By John Lee.

DNO ASA, the Norwegian oil and gas operator, today announced what it described as solid first half 2019 financial and operating results as the company continued to deliver the largest drilling program in its 48-year history:

H1 2019 revenue totalled USD 470 million, up 62 percent from the same period last year, while net profit doubled to USD 119 million.

“DNO’s Company Working Interest (CWI) production averaged 107,100 barrels of oil equivalent per day (boepd) in H1 2019, up 39 percent from H1 2018, reflecting strong contributions from its fields in the Kurdistan region of Iraq (89,300 barrels of oil per day or bopd) as well as from its recently acquired North Sea assets (17,800 boepd).

“In Kurdistan, H1 2019 gross production at the Tawke license containing the DNO-operated Tawke and Peshkabir fields (shared 75-25 with Genel Energy plc) averaged 126,700 bopd, up 20 percent from H1 2018. In H1 2019, Tawke contributed 71,700 bopd and Peshkabir 55,000 bopd.

“Some 36 wells are planned in 2019 of which 23 are development/infill wells and 13 exploration/appraisal wells. DNO projects full-year operational spend of USD 680 million, split evenly between its core areas in Kurdistan and the North Sea.

“In addition to 15 wells spud in the first half of the year across the portfolio, plans for the second half include 12 wells at Tawke and three at Peshkabir, now the second largest operated field by an international oil company in Kurdistan after Tawke. Also in Kurdistan, two wells have been drilled and completed in the DNO-operated Baeshiqa license with the deeper well to be tested beginning in August.

“Elsewhere, the Company continues to pursue an active North Sea strategy with plans to drill six more wells in the second half of the year in addition to the nine spud in the first half. Also, DNO was recently awarded as operator two new exploration licences in the United Kingdom.

“DNO exited the second quarter with a cash balance of USD 574 million in addition to USD 94 million in treasury shares and marketable securities.

(Source: DNO)

Stephen Whyte, Chairman of Genel Energy, gave the following update on the business at the Company’s Annual General Meeting, held in London on Thursday:

Genel had a very successful 2018, with free cash flow generation of $164 million even while making significant investment in growth.

2019 has seen us continue this success. We are delivering year-on-year production growth, we have made portfolio additions that perfectly complement our existing asset base, and our cash position continues to strengthen.

Genel is participating in 20 wells this year, the most of any IOC in the Kurdistan Region of Iraq (‘KRI’). Drilling on the Tawke and Peshkabir fields is ongoing, with activity ramping up as we progress through 2019. Year to date production from the Tawke PSC is currently c.126,800 bopd, with Peshkabir driving impressive growth compared to the prior year’s period.

The drilling programme at Taq Taq has now delivered three successful wells, and year to date production is currently c.13,300 bopd, an increase from the 2018 average of 12,350 bopd. We are continuing to achieve successful results from the flanks of the field, and are drilling ahead at pace.

Total Genel working interest production across all assets is 37,600 bopd, running slightly ahead of our expected 10% increase in year-on-year production.

Even as we invest to deliver this production increase we continue to improve our cash position, generating almost $50 million in free cash flow in the first four months of the year. We expect to keep up this impressive run rate. Our current expectation is that we will generate well over $100 million in free cash flow over the course of 2019, prior to the payment of the dividend, even after increasing expenditure on our growth opportunities.

The results at Peshkabir show the significant success that can be obtained from our low-cost, rapid return operations in the KRI. While investing to increase production from 12,000 bopd to 55,000 bopd over the course of the year, Genel still generated $50 million of free cash flow from the asset. This level of return is hard to match anywhere else in the world, and illustrates why we continue to look for further opportunities in the KRI.

Put simply, the KRI is a very good place in which to operate. Payments have been made on a monthly basis for over three and a half years now, the political situation continues to improve – with Baghdad having made budget payments to the Kurdistan Regional Government for over a year – and the low-cost of operations helping to set a breakeven oil price at an asset level of $20/bbl.

