DNO’s working interest (WI) production in 2010 was 17,381 bopd compared with 12,285 bopd in 2009. The WI production from the Tawke field in the Kurdistan region of Iraq was 10,661 bopd in 2010. Deliveries from the Tawke field include both crude oil to the local market as well as to the Tawke refinery. In Yemen the WI production in 2010 was 6,720 bopd, an expected decline from 7,749 in 2009. A successful Godah-12 infill well improved production from the Godah field in Block 32 and the well Godah-11 is delivering gas to the gas-for-fuel project in the same block. The infill well Bayoot-10 (Block 53) contributed significantly to and increase in production from the Basement formation.
The partners in Block 47 in Yemen approved the first phase of the field development plan for the Yaalen discovery towards the end of 2010. DNO commenced the drilling of three exploration wells in three countries in the last quarter of 2010. Hydrocarbons were discovered in two of these wells.
DNO was in 2010 awarded exclusive rights to negotiate for substantial new exploration acreage in Mozambique and Yemen. In Yemen, a Memorandum of Understanding (MoU) for Block 48 was signed in October, and a first draft of a PSA has been received. The negotiations commenced in the first quarter of 2011. In Mozambique, DNO will in 2011 start negotiations for the Lower Zambesi block, located north of the Inhaminga block, in an unexplored area.
Operating revenues for 2010 were NOK 1,252 million, an increase of 44% from 2009, mainly due to higher production from the Tawke field and higher achieved oil prices in Yemen. Operating profit for 2010 was NOK 157 million and netback was NOK 380 million. Provisions for special items have affected the net result for 2010 negatively by NOK 525 million (NOK 330 million in arbitration costs and NOK 195 million in impairment of the investment in Det norske oljeselskap ASA), and the net loss for 2010 was NOK 283 million compared to a loss of NOK 270 million in 2009. Adjusted for these provisions the net profit for 2010 would have been NOK 242 million.
The Company has increased its cash position during 2010 by tight capital discipline, solid operations and proceeds from divestment of treasury shares. New equity was raised in November, where the gross proceeds were NOK 360 million. The cash position at year end 2010 was NOK 1,385 million.