DNO, Total Report Record Output amid 4Q Losses
European energy firms DNO ASA and Total S.A. recorded report production outputs in 2015 amid fourth quarter losses.
DNO’s operated production in 2015 totalled 144,200 barrels of oil equivalent per day, which marked a 23 percent increase from 2014. Output from the Tawke field in the Kurdistan Region of Iraq averaged 135,200 barrels of oil per day and the company expects “further increases” to follow as additional investments are made. The field produced a total of 50 million barrels last year.
After a period of non-payment by the Kurdistan Regional Government, DNO has received five consecutive monthly payments for Tawke exports and new payment arrangements by the KRG have led to higher planned spending from the company at this field.
DNO registered a net loss of $83.3 million in 4Q 2015 and a net loss of $212.3 million for the full year. In 2014, DNO posted 4Q and full year net losses of $252.5 million and $226.1 million, respectively. The company’s capital expenditure (CAPEX) spending reduced to $51 million in 2015, from $297 million in 2014 as DNO cut costs due to the lower oil price environment.
DNO's Executive Chairman Bijan Mossavar-Rahmani commented in a company statement:
"As much of the industry continues to hunker down, DNO's foot is coming off the brake and pressing on the accelerator.
"The export payment arrangement just put in place provides regularity, predictability and transparency, thereby laying the foundation for stepped up investments in Kurdistan.
"DNO has already pulled away from the pack in Kurdistan in terms of production and exports, currently contributing nearly 60 percent of export volumes by the international oil companies. In addition to the scale and attractive economics of DNO's oil reserves – unrivaled among our peer group – we have balance sheet strength to weather the oil price storm and will emerge from this crisis stronger and more profitable. We are stubbornly resilient."
Total’s increased its production to 2.3 million barrels of oil equivalent per day in 2015, from 2.1 million boepd in 2014, largely due to nine project start-ups and a number of output ramp-ups. This increase was, however, slightly impaired as a result of shutdowns in Yemen and Libya which were prompted by security issues.
The French oil and gas firm posted a net loss of $1.6 billion in the fourth quarter of 2015, compared to a net loss of $5.6 billion in 4Q 2014, and a net profit of $5 billion for the full year, compared to a net profit of $4.2 billion for the whole of 2014. Total decreased its CAPEX by 15 percent last year and a cost reduction program allowed it to save $1.5 billion.
Commenting on the results, Total Chairman and CEO Patrick Pouyanne said in a company statement:
“Hydrocarbon prices fell sharply in 2015 with Brent decreasing by around 50 percent. In this context, Total generated adjusted net results of $10.5 billion, a decrease of 18 percent compared to 2014, the best performance among the majors. This resilience in a degraded environment demonstrates the effectiveness of the group’s integrated model and the full mobilization of its teams.
“Discipline on spending was reinforced in 2015. The cost reduction program allowed us to save $1.5 billion, exceeding the objective of $1.2 billion. Organic CAPEX was $23 billion, a decrease of close to 15 percent compared to 2014.”
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