DNO Reports 3Q07 Results
DNO ASA (OSE:DNO) reported a net profit of NOK 35.6 million in the third quarter of 2007, compared to NOK 46.4 million in the third quarter of 2006. In the first nine months of 2007, net profit was NOK 177.1 million compared to NOK 92.4 million in the first nine months of 2006.
In Kurdistan the Tawke extended test production has contributed to an increase in working interest production to 19,685 bopd, up 57 % compared to the second quarter. The crude oil is being delivered to the local market by trucking, with daily volume dictated by local demands. The Tawke test production is delivered directly from the well site at low costs.
The wells completed to date at the Tawke field have a total aggregated initial production capacity of 67,000 bopd. This is significantly above the capacity of the process and pipeline facilities, which is designed for a daily throughput of 50,000 bopd. Hence, this allows for the well program going forward to re-focus on exploration drilling to prove up additional resources within the two PSAs.
In Yemen the positive production trend from Q2 has continued into Q3. Two new production wells were completed and brought on stream during the quarter. Nabrajah well #15 was brought on stream in August, and the Bayoot SW well #3 in block 53 was put on production towards the end of September.
In Norway well 24/9-8 on the Lie prospect in PL305 was spudded on 18 July. This was the first well operated by Det Norske Oljeselskap ASA on the Norwegian Continental Shelf and represents thus an important milestone for the company. Hydrocarbons were not encountered in the well, and DNO's well costs are fully carried,
In PL265 (operated by StatoilHydro) the Ragnarrock well 16/2-3 confirmed hydrocarbons in the chalk reservoir. Based on the positive well results, the PL265 license partners decided to move the West Epsilon rig and drill the 16/2-4 appraisal well immediately.
In the third quarter negotiations were completed for combining Det Norske Oljeselskap ASA with Pertra ASA, forming the second largest E & P company on the NCS. DNO will according to the agreement have an initial shareholding of 39,97 % of the combined company.
In the shareholder meetings held by all parties on 8 November, the Integration Agreement was approved.
DNO ASA reported sales of NOK 417.9 million in the third quarter 2007, compared to NOK 283.7 million in the corresponding period last year. In the first nine months of 2007, the Company sales were NOK 1,051.1 million, compared to NOK 1,057.7 million in 2006.
Profit from operations increased to NOK 125.1 million in the third quarter this year from NOK 88.2 million in the third quarter 2006. In the first nine months of 2007, profit from operations amounted to NOK 360.5 million, compared to NOK 284.9 million in the first nine months of 2006.
The third quarter net profit amounted to NOK 35.6 million, compared to NOK 46.4 million in the third quarter last year. Net profit in the first nine months of 2007 increased to NOK 177.1 million from NOK 92.4 million in the first nine months last year.
DNO ASA reported strong netback of NOK 180.4 million in the third quarter compared to NOK 42.3 million in 2006. For the first nine months netback (including asset sale proceeds of NOK 97 million) increased to NOK 500.8 million from NOK 199.9 million in the first nine months of 2006.
During the period pre-tax expensed exploration costs were up to NOK 133.6 million from NOK 82.4 million in the third quarter last year. Corresponding figures for the first nine months are NOK 358.9 million in 2007 and NOK 410.0 million 2006
Commenting on the results, Helge Eide, Managing Director of DNO said:
"By delivering continuous production from the Tawke field throughout the third quarter, another important milestone was reached by DNO. This contributed to a strong cash flow to the Company in the quarter, but more importantly it manifested the Company's position as a fast track and cost effective Operator.
The fact that larger international E&P companies have recently signed several new PSA's in Kurdistan clearly demonstrates the increased interest and high momentum within this exciting and prospective area.
As a result of the early entry into Kurdistan in 2004, DNO is in the forefront of the events. This has put the Company in a key position to make a strong impact on developing the oil industry within one of the few remaining frontier areas."
- KRG Delivers Payments to Genel, DNO, Gulf for Tawke, Shaikan Production (Jan 23)
- DNO Makes Oil Find in Kurdistan Region of Iraq (Jan 09)
- Total, Shell, Eni Eligible to Bid for New Iran Oil, Gas Projects (Jan 03)