DNO to Increase KRI Spending by 50%
DNO ASA announced Thursday that it will increase spending in the Kurdistan Region of Iraq by 50 percent in 2018 to $250 million, on the back of higher revenues and regular export payments.
The company received 12 monthly Kurdistan export payments during 2017 totaling $380 million net to DNO. The August 2017 receivables settlement agreement, which increased DNO's stake in the Tawke and Peshkabir fields from 55 percent to 75 percent plus three percent of gross license revenues over five years, contributed to higher export payments.
Operational cash flow more than tripled to $339 million in 2017 and DNO exited the year with a net cash position of $30 million, compared to net debt of $139 million at end-2016.
During 2017, DNO said it fast tracked the development of the Peshkabir field, which is currently producing a total of 16,000 barrels of oil per day (bopd) from two wells.
The company expects a total of six Peshkabir wells to be drilled this year, and expects field production to reach 30,000 bopd by summer and continue to ramp up in the second half of 2018.
Oil and gas analysts at GMP FirstEnergy said Peshkabir exhibited a ‘stronger performance and outlook’ than they had carried.
"We made the Peshkabir Cretaceous discovery early in 2017, initiated early production in June, tripled output by year's end and already have exported two million barrels with an estimated value of $100 million - more than twice the investment to date," DNO Executive Chairman Bijan Mossavar-Rahmani said in a company statement.
"And we have only started to appraise and develop this field which continues to surprise to the upside," he added.
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