DNO International is looking ahead to a steep production increase in Iraqi Kurdistan, despite uncertainty over revenues and a large accounting charge that saw the company book its first quarterly loss for a year.
The Norwegian oil company, which has major assets in Kurdistan and the Middle East and North Africa, announced today that for the second quarter it booked operating revenues of NOK 155 million ($26.2 million), down from NOK 712 million ($120.6 million) in the first quarter.
The company recorded a net loss of NOK 176 million ($29.8 million) for the second quarter, driven, as previously disclosed, by an accounting charge related to a reconciliation exercise under its production sharing contract at Tawke made with the Kurdish Regional Government.
In an operational update on 17 August DNO said it allocated its share of Tawke production to the KRG for local consumption during June, July and part of August, in order to regularize its position with the KRG.
DNO said it is on track to increase production at the Tawke field in the Kurdish region to 100,000 boe a day by the end of the year. The company has allocated NOK 765 million ($130.21 million) to exploration and development over the next six months.
Production during the second quarter stood at 23,234 barrels of oil equivalent (boe) a day on a company working interest basis, down from 42,116 boe a day in the first quarter.
Lower production was caused by a halt in exports from Kurdistan, due to a political dispute between the KRG and Iraq’s central government, and also from the West Bukha field offshore Oman following a pipeline blockage.
DNO says exports from Kurdistan have been resumed in August at the rate of 40,000 barrels daily – albeit as part of a temporary effort by the KRG to resolve its payments dispute with Baghdad – and the Oman repairs have been completed, with the pipeline under commissioning.
Yesterday the company bought a further 500,000 of its own shares at a price of NOK 8.733 ($1.48) per share, as part of an ongoing buyback program.