We are still looking to diversify the portfolio, but we will not ignore further opportunities in the KRI – and indeed continue to focus on these where our presence on the ground and regional expertise mean we can maximise their value potential for shareholders.

In that context, as you are probably aware by now, we were delighted to add Sarta and Qara Dagh to the portfolio. They tick all of the boxes, as we partner with Chevron on assets that offer a mixture of near-term production and long-term growth potential.

Sarta is expected to enter production in the middle of 2020, and we will develop the field utilising a similar strategy to the one that was so successful (and cash-generative) at Peshkabir. While we do not want to get ahead of ourselves there are hydrocarbons throughout the structure in all of the typical KRI reservoirs, from the Tertiary down to the Triassic.

We are focused on building an even stronger business with material growth potential, providing a clear and compelling investment case that offers the opportunity for a significant increase in shareholder value. As we prioritise that growth, we have also initiated a material and sustainable dividend, providing investors with a compelling mix of growth and returns.

I am delighted that Bill Higgs is now sitting alongside me as CEO, and that Esa Ikaheimonen, our CFO, has also joined the Board.

On a personal level, the transition that I was keen to oversee is now complete. As such I have decided that this will be my last AGM as Chairman of Genel, and I will leave the Company for new challenges once a suitable successor has been identified. When I joined the Board two years ago the share price was under 80p, production was declining, Genel had unpaid oil receivables of over $400 million and $142 million in net debt.

Genel’s production and net cash position is now rising, the portfolio is positioned to provide material organic growth, and Genel now has the right team to deliver that growth. Management has a wealth of experience in the sector, experience that can also be utilised to make further value-accretive portfolio additions and optimise our growing cash pile to generate value for shareholders.”

Genel will announce results for the six months ending 30 June 2019 on Tuesday 6 August 2019.

(Source: Genel Energy)

DNO, as operator of the Tawke field in Iraqi Kurdistan, has today issued an update on licence activity.

Gross production from the Tawke licence, containing the Tawke and Peshkabir fields, averaged 126,759 bopd during the first quarter of 2019.

Tawke production currently averages c.73,000 bopd, and Peshkabir c.54,000 bopd. There is an active 2019 drilling campaign underway at the Tawke and Peshkabir fields, with a total of up to four Peshkabir wells and up to 14 Tawke wells.

The Peshkabir-9 well was completed and placed on production during the first quarter. The Peshkabir-10 well was spud in February and will come onstream shortly. The Peshkabir-11 well will spud later this month. Peshkabir production averaged 53,830 bopd during the first quarter.

Peshkabir has now generated $1 billion in gross revenue, or four times the total spend to date.

At the Tawke field, the Tawke-52 Cretaceous well was completed and placed on production during the quarter. The Tawke-54 Cretaceous well was spud in February and came onstream in mid-April, and the Tawke-55 Cretaceous well spud in April. Tawke field production averaged 72,929 bopd during the first quarter.

(Source: Genel Energy)

DNO ASA, the Norwegian oil and gas operator, today reported USD 35 million in first quarter 2019 operating revenues from its newly acquired North Sea assets, bringing the total quarterly figure across the portfolio to USD 204 million.

The Company generated a net profit of USD 51 million and exited the quarter with a cash balance of USD 254 million plus USD 109 million in treasury shares and marketable securities.

Company Working Interest (CWI) production averaged 107,600 barrels of oil equivalent per day (boepd) during the first quarter, up 36 percent from 79,100 boepd in the first quarter of 2018. Kurdistan contributed 89,400 barrels of oil per day (bopd) and the North Sea contributed 18,200 boepd.

Operated Kurdistan production from the Tawke and Peshkabir fields averaged 126,800 bopd during the quarter, up from 109,400 in the first quarter of 2018.

