redemption of USD 121.8 million in cash at the prevailing call premium of 103% of par value. The remaining USD 300 million outstanding Bonds will remain outstanding with the same ISIN but with new and amended terms as set out in the term sheet described in detail in the summons for bondholders’ meeting (available at www.stamdata.com).

The bondholders meeting will be held on 20 December 2017 at 09:00 CET at the premises of Nordic Trustee AS. If approved, cash settlement and amendment of terms are expected to take place on 22 December 2017, subject to approval by the bondholders’ meeting.

The Company has mandated DNB Markets and Pareto Securities as managers for the contemplated transaction.

(Source: Genel Energy)

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“Good Quality” Oil Bearing Reservoirs found at Taq Taq

Genel Energy has announced an update on activity at the Taq Taq field (Genel 44% working interest).

The TT-29w well, which was drilled to appraise the northern flank of the Taq Taq field, has been completed as a producer after successfully encountering oil bearing Cretaceous reservoirs.

The well, which was drilled to a measured depth of 3,100 metres, encountered good quality oil bearing Cretaceous Shiranish and Kometan reservoirs. Six zones were subsequently tested over a 20 day period, with test rates of up to 6,400 bpd (40/64 inch choke) of 48° API oil delivered from individual zones.

Four of the five tests in the Shiranish produced dry oil, with one test tight. The Kometan reservoir test produced oil with a 40-50% water cut, confirming the oil water contact within the Kometan reservoir at this location in the field. TT-29w production has commenced from the Lower Shiranish reservoir at a rate of 3,200 bpd of dry oil on a restricted 24/64 inch choke, with the expectation that this rate will increase following an initial observation period.

The TT-29w well has proved a current oil water contact at this location on the northern flank of the field at a level at least 145 metres deeper than pre-drill estimates. Combined with the testing results, management is optimistic for the potential of the northern flank of the Taq Taq field.

However, it is too early to estimate what impact the well result will have on reserves, long-term production rates or future investment activity in the northern flank and the field as a whole.

In addition to the positive result from TT-29w, the TT-30 Pilaspi well was also successfully drilled as a producer in November and is currently producing around c.650 bopd. A further Pilaspi development well (TT-31) is planned before the end of 2017.

Gross production from the Taq Taq field is currently 15,100 bopd. Gross field production averaged 13,700 bopd in November 2017 and has averaged 18,300 bopd in 2017 to date.

(Source: Genel Energy)

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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)

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Rosneft in the Kurdish Region: Moscow’s Balancing Act

By Ahmed Tabaqchali. Originally published by Iraq in Context; re-published by Iraq Business News with permission. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Between February 2017 and mid-October, Rosneft signed a number of deals with the Kurdish Regional Government (KRG) that established for it, and by extension for Russia, a major position as both an investor and stakeholder in the Kurdish Region of Iraq (KRI)’s hydrocarbon resources and infrastructure.

The move was interpreted, especially by the KRG, as implicit support for the KRG in its bid for independence, especially in light of the latest deal signed following the reassertion of Iraq’s federal control over Kirkuk and other disputed territories. While there is an element of truth to this thinking, the deals are part of a wider geopolitical positioning for Russia as a major gas supplier to Europe and as an emerging power in the Middle East.

The deals provide Rosneft, and by extension Russia, effective control of the KRG’s Oil & Gas infrastructure, and a controlling stake in the region’s finances in more ways than one.

Within the oil space it has established this in three ways. The first was by providing USD 1.5bn in financing via forward oil sales payable over 3-5 years. This would be payable in kind from the KRG’s exports, until recently at about 550,000-600,000 barrels per day (bbl/d). However, the loss of the Kirkuk fields takes away about 430,000 bbl/d of production or eventually about half of the KRG’s exports.

This leaves the KRG with a tiny revenue stream after payments to International Oil Companies (IOC)’s, from which to make payments on forward oil sales of up USD 3.5 bn including Rosneft’s USD 1.5bn. A complicating factor is the repayment of other KRG debt, estimated at over USD 21bn by end of 2017, which will have to be factored into debt payment sustainability.

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Genel Energy Updates on Kurdistan Operations

Genel Energy has issued a trading and operations update for Q3 2017. The information has not been audited and may be subject to further review.

Murat Özgül (pictured), Chief Executive of Genel, said:

“During the quarter Genel executed a landmark settlement agreement with the KRG over historical receivables, which we expect to materially enhance our cash flows going forward. Ahead of those payments commencing we continued to generate meaningful free cash flow, resulting in a further 13% reduction in net debt during the period.

