DNO International ASA - September Production an...
DNO is today reporting September and third quarter 2008 production
together with a summary of ongoing drilling activities.
PRODUCTION REPORT
The next stage of test production from the Tawke field in the
Kurdistan Region of Iraq resumed in September. The oil is being
lifted by the KRG who will also process the crude oil for local
needs. As reported in the Stock Exchange Notice dated 25 September
2008, reporting of test production volumes to the Company from Tawke
or any other fields will be based on revenue entitlements rather than
volumes, as test production does not reflect the normal operational
performance or production capacity of the fields.
As a result of this change, DNO's production report for September
includes production volumes from Yemen only. DNO's WI production from
Yemen in the third quarter was 8,836 bopd, down from 9,924 bopd in
the second quarter. The YTD production to DNO from Yemen is 9,706
bopd, which is in line with management's expectations.
DNO's revenue entitlement from the Tawke test production in the third
quarter was NOK 38,6 million. The temporary halt in test production
from Tawke in the third quarter will result in lower revenues to the
Company in the third quarter compared to the second quarter 2008.
Working Interest (WI) Production.
DNO's oil production (WI) is reported as follows:
(Bopd) Q1 2008 Q2 2008 Q3 2008 Sept
Yemen 10,369 9,924 8,836 8,775
Kurdistan/Iraq 7,083 10,228 n/a n/a
Total 17,452 20,151 8,836 8,775
Net Entitlement (NE) Production and Achieved Oil Price
Net entitlement production is shown in the table below:
(Bopd) Q1 2008 Q2 2008 Q3 2008 Sept
Yemen 7,320 5,979 5,122 5,140
Kurdistan/Iraq 7,083 6,830 n/a n/a
Total 14,403 12,809 5,122 5,140
Achieved oil price 61.96 71,46 115,09 *) 102,19 *)
The production figures (WI and net entitlement) include crude oil
consumed in the operation of the Company's production s facilities,
at an accumulated volume of 343 bopd during third quarter 2008 and
355 bopd during September 2008.
*) The achieved oil prices for Q3 and September apply to Yemen only.
SUMMARY OF ONGOING DRILLING ACTIVITIES
YEMEN
Block 43
The Suwehed #1 exploration well was completed 12 September 2008,
after which rig 908 was moved to drill the Nabrajah #19 development
well on the south-east flank of the Nabrajah field. The well was
completed as a water injector 14 October 2008. The rig will now be
moved to drill Wasaa #1 exploration well on the same block.
Block 44
Rig 905 was moved from block 32 to block 44, and Ghatel #1
exploration well was spudded 21 September 2008. This well is
targeting a Qishn prospect in the block.
Block 53
Exploration well Raoq #1 was spudded 1 October 2008 with rig 919, and
will explore the resource potential on a Basement structure to the
south of the Bayoot area.
KURDISTAN REGION OF IRAQ
Tawke PSC area
On 20 September the Sindy rig completed the Tawke # 9 appraisal well
as a future oil producer, without prior testing. Following these
operations a maintenance program was initiated on the Sindy rig
itself.
The Tawke # 15 well is drilled as a combined Cretaceous delineation
well and Jurassic/Triassic exploration well. The well has been
drilled to a current total measured depth of 3160 meter within the
Jurassic section, and the 9 5/8" casing has been installed. The well
will be suspended at this stage, to allow for later re-entry of the
well following a re-evaluation of the Jurassic and Triassic interval.
Hydrocarbons have not been encountered in Jurassic at this stage.
As previously reported the KRG has authorized DNO to proceed with the
remaining work in preparation for export, and this will be the key
activities at Tawke going forward.
Following Tawke # 9 and Tawke # 15, a total of 14 wells have been
drilled at Tawke and this ends the initial drilling phase at the
Tawke field. As the initial aggregate well capacity from the field is
now in excess of 100 000 bopd, further drilling is not required on
the Tawke field at this stage.
Erbil PSC Area
The Hawler #2 well is primarily targeting Jurassic and Triassic
intervals to further explore the oil discovery in Hawler #1 well. The
well has been drilled through the Jurassic interval and to the
planned total depth in the Triassic. As the reservoir pressure is
likely to by higher than originally expected equipment with higher
pressure rating is required. Therefore testing of the well is planned
to be undertaken at a later stage.
The 3-D survey across the Hawler structure is currently being
processed. These data and the well results will form the basis for
the evaluation of the resource potential and the forward plans for
the Hawler oil discovery. Further drilling within the Hawler area
will not take place until this work has been completed.
EXPLORATION EXPENSES
Expensed exploration costs in the third quarter are estimated to NOK
124 million, of which NOK 79 million are dry well costs. The
remaining balance is primarily related to seismic acquisitions. The
dry well costs relate to drilling of wells in Mozambique (Sangussi
#1) and Yemen (Suwehed #1, Dahgah #1 and Tasour #17S). The dry well
costs related to Suwehed # 1 and Tasour # 17S (NOK 29,2 million) are
recoverable as cost oil under the PSA's.
DNO International ASA
22 October 2008
Contact:
Media:
Helge Eide, MD DNO International ASA Telephone: +47 23 23 84 80
Ketil Jørgensen, Crux Communication Telephone +47 930 36 866
(Norway)
Ben Willey, Buchanan Communications Telephone: +44 207 466 5000
(UK)
Investor Relations:
Haakon Sandborg, CFO DNO International Telephone: +47 23 23 84 80
ASA
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