The Company plans to more than double capital and exploration expenditures to USD 440 million this year, up from USD 200 million last year. Planned 2019 expenditure in Kurdistan is USD 250 million and USD 190 million in the North Sea.

DNO has launched an active drilling program of up to 36 wells across the portfolio, representing the highest number of wells in the Company’s 48-year history.

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

“With our recent acquisition, DNO has transformed into a more balanced company. We continue to generate significant cash from ultra-low cost, short-cycle, highly prolific fields in Kurdistan but now with a strong, second leg in the North Sea.”

(Source: DNO)

Shares in DNO ASA, the Norwegian oil and gas operator, were trading up five percent on Monday afternoon following the company’s announcemnt that it has replaced 2018 production through additions to reserves, marking the second consecutive year in which the Company’s replacement of proven reserves reached or exceeded 100 percent of production.

“DNO’s stellar record of reserves replacement through the drill bit is a result of stepped up spending on our portfolio of quality assets coupled with rapid-fire execution,” said Bijan Mossavar-Rahmani, DNO’s Executive Chairman. “And the barrels we continue to add are among the lowest cost in the industry, anywhere,” he expounded.

Yearend 2018 Company Working Interest (CWI) proven (1P) reserves stood at 240 million barrels of oil (MMbbls), unchanged from yearend 2017 after adjusting for production and technical revisions. On a CWI proven and probable (2P) reserves basis, DNO replaced 98 percent of its 2018 production, exiting the year with CWI 2P reserves of 376 MMbbls (384 MMbbls in 2017).

At 2018 production rates, DNO’s 1P reserves life is 8.2 years and its 2P reserves life is 12.9 years.

Significantly, the Company’s 1P reserves replacement ratio (RRR) has reached or exceeded 100 percent in eight of the past ten years.

On a gross basis, at the Tawke license in the Kurdistan region of Iraq containing the Tawke and Peshkabir fields, yearend 2018 1P reserves stood at 348 MMbbls, unchanged from 2017 after adjusting for production of 41 MMbbls and upward technical revisions of 41 MMbbls. Tawke license 2P reserves stood at 502 MMbbls (513 MMbbls in 2017) and proven, probable and possible (3P) reserves at 697 MMbbls (880 MMbbls in 2017).

Broken down by field, Tawke field gross 1P reserves stood at 294 MMbbls (335 MMbbls in 2017), 2P reserves at 376 MMbbls (438 MMbbls in 2017) and 3P reserves at 477 MMbbls (588 MMbbls in 2017). Peshkabir field gross 1P reserves stood 54 MMbbls (13 MMbbls in 2017), 2P reserves at 126 MMbbls (75 MMbbls in 2017) and 3P reserves at 220 MMbbls (292 MMbbls in 2017).

International petroleum consultants DeGolyer and MacNaughton carried out the annual independent assessment of the Tawke license. The Company internally assessed the remaining licenses in its portfolio.

The 2018 Annual Statement of Reserves and Resources, prepared and published in accordance with Oslo Stock Exchange listing and disclosure requirements (Circular No. 1/2013), is attached and is also available on the Company’s website at www.dno.no.

(Sources: DNO, Yahoo!)

DNO ASA, the Norwegian oil and gas operator, today announced 2018 net profit of USD 354 million on revenues of USD 829 million, the highest annual revenues in the Company’s 47-year history. Cash flow from operations increased 40 percent to USD 472 million in 2018, of which USD 334 million represented free cash flow.

Operated production averaged 117,600 barrels of oil equivalent per day (boepd) including 81,700 boepd on a Company Working Interest (CWI) basis, up from 113,500 boepd and 73,700 boepd, respectively, during 2017. January 2019 operated production averaged 128,000 barrels of oil per day (bopd) or 90,000 bopd on a CWI basis.

The Company stepped up its operational spend in 2018 to nearly USD 300 million to support the fast-track development of the Peshkabir field in the Kurdistan region of Iraq and the ongoing drilling program at the Tawke field within the same license.

