Norwegian oil and gas operator DNO ASA revealed Friday that its foot is “coming off the brake and pressing on the accelerator” in 2016, after implementing a range of cuts last year.
In 2015 the company reduced its capital expenditure to $51 million, from $297 million in 2014, and was one of the first in the industry to cut operating expenditure in the face of a lower oil price environment. In addition, DNO also achieved annualized reductions in administrative and lifting costs worth $50 million from mid-year 2015.
In its latest results statement, DNO revealed that it plans to boost investment in its flagship Tawke field by building new wells and water handling facilities on the asset. The proposed changes would increase production by mid-year by more than ten percent from January 2016 levels, according to the company.
DNO reported record levels of operated production in 2015, driven by strong performance in the Kurdistan region of Iraq, though the company's financial results were impacted by the sharp drop in world oil prices and lower payments for exports in Kurdistan. Operated production was up 23 percent to 144,500 barrels of oil equivalent per day while revenues dropped to $187 million in 2015, down 59 percent from a year earlier. Gross production from the Tawke field in Kurdistan averaged 135,200 barrels of oil per day.
The company reported a 2015 operating loss of $174 million (2014 operating loss: $243 million) on the back of lower revenues, restructuring and impairment charges. DNO ended the year with a cash balance of $238 million, up from $114 million at end-2014.
DNO's Executive Chairman Bijan Mossavar-Rahmani commented in a company statement:
"With a strong balance sheet, major development projects already completed and the flexibility to align our spending with our earning, we are well-positioned among our peer group. We are cautiously optimistic oil prices will recover in the coming months but remain stubbornly resilient if they don't.”
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