DNO ASA, the Norwegian oil and gas operator, today announced production at the Peshkabir field in the Kurdistan region of Iraq has ramped up to 50,000 barrels of oil per day (bopd), meeting the end-2018 target ahead of schedule and below budget.

One of two recently completed wells, Peshkabir-7, is producing over 10,000 bopd from nine Cretaceous zones through temporary test facilities and exported. The other, Peshkabir-6, drilled as a production well, but with the additional objective of appraising deeper formations, has established a deeper Cretaceous oil/water contact level than previously estimated. Further testing is underway, including test production of multiple producing zones.

The Peshkabir-8 well, spud in late August, is drilling ahead at 2,325 meters. Once completed, the rig will move to spud Peshkabir-9 in November.

Four other wells at Peshkabir now produce at a combined rate of close to 40,000 bopd following a workover at Peshkabir-3 which boosted production from that well to 11,000 bopd from 8,000 bopd.

Peshkabir production is processed through temporary test facilities until commissioning of a central processing facility with a capacity of up to 50,000 bopd by end-2018. The Company is also installing a 10-inch pipeline from Peshkabir to Fish Khabur with a capacity of 60,000 bopd. Field production is currently transported to Fish Khabur by tanker truck and a 6-inch pipeline.

At the Company’s flagship Tawke field, the Tawke-50 shallow Jeribe well drilled to a depth of 320 meters will be brought on production within several days. The Tawke-49 Cretaceous well is drilling ahead at 2,245 meters and will be completed later this month. Two additional Tawke wells, one each in the Jeribe and the Cretaceous, will be drilled by the end of the year. Workovers are also underway at two wells. Tawke production currently stands at just over 80,000 bopd.

Elsewhere in Kurdistan, the Company is about to spud its first well at the Baeshiqa license. Baeshiqa contains two undrilled structures with multiple target reservoirs in the Cretaceous, Jurassic and Triassic. The first well will target the Cretaceous and will be followed by a back-to-back well to test the deeper Jurassic and Triassic on the same structure. A third well to test the Jurassic and Triassic on a separate structure will be drilled in 2019.

“We are all in on our Kurdistan operations and delivering,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani (pictured). “Peshkabir continues to exceed expectations and we are eager to probe the promising potential at Baeshiqa,” he added.

In Norway, the Company will participate in two exploration wells to be spud in 2018. DNO currently holds 21 licenses in the country and plans an additional five exploration wells next year. The Company’s growing Norway portfolio is complemented by a 28.22 percent shareholding in UK-listed Faroe Petroleum plc.

“With USD 1 billion in financial assets, including more than USD 600 million in cash and the balance in marketable securities and treasury shares, we are well-positioned to grow our footprint in Kurdistan and Norway with the drill bit and the acquisition of producing assets,” said Mr. Mossavar-Rahmani.

(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)

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)

DNO ASA, the Norwegian oil and gas operator, today released its 2015 Annual Report and Accounts together with its 2015 Annual Statement of Reserves.

The company reported record levels of operated production in 2015, driven by strong performance in the Kurdistan region of Iraq, though the company’s financial results were impacted by the sharp drop in world oil prices and lower payments for exports in Kurdistan.

Operated production was up 23 percent to 144,500 barrels of oil equivalent per day (boepd) while revenues dropped to USD 187 million in 2015, down 59 percent from a year earlier. Gross production from DNO’s flagship Tawke field in Kurdistan averaged 135,200 barrels of oil per day (bopd), of which 114,100 bopd was delivered for pipeline export through Turkey.

Capital expenditures in 2015 were reduced to USD 51 million from USD 297 million in 2014. The company reported a 2015 operating loss of USD 174 million (operating loss of USD 243 million in 2014) on the back of lower revenues, restructuring and impairment charges. DNO ended the year with a cash balance of USD 238 million, up from USD 114 million at end-2014.

With a strong balance sheet, major development projects already completed and the flexibility to align our spending with our earning, we are well-positioned among our peer group,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani. “We are cautiously optimistic oil prices will recover in the coming months but remain stubbornly resilient if they don’t,” he added.

DNO’s year-end 2015 Reserve Life Index (R/P) stood at 12.2 years on a proven and probable (2P) reserves basis and 16.3 years on a 2P reserves and 2C contingent resources basis.

New investments at Tawke were significantly curtailed in 2015 due to irregular payments in Kurdistan. Notwithstanding, Tawke gross proven (1P) oil reserves increased to 387.0 million barrels (MMbbls) from 319.9 MMbbls at year-end 2014 with improved confidence about primary recovery rates at the field.

At Tawke, gross 2P reserves and 2C contingent resources stood at 643.2 MMbbls, down from 698.0 MMbbls at year-end 2014. Gross 2P reserves dropped to 543.0 MMbbls from 680.3 MMbbls after adjusting for a record 49.3 MMbbls produced during the year, technical revisions of 5.5 MMbbls and a re-categorization of 82.5 MMbbls from 2P reserves to 2C contingent resources pending both a review of enhanced recovery options at Tawke and a decision to commit funds towards a field-wide redevelopment program.