Spending levels in 2019 are projected to rise more than 40 percent from 2018 levels to an estimated USD 420 million. DNO’s 2019 drilling program includes up to 20 exploration and production wells in Kurdistan, including up to 14 wells at the Tawke field, four at Peshkabir and two at the Baeshiqa license. Another five wells are planned in Norway on DNO’s licenses.

In Kurdistan, two recently completed wells, Peshkabir-9 and Tawke-52, will be placed on production in February. Testing of the first Baeshiqa exploration well targeting the Cretaceous reservoir has been delayed by extensive rainfall but is also expected to commence this month.

Already the leading international oil company in Kurdistan, with a 75 percent operating interest in fields contributing a third of the region’s total exports, the Company is now firmly establishing itself in Norway as it completes the takeover of Faroe Petroleum plc. With 90 licenses, of which 22 are operated, DNO will leapfrog to the ranks of the top five companies in total licenses held in Norway.

“The Faroe transaction transforms DNO into a more diversified company with a strong, second leg,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani. “This represents not a pivot away from Kurdistan but a pivot to Norway,” he added. “We are now well positioned in two areas in which we have a comparative, even competitive, advantage.”

The combination places DNO among the top three European-listed independent oil and gas companies in production and reserves.

DNO has acquired more than 96 percent of Faroe shares and initiated the compulsory acquisition of the remaining shares. The integration of the Faroe and DNO organizations is well underway; the new combined entity has over 1,100 employees and offices in Oslo, Stavanger, Erbil, Dubai, London, Aberdeen and Great Yarmouth.

The Company will release pro-forma financials and 2019 investment programs and budgets for the combined entity in February and March.

Separately, DNO’s Board of Directors have approved a dividend payment of NOK 0.20 per share to be made on or about 27 March 2019 to all shareholders of record as of 18 March 2019. DNO shares will be traded ex-dividend as of 15 March 2019.

(Source: DNO)

Tawke Licence:

The Kurdistan Regional Government notes the updates by DNO and Genel Energy on November 1st regarding production increases under the Tawke Production Sharing Contract (PSC).

The KRG is pleased with the efforts of the Tawke PSC Contractors in the Peshkabir area of the Tawke PSC Licence, where production has risen to over 50,000 barrels per day (bpd) within 18 months, exceeding expectations.

The recent boost in production at the Peshkabir area has more than compensated for the natural decline of the main Tawke field area, where production is now down to about 80,000 bpd, from 109,000 bpd in July 2017. Overall production under the Tawke PSC Licence reached 126,000 during October, compared to 114,000 bpd in July 2017. The current average is around 130,000 bpd (click here to view the chart).

Pipeline Upgrades:

The KRG has also recently completed an upgrade of its export pipeline by installing another pumping station at Shaikhan, which boosts capacity of the pipeline from 700,000 bpd to 1 million bpd. This extra capacity will accommodate future production growth from KRG producing fields, and can also be used by the federal government to export the currently stranded oil in Kirkuk and surrounding areas.

Oil Export:

The KRG currently exports over 400,000 bpd of crude oil. The KRG’s policy of maintaining consistent and timely payments to its producing oil companies has led to more investment in its oil fields, stabilising production levels and paving the way for further production increases during 2019.

These export achievements generate more revenues that will help to reduce the KRG’s overall debts and aid the economic revival and sustainability of the Kurdistan Region. The KRG’s policy of supporting its producers provides further evidence that Kurdistan’s PSCs are a win-win for investors and the citizens of the Kurdistan Region.

(Source: KRG)

DNO ASA, the Norwegian oil and gas operator, today announced a rise in third quarter 2018 net profit to USD 63 million from operating revenue of USD 171 million on the back of solid production, regular export payments and higher oil prices.

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 totaling USD 164 million net to its 75 percent operated interest in the Tawke license in the Kurdistan region of Iraq. Realized export prices averaged USD 61 per barrel during the quarter.

