DNO ASA - Update on the activities in Kurdistan

DNO is pleased to announce an update on the activities in Kurdistan:
  • An extended production test of Tawke # 5  delivered a maximum flow rate of 9,860 bopd
  • Tawke development wells are now being subject to extended production testing in preparation for permanent production as well as to gain reservoir data
  • Oil produced during extended flow testing is being collected in storage tanks
  • Pre-commissioning and final testing of the  first phase of the Tawke Early Production facilities is expected to commence shortly
  • First oil production from Tawke will commence less than 3 years since DNO was first awarded the license and less than 12 months since the company announced the Tawke discovery.
Tawke # 5:
Tawke # 5 was successfully drilled as an oil producer on the Tawke Field and is located some 1.1 km east of the Tawke # 4 well. After the well reached total depth, the well was completed as an oil producer and the drilling rig was released and moved to the Tawke # 6 location some 2.7 km south-west of Tawke # 5. Tawke # 5 was then production tested.
At the initial stage of the test, the well was tested for maximum flow capacity at a rate of  9,860 bopd. In order to obtain information about the reservoir characteristics of the Tawke field, an extended flow test at lower rates was then undertaken of the Tawke # 5 well. The well was flowed for several days and produced at a stable rate of approximately 4,500 bopd during two flow periods.
Three additional wells will now be started for clean-up and extended flow tests, with the same objectives as for Tawke # 5, and as part of the preparations for the oil to be processed by the permanent production and export facilities installed at the Tawke Field. The duration of the extended test campaign of the three wells is expected to last several weeks.
In line with good oilfield practises and with DNO's environmental policies, flaring of oil will be avoided during the extended testing. The oil is therefore collected in storage tanks.
Tawke # 6:
The Tawke # 6 was initially designed as a water injector. The well has now reached total depth, and production testing will be undertaken of the main Tawke producing reservoir. If movable oil at commercial rates is confirmed, the well will be completed as an oil producer.
If Tawke # 6 turns out as an oil well, then the oil/water contact has yet to be defined within the Tawke main producing reservoir. In this case a new well will be immediately drilled further down-dip from the Tawke # 6 location. If this well penetrates the water zone, it will be completed as a water injector.
Tawke # 3:
The Tawke # 3 is designed as an exploration / appraisal well at the eastern extension of the Tawke area. The well objectives are to penetrate both of the oil producing intervals confirmed at the main Tawke structure, as well as the deeper oil bearing intervals in Tawke # 1, which were not properly tested. The well is expected to reach total depth during the next two weeks.
In addition, a small carrier rig will soon arrive at the Tawke location and will be used for testing the deeper reservoir intervals of Tawke # 1.
The Central Processing Facilities (CPF) arrived at the Tawke area during February, and the installation and hook-up work as well as preparation for pre-commissioning and testing is well progressed.  
Installation of the pipeline connecting the Tawke oil production to the main northern pipeline is nearly completed. However, certain technical information and issues require further clarifications with the pipeline Operator, before the pipeline from Tawke can be permanently tied into the northern pipeline.
Tanks and trucking loading stations are also in the process of being installed both at the CPF as well as at the pipeline tie-in point. Pre-commissioning and final testing of the first phase of the Tawke Early Production facilities is expected to commence within a short period of time. This accomplishment is less than 3 years since DNO was first awarded the license and less than 12 months since the company announced the Tawke discovery.
Whilst finalising the Tawke facilities, the development wells drilled to date will be subject to extensive flow testing and reservoir pressure testing in order optimise future production. As reported above the oil produced during testing is collected in storage tanks.
Commenting on the results Managing Director Helge Eide says:
"We are very pleased with our achievement in Kurdistan to date. We made the Tawke oil discovery in our first exploration well, and delivering first oil production within less than one year from this discovery demonstrates our capability to undertake fast-track exploration and development
Completing the first stage of the Tawke Early production Development will mark a new important milestone to Kurdistan Regional Development and DNO."
29 March 2007
Notes to the Editors
DNO ASA is an independent exploration and production company with activities in Norway, Middle East and Africa.
The Company has P50 reserves and resources of 151mmboe and produces approximately 12,500  boe per day. The oil production to the Company is planned to be increased to approximately 26,000 bopd by year end.
DNO signed two production sharing agreements in the Kurdistan in June 2004. Since then the Company has completed seismic acquisition and interpretation, and in November 2005 spudded its first exploration well.  In June 2006, it was confirmed that a horizon on the Tawke structure  contained commercial volumes of , which is estimated at 100mm boe (55mmboe net to DNO) on P 50 basis. 2007 gross production from the Tawke field is estimated at an average annualized rate of 14,000 bbl/d
The Company plans to drill 18 development wells at Tawke in 2007 as part of the overall development plan for the Tawke field.
DNO is quoted on the Oslo Stock Exchange, ticker DNO, and is currently capitalised at
approximately NOK 10 billion.