Oslo, 13 November 2014 - DNO ASA, the Norwegian oil and gas operator, today reported third quarter 2014 gross production of 124,396 barrels of oil equivalent per day (boepd) on the strength of uninterrupted operations at its flagship Tawke field in the Kurdistan region of Iraq.
Increasing volumes of Tawke oil were directed from local sales to exports through Ceyhan, Turkey during the quarter by the Kurdistan Regional Government which announced last Friday that a payment of USD 75 million would be made to the producing companies towards their share of exports.
The statement also indicated that other payments would follow the November payment on a regular basis, and that with further production increases, producers would receive their full contractual entitlements.
"We are of course very pleased that increasing exports, importantly from Tawke, are enabling Kurdistan to meet its financial needs at a very difficult time and to begin to allocate to DNO and other producers our contractual share of export revenues," said Bijan Mossavar-Rahmani, DNO's Executive Chairman. "DNO is fully committed to Kurdistan and will continue to reinvest revenues from exports to develop our extensive asset base in the country."
The reduction in local Kurdistan sales contributed to a drop in third quarter operating cash flow to USD 25 million. The company recorded an operating loss of USD 41.6 million on third quarter operating revenue of USD 115.7 million following a one-off charge for impairments as it continues to cut costs and high grade its portfolio. Absent this charge, operating profit would have totaled USD 3.8 million during the quarter. Year-to-date operating profit is USD 43.6 million. DNO ended the quarter with cash balances of USD 165.7 million, excluding USD 97.0 million held in treasury shares and shares of RAK Petroleum plc.
Drilling of additional wells continued without interruption during the quarter at Tawke and a stabilizing security environment allowed resumption of field expansion program, though with some delay. Costs related to Tawke development totaled USD 41.7 million in the third quarter.
Elsewhere, in Oman, the acquisition of a 1,000-kilometer 2D seismic program on Block 36 was completed on schedule with the first exploration well planned in 2015.
In Tunisia, the Jawhara-3 exploration spudded in mid-October and has drilled to an intermediate casing depth of 2,340 meters, encountering a secondary Eocene target with indications of hydrocarbons. This intermediate section has been logged and cased and drilling operations will resume to test three deeper secondary and primary targets in the Cretaceous and Turonian. The well is the first of several exploration and appraisal wells planned in the offshore Sfax permit.
DNO will present its financial and operating results today in Oslo at 10:00 CET (09:00 GMT). A live webcast of the presentation as well as the full third quarter 2014 interim 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 20 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 ---
Oslo, 13 November 2014
Queries: Bjorn Dale (e-mail: [email protected] or phone: +47 911 57 197)
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.