Net profit for the three months ending September was ahead of the USD 93 million net loss in the same period last year, excluding the one-time recognition of its Kurdistan Settlement Agreement in August 2017, and above the USD 43 million in the second quarter this year. Operating revenue was up from USD 73 million in the third quarter a year earlier and USD 147 million in the preceding quarter in 2018.

Notwithstanding third quarter spend of USD 71 million, DNO maintained its strong financial position with free cash balances of USD 640 million. In addition, the Company held USD 335 million in marketable securities as at 30 September, including a 28.22 percent stake in London-listed Faroe Petroleum plc, a 5.64 percent stake in Oslo-listed Panoro Energy ASA, a 4.83 percent stake in Olso-listed RAK Petroleum plc and a 3.23 percent stake in DNO held through treasury shares.

Going into the fourth quarter, on the Tawke license in Kurdistan containing the Tawke and Peshkabir fields the Company has ramped up 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.

“Peshkabir is on steroids,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani. “Production continues to climb and we are proud of our operating teams who set stretch targets and then proceed to beat them,” he added. “With the fast-track, low-cost development of Peshkabir, DNO continues to tease out Kurdistan’s promise as a world class oil province,” Mr. Mossavar-Rahmani said.

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 license. 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 utilizing underbalanced technology, the first on the license, 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 license. The Company will participate in at least five additional wells offshore Norway next year.

The Company currently holds 21 Norway licenses, including the 20 percent interest in a Barents Sea license recently acquired from Chevron containing the Korpfjell prospect.

The Company has received ten monthly Kurdistan export payments year-to-date totaling USD 500 million net to DNO, of which USD 59 million was received in October. This compares to USD 380 million received net to DNO during the full-year 2017.

DNO 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.

(Source: DNO)

DNO ASA, the Norwegian oil and gas operator, today announced a rise in third quarter 2018 net profit to USD 63 million from operating revenue of USD 171 million on the back of solid production, regular export payments and higher oil prices.

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 totaling USD 164 million net to its 75 percent operated interest in the Tawke license in the Kurdistan region of Iraq. Realized export prices averaged USD 61 per barrel during the quarter.

Net profit for the three months ending September was ahead of the USD 93 million net loss in the same period last year, excluding the one-time recognition of its Kurdistan Settlement Agreement in August 2017, and above the USD 43 million in the second quarter this year. Operating revenue was up from USD 73 million in the third quarter a year earlier and USD 147 million in the preceding quarter in 2018.

Notwithstanding third quarter spend of USD 71 million, DNO maintained its strong financial position with free cash balances of USD 640 million. In addition, the Company held USD 335 million in marketable securities as at 30 September, including a 28.22 percent stake in London-listed Faroe Petroleum plc, a 5.64 percent stake in Oslo-listed Panoro Energy ASA, a 4.83 percent stake in Olso-listed RAK Petroleum plc and a 3.23 percent stake in DNO held through treasury shares.

Going into the fourth quarter, on the Tawke license in Kurdistan containing the Tawke and Peshkabir fields the Company has ramped up 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.

“Peshkabir is on steroids,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani. “Production continues to climb and we are proud of our operating teams who set stretch targets and then proceed to beat them,” he added. “With the fast-track, low-cost development of Peshkabir, DNO continues to tease out Kurdistan’s promise as a world class oil province,” Mr. Mossavar-Rahmani said.

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 license. 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 utilizing underbalanced technology, the first on the license, 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 license. The Company will participate in at least five additional wells offshore Norway next year.

The Company currently holds 21 Norway licenses, including the 20 percent interest in a Barents Sea license recently acquired from Chevron containing the Korpfjell prospect.

The Company has received ten monthly Kurdistan export payments year-to-date totaling USD 500 million net to DNO, of which USD 59 million was received in October. This compares to USD 380 million received net to DNO during the full-year 2017.

DNO 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.

(Source: DNO)

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)