DNO Sees Increase in 2Q07 Net Profit
DNO ASA (OSE:DNO), announced its results for the second quarter 2007. DNO had a net profit of NOK 122.5 million in the second quarter of 2007, compared to NOK 75.0 million in the second quarter of 2006. In the first six months of 2007, net profit was NOK 141.5 million compared to NOK 45.9 million in the first six months of 2006.
New wells and successful work-overs in Yemen have contributed to an increase in the Company's production from Yemen towards the end of the second quarter. In addition commencement of production from the Enoch Field did also add new production to the Company from June. The working interest production in the second quarter was 1,144 mboe, equivalent to an average of 12,576 bopd.
DNO maintains its 2007 exit production target of 26,000 bopd, but the 2007 annual production has been revised to 15,000 - 17,000 bopd.
In Kurdistan DNO has commenced long term test production, with offtake being delivered to the domestic market by tanker trucking. DNO has continued to progress the remaining installation and commissioning work on the Central Processing Facility (CPF), the export pipeline and the metering station.
During the second quarter DNO has continued its drilling activity in Kurdistan, Northern Iraq. A new oil discovery was confirmed in the deeper reservoir horizons, and at the end of June two wells to appraise this new oil discovery were in progress. Both wells have later confirmed oil in these reservoir horizons in central/down-flank position of the field. These results serve as important input to DNO's further evaluation of the total resource potential within the Tawke area.
On the Norwegian Continental Shelf, the Bredford Dolphin rig arrived at location on 30 June 2007 to undertake its final commissioning and acceptance testing. Det Norske Oljeselskap ASA received the approval for drilling of the Lie prospect, and on 18 July 2007, the Lie well was spudded.
At the end of the second quarter, DNO launched its new growth strategy for the NCS. The target for this strategy is for Det Norske Oljeselskap ASA to become the largest independent Norwegian exploration and production company on NCS. In June a private placement of NOK 445.5 million in the subsidiary Det Norske Oljeselskap ASA was completed, and its shares were listed on the OTC in Oslo. The company is traded under the ticker "NOIL". Det Norske Oljeselskap ASA continued its growth in activities on the NCS as four new licenses (of which three as operator) were awarded.
DNO ASA reported sales of NOK 342.6 million in the second quarter 2007, compared to NOK 359.0 million in the corresponding period last year. In the first six months of 2007, DNO had sales of NOK 633.2 million, compared to NOK 774.0 million in 2006.
Profit from operations increased from NOK 131.5 million in the second quarter 2006 to NOK 233.7 million in the second quarter this year. In the first half of 2007, profit from operations amounted to NOK 235,3 million, compared to NOK 196.8 million in the first six months of 2006. The main reason for this increase was the sale of licenses PL 263 and PL 263B to Bayerngas Norge AS. The transaction was completed in June, providing a net profit after tax of NOK 98 million in the second quarter.
The second quarter net profit amounted to NOK 122.5 million, compared to NOK 75.0 million in the second quarter last year. Net profit in the first half of 2007 increased to NOK 141.5 million from NOK 45.9 million in the first six months last year.
DNO ASA reported netback (including asset sale proceeds) of NOK 267,6 million in the second quarter compared to NOK 78,4 million in 2006. For the first six months netback (including asset sale proceeds) increased to NOK 320,5 million from NOK 157,6 million in the first six months of 2006.
During the period pre-tax expensed exploration costs were down to NOK 67.3 million from NOK 110.8 million in the second quarter last year. Corresponding figures for the first six months are NOK 225.2 million in 2007 and NOK 327.6 million 2006.
In the period the company had a net increase in cash leading to a closing cash position of NOK 838.9 million.
Commenting on the results, Helge Eide, Managing Director of DNO said:
"During the second quarter we reached new important milestones. In Kurdistan the drilling results confirm the prospectivty of the area and licenses and we commenced long-term test production from Tawke wells within a year from commencement of the development. This gives grounds for optimism going forward. The development both in Yemen and Norway is in line with our expectations, and in sum the achievements and the results for the reporting period support DNO's ambitions and our long term goal of creating shareholder values".