A new payment arrangement announced on 1 February 2016 by the Kurdistan Regional Government in line with contractual entitlements has set the foundation for higher spending at Tawke. Investments already launched include new production wells, remedial work at existing wells and installation of water handling facilities. Previous Tawke production guidance remains unchanged with output expected to climb 10 percent by mid-year from January 2016 levels.

The company also plans to drill the Peshkabir-2 well to appraise the previous Jurassic discovery and explore the Cretaceous zone. If successful, the Peshkabir field can be quickly tied back to existing infrastructure at Fish Khabur only 10 kilometers away.

We have long taken a diligent, transparent and prudent tack with Tawke and are pleased it continues to rank first in reserves, production and exports among fields operated by international oil companies in Kurdistan,” said Mossavar-Rahmani.

As of 31 December 2015, DNO’s Company Working Interest (CWI) 2P reserves and 2C contingent resources were estimated at 523.1 million barrels of oil equivalent (MMboe), down from 590.3 MMboe at year-end 2014. CWI 2P reserves were estimated at 391.5 MMboe, down from 483.6 MMboe at year-end 2014 after adjusting for CWI production of 32.3 MMboe during the year, technical revisions of 5.9 MMboe and a re-categorization of 53.9 MMboe from CWI 2P reserves to CWI 2C contingent resources. CWI 2C contingent resources were estimated at 131.6 MMboe, up from 106.7 MMboe at year-end 2014.

International petroleum consultants DeGolyer and MacNaughton carried out the annual independent assessment of the Tawke field. The company internally evaluated the remaining assets.

The 2015 Annual Report and Accounts and the 2015 Annual Statement of Reserves, prepared in accordance with Oslo Stock Exchange listing and disclosure requirements (Circular No. 1/2013) utilizing the Norwegian Petroleum Directorate classification system, are attached and also available on the company’s website www.dno.no.

(Source: DNO)

DNO ASA, the Norwegian oil and gas operator, today reported record oil and gas output in 2015 though the company’s results were impacted by the sharp drop in world oil prices.

Operated production was up 23 percent last year to 144,200 barrels of oil equivalent per day while revenues dropped to USD 187 million in 2015, down 59 percent from 2014.

Releasing its preliminary 2015 fourth quarter and annual results, the company announced plans to resume investments at its flagship Tawke field in the Kurdistan Region of Iraq, following five consecutive monthly payments for oil exports and a new payment arrangement tied to its contractual entitlements.

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

“As much of the industry continues to hunker down, DNO’s foot is coming off the brake and pressing on the accelerator.

“The export payment arrangement just put in place provides regularity, predictability and transparency, thereby laying the foundation for stepped up investments in Kurdistan.”

New investments at Tawke are expected to reverse natural field decline and boost output by at least 10 percent by mid-year, with further output increases to follow as additional investments are made. The company also plans to drill the Peshkabir-2 appraisal well this year. If successful, DNO plans to quickly tie back the Peshkabir field to existing infrastructure at Fish Khabur only 10 kilometers away.

Mr. Mossavar-Rahmani added:

“DNO has already pulled away from the pack in Kurdistan in terms of production and exports, currently contributing nearly 60 percent of export volumes by the international oil companies.

“In addition to the scale and attractive economics of DNO’s oil reserves — unrivaled among our peer group — we have balance sheet strength to weather the oil price storm and will emerge from this crisis stronger and more profitable … We are stubbornly resilient.”

The company reported a 2015 operating loss of USD 174 million (operating loss of USD 243 million in 2014) on the back of lower revenues, restructuring and impairment charges. DNO ended the year with a cash balance of USD 238 million, up from USD 114 million in 2014.

(Source: DNO)

By John Lee.

In a market update this morning, Norwegian oil and gas operator DNO said it is logging the 834 meter horizontal section of the recently drilled Tawke-28 well and plans to place the well on production by early November. The next horizontal well in the field development program, Tawke-27, will spud shortly thereafter.

Elsewhere in Kurdistan, the Benenan-4 well has indicated higher volumes of oil in place in the Erbil license with movable Najmeh oil tested deeper than in previously drilled Benenan field wells. Further testing and evaluation are underway.

On the Dohuk license, DNO continues to re-assess the Summail field development plan in light of sharply declining gas production from the first two wells, one of which is now shut-in. A recently completed third well targeting deep gas did not encounter significant volumes of gas but instead discovered a 200 meter oil column in the Cretaceous interval by testing oil in the well’s three deepest zones. The Summail-1 well had earlier confirmed the presence of heavy oil in the Jurassic interval.

The company has taken steps to mitigate delays to its Tawke 200,000 barrel per day deliverability target resulting from the withdrawal of third party contractors from Kurdistan during the past few months. Installation of the new 24 inch pipeline connecting the Tawke field to Fish Khabur is proceeding and slated for completion by yearend. The new pipeline will increase export capacity and provide transportation system redundancy. Other upgrades to infrastructure and facilities to increase production and processing capacity at the Tawke field are progressing as planned.

Meanwhile, exports of Tawke oil to Turkey by the Kurdistan Regional Government for its own account currently average approximately 90,000 barrels per day. Local sales decreased to 29,960 barrels per day during the third quarter and currently average approximately 20,000 barrels per day.

(Source: DNO)