DNO Significantly Increases 2006 Exploration Budget
DNO ASA has set a NOK 650 million (US $100 million) pre-taxation exploration budget estimate for 2006, incorporating an increased exploration program across its core areas of operation. The Company plans to participate in a total of 22 exploration wells in 2006, of which 15 as Operator.
The 2006 exploration program marks a 130% increase from 2005, in which the Company invested NOK 282 million (pre taxation) in exploration drilling, seismic data acquisition, license acquisition and other exploration activities. The 2005 exploration investments added proven and probable reserves of 44 million barrels to DNO, an increase of 152% for the year. In 2005 DNO achieved a Reserve Replacement Ratio of 830%.
As a member of a consortium with other oil companies, DNO has now secured 340 rig days to the Company on the Norwegian Continental Shelf (NCS) for the three year period starting 4 Quarter 2006. During that period the DNO will be in a position to drill 6-8 exploration wells within its NCS operated licenses targeting a substantial resource potential.
With this rig contract in place DNO plans to participate in at least 4 exploration wells on NCS during 2006, of which one as Operator. On the UK Continental Shelf DNO will start drilling the Jaguar prospect during January 2006 and in the Middle East Region there will be continuous exploration drilling activities throughout the year.
The total 2006 exploration budget will be off set by favorable tax environments, giving DNO post taxation costs of approximately NOK 330 million (US $51 million).
Commenting on the exploration plans for 2006, Helge Eide, Managing Director of DNO said:
"DNO has continuously added new reserves since the sale of North Sea assets in 2004. Now 2 years later our proven plus probable reserves are back to above 100 million barrels resulting in a replacement of over 77 % of this disposal program.
With a significant increase in exploration program, 2006 will be an exciting and demanding year for DNO, where our continued focus and efforts will be to transform potential resources to reserves at low costs."
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