“Our operations in the Kurdistan Region of Iraq are progressing as normal – exports are continuing from Taq Taq and Tawke, payments are being received on time, and operations are proceeding at both fields, with testing now underway on the TT-29w well.“

Q3 2017 OPERATING PERFORMANCE

  • Q3 2017 net production averaged 33,810 bopd, with production for the nine months ending September 2017 averaging 36,030 bopd
  • Production and sales by field during Q3 2017 were as follows:

  • Tawke PSC (Genel 25% working interest)
    • Tawke PSC production in Q3 averaged 110,460 bopd, including long-term test production from the Peshkabir-2 well of 4,670 bopd.
    • In 2017 to date, the Tawke partners have drilled ten wells, including the Peshkabir-2 and 3 wells, four Cretaceous producers, three Jeribe producers and a Jeribe water injector
    • A further four development wells are planned on the Tawke PSC by year-end 2017 – two Cretaceous producers, one Jeribe producer and a Jeribe water disposal well
    • Peshkabir-3 well operations are ongoing, with results expected later in Q4. The Peshkabir early production facility remains on track to be installed by the end of 2017
  • Taq Taq PSC (Genel 44% working interest)
    • Taq Taq field production in Q3 averaged 14,080 bopd, and production has averaged 13,570 bopd during October 2017 to date
    • The TT-29w well, which is appraising the northern end of the Taq Taq field, reached target depth of 3,100 metres in early September 2017. A testing programme is now underway. Further development of the Cretaceous reservoir has been deferred pending results of the TT-29w testing programme
    • The EDC-24 rig has moved to the TT-30 well location, with two shallow horizontal wells set to be drilled in the Pilaspi reservoir before the end of the year
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DNO: First Payment under Kurdistan Receivables Settlement

DNO ASA, the Norwegian oil and gas operator, today reported the first payment from the Kurdistan Regional Government under the recently concluded agreement covering outstanding receivables for past crude oil deliveries.

Under the agreement effective 1 August 2017, the Company was assigned the Government’s 20 percent interest in the Tawke license as well as three percent of gross Tawke license revenues payable monthly over a five-year period.

The payment of USD 4.02 million to DNO represents three percent of gross Tawke license revenues during August.

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

Following the receivables settlement, DNO’s stake in the Tawke license stands at 75 percent with Genel holding the balance.

(Source: DNO)

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Genel Energy gets New COO

Genel Energy has announced that Paul Schofield is stepping down from the role of Chief Operating Officer and will leave the Company on 16 October 2017.

Dr. William (Bill) Higgs will succeed him in the role and will join the Company on 6 November 2017.

Dr. Higgs has nearly 30 years of global exploration, development and operations experience, including over five years in executive roles for independent Exploration and Production companies.

He is a qualified geologist with extensive expertise in all engineering and other technical and commercial aspects of hydrocarbon development and production. Most recently, as Chief Operating Officer for Ophir Energy plc, he was responsible for managing the global asset portfolio.

Prior to joining Ophir he was Chief Executive Officer of Mediterranean Oil and Gas, overseeing the successful sale of the company in 2014. He previously spent 23 years at Chevron across a number of global roles, including responsibility for reservoir management of the giant Tengiz oil and sour gas field in Kazakhstan.

Murat Özgül, Chief Executive of Genel, said:

“I would like to thank Paul for his efforts at Genel and wish him all the best for the future. I look forward to working with Bill as we continue to maximise the value of our assets in the Kurdistan Region of Iraq.”

(Source: Genel Energy)

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KRG Makes Payments for July Oil Exports

Genel Energy has announced that the Taq Taq field partners have received a gross payment of $10.39 million from the Kurdistan Regional Government for oil sales during July 2017.

Genel’s net share of the payment is $5.71 million.

Gross oil sales from the Taq Taq field in July 2017 averaged 14,873 bopd, including both exports and Bazian refinery deliveries.

DNO ASA, as operator of the Tawke field, has also announced that the Tawke field partners have received a payment of $39.50 million from the Kurdistan Regional Government as payment towards July 2017 crude oil deliveries to the export market from the Tawke licence. The funds will be shared pro-rata by DNO and Genel.

(Source: Genel Energy)

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Taq Taq September Production Below Average

By John Lee.

Genel Energy has announced that production at its Taq Taq field in Iraqi Kurdistan, in which it has a 44 percent working interest, averaged 13,475 barrels per day in September.

This is considerably below the 2017 year-to-date average of 19,398 barrels per day.

(Source: Genel Energy)