DNO reports Iraqi production rebound, North Sea exploration success

(WO) – DNO ASA reported 2023 revenues of $668 million and operating profit of $218 million on the back of production rebound in the Kurdistan region of Iraq in a year marked by North Sea exploration success.

Net production averaged 52,600 boepd, of which Kurdistan contributed 34,900 boepd, North Sea 14,200 boepd and West Africa 3,500 boepd. The pivot towards the North Sea, accelerated in 2019, delivering a string of discoveries with combined recoverable volumes estimated at 100 MMboe net to the company last year.

At year-end, gross production from the DNO-operated Tawke license had largely recovered from the March 2023 export pipeline shutdown and was averaging 80,000 boepd. The company’s net entitlement share is sold at reduced prices in the low-to-mid $30s per barrel on a cash and carry basis and transported by traders by road tanker or pipelined to local refineries.

With operational spend down 65%, Tawke sales now generate some $10 million per month of free cash flows to DNO, notwithstanding lower realized prices.

This year, net production in the North Sea is projected at 15,000-16,000 boepd; the bolt-on acquisition of a 25% stake in the producing UK field Arran will add another 2,000-2,500 boepd once completed.

In Kurdistan, DNO expects gross operated production at the Tawke license to continue to average 80,000 boepd. That figure could change depending on the outcome of ongoing discussions related to recovery of arrears for past deliveries to the Kurdistan Regional Government and payment terms and conditions for any future oil exports, which in turn will drive investments in wells.