By John Lee.

Genel Energy has announced that the Taq Taq field partners have received a gross payment of $10.22 million from the Kurdistan Regional Government for oil sales during June 2017.

Genel’s net share of the payment is $5.62 million. Gross oil sales from the Taq Taq field (pictured) in June 2017 averaged 15,863 bopd, including both exports and Bazian refinery deliveries.

The company also notes the announcement from DNO ASA, as operator of the Tawke field, that the Tawke field partners have received a payment of $34.75 million from the Kurdistan Regional Government as payment towards June 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)

DNO ASA, the Norwegian oil and gas operator, today announced an agreement with ExxonMobil to join the Baeshiqa [Bashiqa, Bashika] license in the Kurdistan region of Iraq.

DNO will assume operatorship of the license with a 40 percent paying (32 percent net) interest, acquiring one-half of ExxonMobil’s position.

ExxonMobil retains a 40 percent paying (32 percent net) interest, the Turkish Energy Company (TEC) its 20 percent paying (16 percent net) interest and the Kurdistan Regional Government its 20 percent carried interest.

Pending Government approval, DNO will drill an exploration well in the first half of 2018 with a second exploration well to follow on a separate structure.

The 324 square kilometer license is situated 60 kilometers west of Erbil and 20 kilometers east of Mosul. ExxonMobil had previously conducted extensive geological and geophysical studies and constructed a drilling pad before work was interrupted due to security conditions in the region.

The Baeshiqa license contains two large, undrilled structures which are expected to have multiple independent stacked target reservoir systems, including in the Cretaceous, Jurassic and Triassic.

DNO currently operates two other licenses in Kurdistan: one contains the Tawke and Peshkabir fields which together produce over 110,000 barrels of oil per day and the other the Benenan and Bastora heavy oil fields which are undergoing further appraisal and development. With three rigs currently deployed, the Company is the most active driller among the international operators in Kurdistan.

Bijan Mossavar-Rahmani (pictured), DNO’s Executive Chairman, said:

“We are pleased to partner with ExxonMobil, TEC and the Government on this exciting exploration opportunity.

“We bring to the project a 10-year record of successful and fast-track operations in Kurdistan, culminating in more than 200 million barrels produced to date.

“Following regularization of export payments and a landmark agreement with the Government to close out our historical receivables, our foot is back firmly on the accelerator.”

(Source: DNO)

By John Lee.

Shares in Norway’s DNO continued to rise on Friday, following yesterday’s announcement of a “landmark settlement of outstanding receivables ” with the Kurdistan Regional Government (KRG).

At market close on Friday, the shares had gained 13.8 percent on the day, and 35 percent since Thursday morning.

However, DNO’s partner in Iraqi Kurdistan, Genel Energy, was down 1 percent for the day.

The full text of the KRG’s statement on the agreement follows:

The Kurdistan Regional Government (Government) has reached definitive binding agreements on the settlement of all historical outstanding receivables owed to DNO ASA, the operator of Tawke Field (DNO), and Genel Energy plc, which has participating interests in both Taq Taq and Tawke.

The following are the highlights of the settlements:

  • DNO and Genel shall make no further claims on all historical outstanding Tawke license receivables from the Government;
  •  Genel has also agreed settlement of its claims for its share of historical outstanding Taq Taq license receivables from the Government;
  • The Government has exercised its audit rights and made provisions to its own satisfaction with respect to the Tawke license for the period up to the 31st July, 2017 and has no further claims on DNO or Genel;
  • The Government has exercised its audit rights and made provisions to its own its satisfaction with respect to Genel’s past entitlements in the Taq Taq license for the period up to the 31st July, 2017 and has no further claims on payments booked or received by Genel in this regard;
  •  The Government has also discharged DNO and Genel from certain payment obligations including production bonuses, license fees, capacity building payments (in the case of Genel) and funding of a water purification project (in the case of DNO); 
  • In consideration of these settlements, the government assignedits 20 percent Government Interest in Tawke to DNO, and has removed Genel’s obligation of 30% Capacity Building Bonus payments from the Tawke license;
  • In addition, DNO and Genel will receive 3% and 4.5% respectively of gross Tawke license revenues each month from the Government over a five-year period, effective as of 1 August, 2017.

With these adjustments, the Kurdistan Regional Government has no further obligations of past payments of receivable or Petroleum Costs to these two companies with respect to deliveries of oil to the Government. 

