RAK Petroleum plc holds 44.94 percent of DNO ASA through a subsidiary.
DNO is a Norwegian oil and gas operator focused on the Middle East and North Sea regions. Founded in 1971 and listed on the Oslo Børs, DNO holds stakes in onshore and offshore licences at various stages of exploration, development and production in the Kurdistan region of Iraq (“Kurdistan”), Norway, the United Kingdom, Ireland, the Netherlands and Yemen.
DNO’s growth comes through smart exploration, cost effective and fast track development, efficient operating techniques and strategic acquisitions.
During the first half of 2021, DNO returned to profitability following four consecutive quarters of losses in 2020 triggered by market perturbations from the COVID pandemic, reporting operating profit of USD 127.3 million for the half-year to 30 June 2021 compared to an operating loss of USD 92.3 million in the same period a year earlier. DNO’s revenues of USD 354.1 million for the half-year 2021 (of which USD 264.6 million were from Kurdistan and USD 89.6 million from the North Sea) were up 22 percent from the same period a year earlier.
The turnaround was driven by solid production, higher oil prices and regularisation of payments from Kurdistan.
DNO exited the half-year with a cash balance of USD 454.2 million; partial bond redemptions brought its net interest-bearing debt to USD 396.2 million at midyear, the lowest level since year-end 2018.
DNO held interests in 91 licences across its portfolio at 30 June 2021 (25 operated), of which two are in Kurdistan, 74 in Norway, 11 in the United Kingdom, two in the Netherlands, one in Ireland and one in Yemen.
In Kurdistan, DNO maintains its position as the largest oil producer among the international oil companies, with gross operated production from the Tawke licence containing the Tawke and Peshkabir fields averaging 111,140 barrels of oil per day (“bopd”) in the first half of 2021, of which 83,355 bopd was net to DNO’s interest.
Five new wells are scheduled at Peshkabir in 2021 in addition to workovers and interventions of existing wells.
DNO’s Peshkabir-to-Tawke gas capture and reinjection project was further expanded with a fifth injector well, lifting daily average reinjection to 20 million cubic feet of gas from the Peshkabir field, supporting oil recovery at Tawke while reducing CO2 emissions from flaring and partially offsetting natural Tawke field decline.
On 3 August 2021, DNO announced that the Kurdistan Regional Government had approved DNO’s acquisition of ExxonMobil’s remaining 32 percent interest in the Baeshiqa licence, doubling DNO’s stake. In parallel, commerciality has been declared on the licence with plans submitted for fast-track development including early production from previously drilled but suspended wells.
Following the transaction, the joint venture comprises DNO as operator with a 64 percent (80 percent paying) interest, the Turkish Energy Company with a 16 percent (20 percent paying) interest and the KRG with a 20 percent carried interest.
The previously drilled wells include Baeshiqa-2, a 3,204 meters discovery well, that tested hydrocarbons to surface from multiple stacked Jurassic and Triassic zones. Two zones flowed naturally at rates averaging over 3,000 barrels of oil per day (bopd) of light gravity oil each and another averaged over 1,000 bopd also of light gravity oil. DNO also drilled Zartik-1, the second discovery well, 16 kilometers to the southeast of Baeshiqa-2, to a depth of 3,021 meters. This well tested hydrocarbons to surface from several Jurassic zones, with one zone flowing naturally at rates averaging 2,000 bopd of medium gravity oil.
DNO’s North Sea assets (with production across 11 fields, of which eight are in Norway and three in the United Kingdom) contributed 12,542 barrels of oil equivalent per day (“boepd”) net to DNO.
DNO maintains an active drilling program in the North Sea in 2021, including two appraisal wells on previous discoveries and three exploration wells, the first of which has been drilled leading to a 2021 discovery. In addition, four Fenja development wells are planned this year and six infill wells at Ula, Oda, Tambar and Brage. The 2020 Bergknapp discovery is undergoing drill stem testing and sidetracking.
The DNO-operated Brasse field development has recently made a concept selection with Oseberg as the preferred host. With total field reserves of 35 MMboe and a relatively modest topside construction scope on Oseberg, the subsea development has robust project economics based on a 2022 project sanction target.
DNO continues to evaluate Iris/Hades, Alve Gjøk, Orion/Syrah and Trym South discoveries for project sanction in 2022.
RAK Petroleum plc’s Executive Chairman, Bijan Mossavar-Rahmani, is also Executive Chairman of the Board of Directors of DNO ASA.
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