DNO ASA, the Norwegian oil and gas operator, has reported strong second quarter operational and financial results powered by high oil and gas prices and by solid production in its operated flagship Kurdistan Tawke license. Spurred by quarterly revenue of USD 361 million and free cash flow of USD 167 million, the company reduced debt and exited the quarter in a positive net cash position for the first time since 2018.
“DNO is committed to put its capital to work in its core competency and capture new opportunities created as peers and even some of the largest European companies scale back spending and focus instead on harvesting,” says Executive Chairman Bijan Mossavar-Rahmani. “We believe in the oil and gas business and in our responsibility to all stakeholders, including host governments who want to capitalise on current prices and consumers who now call for more production, not less,” he adds.
Gross production at the Tawke license averaged 106,900 barrels of oil per day (bopd) during the second quarter, of which Peshkabir contributed 62,300 bopd and Tawke 44,600 bopd, the latter representing the first quarterly production increase since 2015 at this legacy field as new wells are drilled, workovers conducted on existing ones and gas injection continued.
Of total Kurdistan production, 80,400 bopd were net to DNO’s interest. North Sea net production averaged 11,600 barrels of oil equivalent per day (boepd), bringing the company’s total quarterly net production to 92,000 boepd.
In the second quarter, four new production wells were brought onstream in the Tawke license with three at Tawke and one at Peshkabir. Together with wells drilled in the first quarter, natural field decline has been arrested and reversed, including at Tawke, raising the company’s full-year projection to 107,000-109,000 bopd.
Following government approvals, DNO commenced trucking of production in mid-June from the Zartik-1 discovery well in the operated Baeshiqa license for export at an average rate of 600 bopd. Production from the well has been choked back as the company targets zones with lower gas-to-oil ratios to avoid flaring. Development of the license continues with the drilling of Zartik-2 and Zartik-3, to be followed by Baeshiqa-3 in the fourth quarter.
In the North Sea, operated Brasse field development progressed into front end engineering and design ahead of planned project sanction by yearend 2022. The company remains an active North Sea explorer with three more exploration wells to be drilled this year in addition to the four already drilled in the first half of 2022, one of which, Kveikje (DNO 29%), is considered a likely commercial discovery, as previously reported.