DNO Reports Robust Third Quarter 2018 Results

DNO ASA, the Norwegian oil and gas operator, today announced a third quarter 2018 net profit of US$63 million from operating revenue of US$171 million on the back of solid production,

OSLO, (UrduPoint / Pakistan Point News / WAM - 01st Nov, 2018) DNO ASA, the Norwegian oil and gas operator, today announced a third quarter 2018 net profit of US$63 million from operating revenue of US$171 million on the back of solid production, regular export payments and higher oil prices. During the same period last year, the company recorded a US$93 million net loss, excluding the one-time recognition of its Kurdistan Settlement Agreement with the Kurdistan Regional Government in Iraq in August 2017, on operating revenue of US$73 million.

Second quarter net profit for 2018 was US$43 million, on operating revenue of US$147 million.

The Company has received ten monthly Kurdistan export payments year-to-date totalling US$500 million net to DNO, of which US$59 million was received in October. This compares to US$380 million received net to DNO during the full-year 2017. It expects to exit the year with operated Kurdistan production of at least 130,000 bopd, representing more than one-half of total production by international operators and around one-third of all Kurdistan exports.

DNO ASA is focused on the middle East and the North Sea. Founded in 1971 and listed on the Oslo Stock Exchange, the Company holds stakes in onshore and offshore licenses at various stages of exploration, development and production in the Kurdistan region of Iraq, Norway, Oman, the United Kingdom and Yemen. Its largest shareholder is RAK Petroleum.

Operated production averaged 117,600 barrels of oil equivalent per day (boepd) during the quarter including 81,500 boepd on a company working interest basis. DNO received three monthly export payments during the third quarter totalling US$164 million net to its 75 percent operated interest in the Tawke licence in the Kurdistan region of Iraq. Realized export prices averaged US$61 per barrel.

DNO maintained its strong financial position with free cash balances of US$640 million. In addition, the Company held US$335 million in marketable securities as at 30th September, including a 28.22 percent stake in London-listed Faroe Petroleum plc, a 5.

64 percent stake in Oslo-listed Panoro Energy ASA and a 4.83 percent stake in RAK Petroleum, which is also listed on the Oslo Stock Exchange.

Going into the fourth quarter, on the Tawke licence in Kurdistan, which contains the Tawke and Peshkabir fields the Company has increased production from the Peshkabir field to over 50,000 barrels of oil per day (bopd) from six wells less than 18 months after commencement of operations, beating its end-2018 target ahead of schedule and below budget. Six wells are currently producing from Peshkabir, and the seventh, Peshkabir-8, will shortly commence test production. Peshkabir-9 will spud in mid-November.

The Company has four active rigs in Kurdistan, of which one is at the Peshkabir field, two at the Tawke field and one at the Baeshiqa licence. In mid-October, the Company spud the Baeshiqa-1 exploration well to test the Cretaceous at the Baeshiqa structure. A back-to-back well to test the deeper Jurassic and Triassic on the same structure will follow in December. A third well is planned to test the Jurassic and Triassic on a separate structure during 2019.

At the Tawke field, two shallow Jeribe wells, Tawke-50 and Tawke-51, were brought onstream during October. The Tawke-49 well, drilled to the deeper Cretaceous, will follow later this month. The well has been drilled utilising underbalanced technology, the first on the licence, and is producing from the target zone while drilling. The Tawke-52 Cretaceous well will spud by the end of November. Tawke is currently producing at an average rate of 80,000 bopd.

Elsewhere, the Rungne prospect offshore Norway was spud last month by operator Faroe Petroleum. DNO separately holds a 10 percent interest in the licence. The Company will participate in at least five additional wells offshore Norway next year. The Company currently holds 21 Norway licences, including a 20 percent interest in a Barents Sea licence recently acquired from Chevron containing the Korpfjell prospect.