DNO ASA, the Norwegian oil and gas operator, today announced 2018 net profit of US $ 354 million on revenues of US $ 829 million, the highest annual revenues in the Company’s 47-year history. Cash flow from operations increased 40 percent to US$ 472 million in 2018, of which US $ 334 million represented free cash flow.
DNO, whose largest shareholder is RAK Petroleum, holds stakes in onshore and offshore licences at various stages of exploration, development and production in the Kurdistan region of Iraq, Norway, the United Kingdom and Yemen.”
Operated production averaged 117,600 barrels of oil equivalent per day (boepd) including 81,700 boepd on a Company Working Interest (CWI) basis, up from 113,500 boepd and 73,700 boepd, respectively, during 2017. January 2019 operated production averaged 128,000 barrels of oil per day (bopd) or 90,000 bopd on a CWI basis.
The Company stepped up its operational spend in 2018 to nearly US $ 300 million to support the fast-track development of the Peshkabir field in the Kurdistan region of Iraq and the ongoing drilling programme at the Tawke field within the same licence.
Spending levels in 2019 are projected to rise more than 40 percent from 2018 levels, to an estimated USD 420 million. DNO’s 2019 drilling programme includes up to 20 exploration and production wells in Kurdistan, including up to 14 wells at the Tawke field, four at Peshkabir and two at the Baeshiqa licence. Another five wells are planned in DNO licences in Norway.
In Kurdistan, two recently completed wells, Peshkabir-9 and Tawke-52, will be placed on production this month. Testing of the first Baeshiqa exploration well targeting the Cretaceous reservoir has been delayed by extensive rainfall but is also expected to commence this month.
Already the leading international oil company in Kurdistan, with a 75 percent operating interest in fields contributing a third of the region’s total exports, the Company is now firmly establishing itself in Norway as it completes the takeover of Faroe Petroleum plc. With 90 licences, of which it acts as operator in 22, DNO will leapfrog to the ranks of the top five companies in total licences held in Norway.
“The Faroe transaction transforms DNO into a more diversified company with a strong, second leg,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani. “This represents not a pivot away from Kurdistan but a pivot to Norway,” he added. “We are now well positioned in two areas in which we have a comparative, even competitive, advantage.”
The combination places DNO among the top three European-listed independent oil and gas companies in production and reserves.
DNO has acquired more than 96 percent of Faroe shares and initiated the compulsory acquisition of the remaining shares. The integration of the Faroe and DNO organisations is well underway and the new combined entity has over 1,100 employees and offices in Oslo, Stavanger, Erbil, Dubai, London, Aberdeen and Great Yarmouth.
DNO’s Board of Directors have approved a dividend payment of NOK 0.20 per share to be made on or about 27th March 2019.