DNO seeking ongoing revenues to sustain Kurdistan operations

Q2 2015 Results

DNO ASA, the Norwegian oil and gas operator, set record production levels from the Tawke field in the Kurdistan region of Iraq during the second quarter of 2015 with output averaging 153 346 bpd. A total of 118 037 bpd, representing 77% of field production, was delivered to the Kurdistan Regional Government for pipeline export through Turkey. An additional 31 378 bpd was sold into the local market and the balance processed in the company's Tawke refinery.

Company-wide revenues increased to US$55 million, up from US$26 million in the first quarter. Net loss declined to US$40 million from US$61 million in the first quarter.

Kurdistan's Ministry of Natural Resources recently announced plans to allocate monthly payments from its independent oil sales to DNO and other operators from September onwards. "We welcome regular export payments which are necessary to sustain our operations in Kurdistan," said Bijan Mossavar-Rahmani, DNO's Executive Chairman. "Without such payments, we will not be in a position to make further investments," he added, "and without further investments, production from the Tawke field will decline."

Discussions are ongoing with the Kurdistan Regional Government to allocate export revenues to DNO on a regular, predictable and ongoing basis, consistent with the company's contractual entitlements.

DNO's receivables from the Kurdistan Regional Government for past Tawke production approached US$1 billion at the end of the second quarter, of which US$ 829 million represented unbooked revenues for export sales and US$118 million represented booked revenues for local sales and refined product sales.

Gross production stood at 162 422 boe/d during the quarter, including 9076 boe/d from offshore Block 8 in Oman.

Adapted from a press release by Louise Mulhall

Published on 20/08/2015

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