DNO ramping up Kurdistan investments, reports strong 2017 results
OSLO -- DNO ASA, the Norwegian oil and gas operator, today announced a 50% hike in 2018 spending in the Kurdistan region of Iraq to $250 million net to the Company on the back of higher revenues and regular export payments. Annual 2017 revenues stood at $347 million, up 72% from 2016, bolstered by fourth quarter revenues of $116 million, the highest quarterly level in more than three years.
The Company fast-tracked the development of Peshkabir field with two wells currently producing a total of 16,000 bopd and commingled for export with another 97,000 bopd from the other DNO-operated field, Tawke, on the same license.
"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 $100 million - more than twice the investment to date," said DNO's Executive Chairman Bijan Mossavar-Rahmani. "And we have only started to appraise and develop this field which continues to surprise to the upside," he added.
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 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 $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% to 75%, plus 3% of gross license revenues over five years, contributed to higher export payments.
Operational cash flow more than tripled to $339 million in 2017 and DNO exited the year with a net cash position of $30 million versus net debt of $139 million at end-2016.