Oslo, 20 April 2012 -- DNO International ASA, the Norwegian oil and gas company, announced today that it has signed an amended concession agreement with the Government of the Emirate of Ras Al Khaimah, RAK Gas LLC and Dahan Petroleum Ltd ("Dahan") granting Dahan exploration rights to certain outlying areas of the Saleh concession in exchange for Dahan covering the cost of DNO International's and RAK Gas' participation in such exploration program.
Dahan has 12 months to conduct a technical review of existing data and to acquire 3D seismic data, following which it can elect to drill, at its sole risk and expense, an exploratory well in the acreage surrounding, but not including, the Saleh field. The amended concession agreement provides that DNO International would have a 16 percent carried interest in such exploratory well. Dahan has the option to drill additional exploratory wells in the designated areas with DNO International retaining the option to continue its 16 percent carried interest on each such well or to participate instead at 40 percent on a paying basis.
The ownership participating interests and other fiscal and operating terms of the concession area containing the Saleh field remain unchanged, with DNO International holding 70 percent and RAK Gas the remaining 30 percent.
"We are pleased that Dahan is enthusiastic about the offshore potential of the Emirate of Ras Al Khaimah and will conduct an exploration programme designed to give us a fresh look at the area surrounding the Saleh field," said David Thorpe, General Manager of DNO Ras Al Khaimah. "If a discovery is made, we intend for it to be tied back to our existing platform and pipeline facilities, enhancing the commerciality of the planned Saleh redevelopment project," he added.
The Saleh field was first brought on stream in 1984, but following water encroachment and pressure decline in the Mishrif-Mauddud reservoir the field has been producing intermittently since 1996. The deeper Thamama reservoir, from which DNO International produces oil and gas in the nearby West Bukha field, remains largely untapped at Saleh. DNO International is completing technical studies and finalising plans to drill into the Saleh Thamama reservoir once a rig becomes available.
Dahan is a subsidiary of Lime Petroleum PLC, which in turn is majority owned by Rex Oil and Gas and Hibiscus Petroleum Berhad. The Lime Petroleum PLC group also has interests in the Sultanate of Oman, the Emirate of Sharjah and the Norwegian Continental Shelf. Dahan will operate the exploration activities until a commercial discovery is made, following which DNO International will take over as operator on behalf of the joint venture.
DNO International ASA is an Oslo-listed, Middle East and North Africa focused oil and gas company holding stakes in 17 licenses in various stages of exploration, development and production both onshore and offshore in the Kurdistan Region of Iraq, the Republic of Yemen, the Sultanate of Oman, the United Arab Emirates and the Tunisian Republic. http://www.dno.no
Oslo, 20 April 2012
DNO International ASA
Queries: Tom Bratlie (Tom.Bratlie@dno.no or tel: +47 905 21 904)