Norwegian oil company DNO plans to bring two oil production wells back on stream in its northern Oman Block 8 licence during 2017, nearly doubling daily production at its West Bukha and Bukha oilfields, it announced this week according to WAM.
DNO’s majority shareholder is RAK Petroleum of Ras al-Khaimah.
In its interim report for 2016, released this week in Oslo, DNO also announced plans to step up drilling in the Kurdistan region of Iraq, on the back of 2016 operating profits and improved payments for exports from its flagship Tawke field in Kurdistan. The company also released its annual reserves report which showed an increase in combined proven and probable (oil and gas) reserves (2P) and contingent resources (2C) following its new oil discovery at the Peshkabir field in Kurdistan.
DNO reported interim 2016 operating profits of $6mn, reversing an operating loss of $174mn in 2015. Following two years of cost cutting and asset rationalisation, the company is restarting investments to replenish its oil and gas reserves and restore production across its portfolio.
Planned 2017 capital investments are estimated at $100mn, and include four new production wells at Tawke. Elsewhere in Kurdistan, the company plans to drill a third well at Peshkabir and an appraisal/production well at the Benenan field in the Erbil license. In Oman, two wells will be brought back onstream at Block 8 offshore with plans to nearly double output at the West Bukha and Bukha fields (off the Musandam peninsula, north of Ras al-Khaimah).
The company is considering three additional wells at Tawke to raise production above current levels of around 115,000 barrels of oil per day contingent on regular and predictable export payments from the Kurdistan Regional Government.
During 2016, DNO received ten payments totaling $210mn net to the company for Tawke exports and outstanding receivables. Three additional payments totalling $59mn net to DNO have been received to date in the first quarter.
“These payments create momentum as we move into 2017,” said DNO’s executive chairman Bijan Mossavar-Rahmani.
Early production from Peshkabir and transport of oil to the company’s gathering, processing and export facilities at Fish Khabur 12km away is under assessment.
“The Peshkabir field positions us for production and reserves growth in our Kurdistan portfolio,” said Mossavar-Rahmani, indicating that the Cretaceous discovery added 47.9mn barrels of oil equivalent (MMboe) of gross 2C resources.
As of 31st December 2016, DNO’s Company Working Interest (CWI) 2P reserves and 2C resources were estimated at 529.6 MMboe, up from 523.1 MMboe at year-end 2015. CWI 2P reserves were estimated at 368.3 MMboe, down from 391.5 MMboe at year-end 2015 after adjusting for CWI production of 25.3 MMboe during the year and a positive technical revision of 2.1 MMboe. CWI 2C resources were estimated at 161.3 MMboe, up from 131.6 MMboe at year-end 2015.
At Tawke, 2P reserves and 2C resources stood at 604mn barrels (MMbbls) at year-end 2016, down from 643.2 MMbbls at year-end 2015. Gross proven (1P) reserves stood at 347.7 MMbbls, down from 387 MMbbls at year-end 2015. Gross 2P reserves stood at 503.8 MMbbls, down from 543 MMbbls at year-end 2015. The reduction in each category reflected total production of 39.3 MMbbls from the field during the year.
DNO is a Norway-based oil and gas operator focused on the Middle East and North Africa. Founded in 1971 and listed on the Oslo Stock Exchange, the company holds stakes in onshore and offshore licenses at various stages of exploration, development and production in the Kurdistan region of Iraq, Yemen, Oman, the United Arab Emirates, Tunisia and Somaliland. Its largest shareholder is UAE-based RAK Petroleum.
