DNO International Signs Gas Sales and Purchase Agreement for Summail Field
Oslo, 18 September 2013 -- DNO International ASA ("DNO International"), the Norwegian oil and gas company, announced today that it has signed a Gas Sales and Purchase Agreement with the Kurdistan Regional Government to supply gas from the Summail field in its Dohuk license in the Kurdistan region of Iraq. The gas will help displace diesel currently used to generate electricity in a 500 MW power plant in the city of Dohuk located 40 kilometers from the field.
Initial deliveries will be around 100 million cubic feet per day sold on a take-or-pay basis for the duration of the Production Sharing Contract or until deliveries reach one trillion cubic feet. The price of gas will range between $3 and $4 per thousand cubic feet over the life of the contract.
The Prime Minister of the Kurdistan Regional Government, Nechirvan Barzani, and the Minister of Natural Resources, Dr. Ashti Hawrami, were present at the signing ceremony held in Erbil today and are signatories to the contract.
"We are pleased to be the first to sign a commercial gas sales agreement with a state buyer in Kurdistan," said Bijan Mossavar-Rahmani, DNO International's Executive Chairman, who signed for DNO International. "Development of Summail is a win-win as we contribute to lowering fuel costs in local power generation while growing and diversifying the Company's production and revenue base," he added.
The next step in the fast-track development of the field is re-entry and completion of the Summail-1 discovery well and the installation of a 24 inch pipeline to transport gas to what is slated to become the regional gas gathering and distribution network. First gas from Summail-1 is planned in January 2014. The second well, Summail-2, will spud in the fourth quarter and the Summail-3 well is scheduled for 2014.
Following the development of the Summail field, the Company will shift its focus to appraisal of the oil potential of the Dohuk license.
DNO International holds a 40 percent interest in and operates the Dohuk license. Genel Energy plc holds a 40 percent interest and the Kurdistan Regional Government the remaining 20 percent interest.
--- DNO International 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, 18 September 2013
DNO International ASA
Queries: Bjorn Dale (email@example.com or tel: +47 909 79 889)
This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)