Oslo, 6 May 2015 - DNO ASA, the Norwegian oil and gas operator, today announced doubling of capacity at its flagship Tawke field in the Kurdistan region of Iraq to 200,000 barrels of oil per day (bopd).
The 200,000 bopd wellhead, processing and pipeline capacity milestone was reached in less than two years with 10 new horizontal wells and the construction of two early production facilities with combined capacity of 80,000 bopd and the installation of a new 44-kilometer, 24-inch pipeline.
Earlier in the week, the company hit a new Tawke daily production record of 156,379 barrels of oil and will ramp up output in the coming weeks by continuing to commission facilities and open wells. Discussions are underway with the Ministry of Natural Resources to set out future production levels, including the split between export deliveries and local sales.
"We are very proud of bringing the Tawke 200,000 project to completion and solidifying our position as the leading operator in Kurdistan," said Bijan Mossavar-Rahmani, DNO's Executive Chairman. "Higher Tawke production, including higher deliveries to Ceyhan, should help unlock payments to DNO," he said. "The timing and extent of export payments will drive new investment at Tawke which will be required to sustain the high production rates," Mr. Mossavar-Rahmani added.
Overall output from Tawke during the first quarter averaged 104,925 bopd, including 90,172 bopd delivered for export, 8,679 bopd sold into the local market and the balance used in the Tawke refinery. Recent contracts have raised local sales from Tawke to 20,000 bopd.
Weak local sales in Kurdistan in the first quarter and low oil prices led to reduced revenues of USD 26 million. Write-downs of USD 27 million in Yemen following suspension of production from the DNO-operated Block 32 and Block 43 due to a rapid deterioration in the country's security conditions contributed to an operating loss of USD 69 million in the quarter. The company ended the first quarter with USD 204 million in cash and USD 28 million in marketable securities.
DNO's gross production in the first quarter from Kurdistan, Yemen and Oman stood at 121,026 barrels of oil equivalent per day (boepd), of which company working interest production stood at 72,873 boepd.
Capital expenditures in 2015 have been reduced to a projected USD 100 million, of which USD 35 million was spent in the first quarter.
DNO will present its financial and operating results today in Oslo at 10:00 CET. A live webcast of the presentation as well as the full interim quarterly report will be available on the company website (www.dno.no).
DNO ASA is an Oslo-listed, Middle East and North Africa focused oil and gas company holding stakes in 19 blocks 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, the Tunisian Republic and Somaliland.
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.