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.
The company's growth comes through smart exploration, cost effective and fast track development, efficient operating techniques and strategic acquisitions.
The impact of the world-wide novel coronavirus (“Covid-19”) pandemic resulted in reduced activity, expenditure and production for DNO in 2020 as DNO reacted swiftly and thoughtfully to protect its cash position and liquidity following the collapse in world oil prices in March 2020. A delay in receipt of entitlement payments from the Kurdistan Regional Government (“KRG”) for November 2019 to February 2020 (USD 212 million) and override payments from November 2019 through December 2020 (USD 47 million) also contributed to DNO’s reduced activity levels in Kurdistan during 2020. In December 2020, a plan was put in place by the KRG in respect of the Tawke licence 2019 and 2020 withheld entitlement and override payments (USD 259 million DNO share) such that if Brent prices exceed USD 50 per barrel on average in any month, one half of the incremental revenue will be paid to the Tawke licence partners and shared prorata to their interests in the licence by the KRG towards withheld amounts.
Despite the challenges in 2020, DNO reported gross operated production of 110,282 barrels of oil equivalent per day (“boepd”) for the year. DNO maintains its position as the largest oil producer among the international oil companies in Kurdistan where it continues to produce what are among the lowest cost oil barrels in the industry, anywhere, in terms of finding, development and lifting costs. On a Company Working Interest (“CWI”) basis, DNO's production in 2020 averaged 95,101 boepd.
While DNO was one of the first oil companies to hit the brakes on spending in early 2020, DNO was also one of the first oil companies to press down on the accelerator. Encouraged by higher oil prices, more visibility on Kurdistan export payments and temporary Norwegian petroleum tax incentives, DNO also plans to ramp up its operational spend by 37 percent to USD 700 million in 2021.
In June 2020, DNO fast-tracked a Tawke licence well intervention campaign to ramp up production following stabilisation of oil prices and resumption of Kurdistan export payments. Also in June 2020, DNO commissioned the Peshkabir-to-Tawke gas reinjection project (the first enhanced oil recovery project in Kurdistan) to unlock additional oil reserves at Tawke while significantly reducing associated gas flaring and CO2 emissions at the Peshkabir field. In the second half of 2020, DNO captured, piped and reinjected 2.4 billion cubic feet of Peshkabir field gas which otherwise would have been flared, into the Tawke field for pressure maintenance leading to an estimated 200,000 barrels of incremental oil recovery in 2020.
In July 2020, DNO completed drilling of the Zartik-1 well, the third exploration well on the Baeshiqa licence, on the Zartik structure approximately 15 kilometres southeast of the Baeshiqa-2 discovery well. The well tested hydrocarbons at surface from several Jurassic zones, with one zone flowing naturally at rates averaging over 2,000 barrels of oil per day of medium gravity oil.
At the Baeshiqa structure and following a discovery in 2019, testing and appraisal of the Baeshiqa-2 exploration well was concluded in 2020. The well tested hydrocarbons to surface from multiple Jurassic and Triassic zones. DNO is working with partners to achieve fast-track development and early production from existing wells, subject to government approvals, expected by mid 2021. DNO has already demonstrated proof of concept of producing through temporary test facilities, having delivered 15,000 barrels of 40° API oil and 20° API oil for export from the Baeshiqa-2 and Zartik-1 wells, respectively.
In the North Sea, CWI production averaged 17,352 boepd in 2020. DNO has production across 11 fields, of which eight are in Norway and three in the United Kingdom (“UK”), with Norway and the UK now accounting for approximately 20 percent of DNO's overall production and reserves.
Temporary Norwegian petroleum tax incentives announced on 19 June 2020 by the Norwegian Parliament are driving stepped-up investment plans in the Norwegian Continental Shelf. DNO is moving toward concept select for the Brasse field, actively evaluating the Iris/Hades, Røver Njord, Alve Gjøk, Orion/Syrah and Trym South discoveries for project sanction in 2022 and accelerating infill drilling at the Ula, Tambar and Brage producing fields in 2021.
Across DNO’s North Sea portfolio, 12 wells were spud in 2020, including five exploration wells and seven development wells, all in Norway. Four wells were permanently plugged and abandoned in the UK. The appraisal of the Bergknapp discovery, among Norway’s largest discoveries in 2020, is scheduled for the second quarter of 2021. Røver Nord, which was the last exploration well spud in 2020, but drilled to target in early 2021, also yielded a significant and likely commercial discovery.
DNO reported revenues of USD 614.9 million for 2020 (of which USD 369.1 million were from Kurdistan and USD 245.8 million from the North Sea) down a third from the same period a year earlier, primarily due to the oil price collapse in March 2020. DNO reported a net operating loss of USD 314.5 million in 2020 on the back of lower revenues and non-cash impairments, partly offset by lower expensed exploration.
DNO exited the year with a cash balance of USD 477.1 million, net interest-bearing debt of USD 472.5 million and USD 12.6 million in marketable securities.
At year-end 2020, DNO held interests in 98 licences across its portfolio, with 2 in Kurdistan, 76 in Norway, 16 in the United Kingdom, 2 in the Netherlands, 1 in Ireland and 1 in Yemen.
RAK Petroleum plc’s Executive Chairman, Bijan Mossavar-Rahmani, is also Executive Chairman of the Board of Directors of DNO ASA.
05.27.2021DNO Annual General Meeting Held; All Resolutions Passed by Shareholders
05.21.2021Correction: Mandatory Notification of Trade
05.21.2021Mandatory Notification of Trade
05.13.2021Update on Kurdistan Payments
05.06.2021DNO Returns to Profitability, Ups Tawke License Production Guidance