The Government is very pleased with the productive and cooperative approach taken by both DNO and Genel in these negotiations, and looks forward to working with them to maximise revenues and to optimise potential reserves of the Tawke and Taq Taq license areas. We believe that this initiative will convey a strong positive message to the investors that the Government is fully committed to a robust win-win partnership with all the International Oil Companies operating in Kurdistan.

DNO ASA and Genel Energy’s statements on the settlements can be found on their websites here:

DNO ASA’s statement

Genel Energy’s statement

(Source: Yahoo!)

Shares in Norway’s DNO ASA jumped 8.7 percent this morning following the announcement that the company has reached a “landmark settlement of outstanding receivables owed to the Company for past crude oil deliveries“, and the announcement of half-year revenues up 43 percent from the same period last year.

Under the settlement, DNO has been assigned the 20 percent interest in the Tawke license held by the Kurdistan Regional Government (KRG).

Following the settlement, DNO holds a 75 percent operated stake in the license containing the Tawke and Peshkabir fields with combined proven and probable reserves in excess of 500 million barrels and production in excess of 100,000 barrels of oil per day.

In addition to the 20 percent interest, the Company will receive three percent of gross license revenues each month from the Government over a five-year period. The settlement is effective as of 1 August 2017.

DNO has settled its claims for all outstanding Tawke license receivables from the Government and the Government has exercised its Tawke license audit rights to its satisfaction for the period up to the effective date and has no adjustment claims.

The Government has also discharged DNO from certain payment obligations including production bonuses, license fees and a USD 150 million water purification project that is no longer required by the Government.

The removal of these liabilities and the transfer to DNO of the 20 percent interest and the right to the three percent revenue stream will bolster the Company’s balance sheet and future cash flow.

Bijan Mossavar-Rahmani (pictured), DNO’s Executive Chairman, said:

“We are very pleased with the Government’s initiative to settle receivables and normalize export payments to the operators. This sends a strong positive signal to investors and helps restore confidence in Kurdistan’s oil sector.”

DNO’s June-July 2017 outstanding invoices for Kurdistan exports will continue to be paid under the payment arrangement in place since January 2016.

(Sources: DNO, Yahoo!)

DNO ASA, the Norwegian oil and gas operator, today announced half-year 2017 revenues were up 43 percent from the same period last year following regular export payments in the Kurdistan region of Iraq.

Free cash flow jumped four-fold to USD 157 million on operated production of 114,000 barrels of oil equivalent per day (boepd) during the first half of the year.

DNO’s cash balance rose USD 120 million during the first six months to USD 381 million, reducing net debt to USD 19 million. Planned 2017 capital expenditures have been increased to USD 130 million, up from the guidance set earlier this year of USD 100 million.

The Company mobilized a third rig as part of an expanded drilling program at its flagship Tawke field comprising 10 production wells in 2017, of which six are deep Cretaceous and four shallow Jeribe wells.

Also on the Tawke license, the Peshkabir-2 well has been producing from the Cretaceous reservoir at a steady rate of 4,700 barrels of oil per day (bopd) of 28° API crude oil since June. The well can produce an additional 2,500 bopd of 24° API crude oil from the Jurassic reservoir.

The Peshkabir-3 well, spud in July, is drilling at 2,400 meters towards target depth of 4,000 meters to appraise the northern extension of the Cretaceous reservoir. An early production facility has been acquired for installation at the field, with both Peshkabir wells planned onstream by year-end and two additional wells planned in 2018.

Elsewhere, the Company will participate in Norway’s two upcoming licensing rounds in the autumn and expects to add to its 11 North Sea licenses acquired earlier this year.

Offshore Oman, the West Bukha-5B well was drilled to 4,500 meters and tested oil but would not flow naturally and has been shut in pending completion of artificial lift studies. The Company has impaired the drilling costs in its half-year accounts. Separately, the Bukha-1 well umbilical replacement and production reinstatement is nearly complete.

(Source: DNO)

DNO ASA, the Norwegian oil and gas operator, has reported receipt of USD 39.59 million from the Kurdistan Regional Government as payment towards May 2017 crude oil deliveries to the export market from the Tawke license.

The funds, to be shared pro-rata by DNO and partner Genel Energy plc, include USD 33.21 million towards monthly deliveries and USD 6.39 million towards recovery of outstanding receivables.

(Source: DNO)

DNO, the Norwegian oil and gas operator, today announced resumption of appraisal drilling at the Peshkabir discovery on the Tawke license in the Kurdistan region of Iraq following extended testing of the Cretaceous and Jurassic reservoirs in the Peshkabir-2 well.

