DNO's production in 2008 was 15,482 bopd, which was 482 bopd above the 2008 guided level of 15,000 bopd. The average realized oil price for the full year was 66 USD/bbl.
In Yemen, the Raoq #1 exploration well has encountered strong indications of hydrocarbons while drilling the Basement section. As a result of these observations an extensive test program will be carried out in the well.
DNO's WI production from Yemen in December was 7,778 down from 8,019 bopd in November. Fourth quarter WI production from Yemen was 8,210 bopd compared to 8,836 bopd in third quarter. Fourth quarter production was lower due to unscheduled maintenance work at the pipeline on block 32 in November, as well as required well workover operations.
The YTD production to DNO from Yemen is 9,330 bopd, which is above the guided level for the full year of 9,000 bopd.
DNO's oil production is reported as follows:
The production figures (WI and NE) include crude oil consumed in the operation of the Company's production s facilities, at an accumulated volume of 283 bopd during December 2008 and 329 bopd during fourth quarter.
DNO's revenue entitlement from the Tawke test production
The revenue entitlement from Tawke test production is reported as follows:
Due to temporary stop in production from Tawke in Q3, revenue entitlement in Q4 increased with 37 % compared to Q3 revenue entitlement. Achieved oil price in Kurdistan was at a constant level in 2008 despite significant oil price fluctuations in the market.
SUMMARY OF ONGOING DRILLING ACTIVITIES
Rig 905 spudded Tasour #25 development well 20 December 2008. The well was completed as a producer 12 January 2009, and brought on stream with an initial rate of 2,000 bopd.
Operations on rig 905 will be put on hold temporarily, awaiting preparations for the next wells in the drilling campaign to be completed. The next well is scheduled to be drilled on the Nabrajah field with estimated spud mid March 2009.
Exploration well Raoq #1 is being drilled with rig 919, and is exploring the resource potential on a separate Basement structure to the south of the Bayoot area.
The well has now reached TD in Basement, and logging has commenced. Strong indications of hydrocarbons have been encountered while drilling the Basement section. The forward plan is to complete the logging program and prepare for an extensive test of the well. If the test confirms commercial flow rates, the well is planned to be equipped with facilities for long term test production, including facilities for tanker trucking to nearby infrastructure.
As previously announced, KRG has authorized DNO to proceed with the remaining activities in preparation for export. These activities have been pursued by DNO in close cooperation with KRG and NOC, and the final tie-in construction work to the export pipelines is progressing well.
DNO International ASA
20 January, 2009