The Company spud the Peshkabir-3 well on 8 July as part of a fast track field development plan including the acquisition and installation of an early production facility by yearend 2017 to be followed by a pipeline connection to the Tawke export terminal at Fish Khabur.

Three Cretaceous productive horizons (Upper Shiranish, Lower Shiranish and Qamchuqa) tested 3,800 barrels of oil per day (bopd), 4,000 bopd and 1,100 bopd, respectively, of 28o API gravity crude oil during a two-week cased hole testing program in May. The Cretaceous column in the Peshkabir-2 well is estimated to range between 380-590 meters.

Two productive horizons in the deeper Jurassic formation tested 2,665 bopd and 400 bopd, respectively, of 25o API gravity crude oil, again over a two-week cased hole testing program in April. The Jurassic column in the Peshkabir-2 well is estimated to range between 125-160 meters.

The well’s Lower Shiranish Cretaceous zone has been placed on production since late May at an average rate of 4,500 bopd, trucked to Fish Khabur some 12 kilometers away and commingled with Tawke production for pipeline export through Turkey.

Tawke license production from the two fields has averaged 115,000 bopd month-to-date in July.

“With 16 consecutive monthly export payments from the Kurdistan Regional Government in line with contractual entitlements, we’ve ramped up drilling with three rigs currently active across the portfolio,” said Bijan Mossavar-Rahmani, DNO’s Executive Chairman. “We’re particularly pleased about prospects at Peshkabir,” he added.

The Company holds a 55 percent working interest in and operates the Tawke license; Genel Energy plc holds a 25 percent interest and the Kurdistan Regional Government the remaining 20 percent interest.

(Source: DNO)

By John Lee.

Norway’s DNO has reported receipt of $40.66 million from the Kurdistan Regional Government (KRG) as payment towards April 2017 crude oil deliveries to the export market from the Tawke license.

The funds, to be shared pro-rata by DNO and partner Genel Energy, include $34.10 million towards monthly deliveries and $6.56 million towards recovery of outstanding receivables.

Additionally Genel Energy announced that the Taq Taq field partners have received a gross payment of $13.38 million from the KRG for oil sales during April 2017; Genel’s net share of the payment is $7.36 million.

The payment reflects full settlement of the invoiced amount for April 2017 oil sales, and incorporates $12.09 million towards contractor monthly entitlement and $1.29 million towards recovery of historical receivables.

Gross oil sales from the Taq Taq field in April 2017 averaged 18,151 bopd, including both exports and Bazian refinery deliveries.

(Sources: DNO, Genel Energy)

DNO ASA, the Norwegian oil and gas operator, today reported receipt of USD 41.40 million from the Kurdistan Regional Government as payment towards February 2017 crude oil deliveries to the export market from the Tawke field.

The funds, to be shared pro-rata by DNO and partner Genel Energy plc, include USD 34.73 million toward monthly deliveries and USD 6.68 million toward recovery of outstanding receivables.

Tawke production in February averaged 110,803 barrels of oil per day (bopd), of which 110,641 bopd was delivered for export through Turkey.

(Source: DNO)

Shares in DNO ASA, the Norwegian oil and gas operator, were trading up 5 percent on Thursday morning after the company announced expanded investments, including doubling of planned 2017 wells at the Tawke field in the Kurdistan region of Iraq, on the back of strong first quarter results.

The Company reported quarterly net profit of USD 15 million, reversing a net loss of USD 31 million in the previous quarter. Revenues were up 83 percent to USD 77 million on operated production averaging 115,900 barrels of oil equivalent per day.

The expanded 2017 Tawke program includes eight new production wells, of which six are Cretaceous and two shallow Jeribe wells. A third drilling rig has been mobilized following receipt of regular payments for oil exports through Turkey. Year to date, the Company has been paid USD 122 million net, including USD 23 million towards DNO’s booked receivables for previous deliveries.

Elsewhere on the Tawke license, the Company produced an average of 3,000 barrels of oil per day from the Jurassic horizon of the recently drilled Peshkabir-2 well during a two-week test period in April. These volumes were trucked to DNO’s facilities at Fish Khabur and exported. Extended testing of the shallower Cretacous discovery in the Peshkabir-2 well has commenced. The Peshkabir-3 appraisal/production well will spud this summer.

The Company is preparing an accelerated development plan utilizing an early production facility to bring the Peshkabir field onstream by the end of this year.

In a separate release, the Company today announced a fast-track reentry into Norway with the acquisition of privately-held Origo Exploration Holding AS.

(Source: DNO)