DNO reports increased revenues, announces dividend
UAE-linked DNO ASA, the Norwegian oil and gas operator, today announced plans for its first dividend distribution to shareholders in 13 years following release of strong half-year 2018 results, including revenues of US$289 million, up 83 percent from the same period last year. The company also reported a net profit of US$61 million and free cash flow of US$142 million during the first half of the year.
DNO’s largest shareholder is RAK Petroleum, which is also listed on the Oslo Stock Exchange.
"With growing production and robust and reliable revenues, the dividend announcement underscores confidence in our strong growth prospects," said DNO's Executive Chairman Bijan Mossavar-Rahmani. "Kurdistan is back and so is DNO," he added.
The Company continues to ramp up activity in the Kurdistan region of Iraq, where fast track development of the Peshkabir field is expected to boost output by another 15,000 barrels of oil per day, bopd, to 50,000 bopd by yearend. DNO has three rigs operating across its licences in Kurdistan, with a fourth to be added next month.
Two rigs will be active at the flagship Tawke field to reverse natural field decline through workovers and the drilling of two wells in the main Cretaceous reservoir and two wells in the shallow Jeribe reservoir.
Operations will commence at the Baeshiqa licence with another rig to be mobilised to spud the first well in September as part of a back-to-back, three-well exploration programme. DNO acquired a 32 percent interest in and operatorship of the Baeshiqa licence last year, joining ExxonMobil (32 percent), the Turkish Energy Company (16 percent) and the Kurdistan Regional Government (20 percent).
At Peshkabir, the fourth rig will spud Peshkabir-8 in 10 days followed by Peshkabir-9 in October. Early production and successful appraisal have raised previous field proven (1P) and proven and probable (2P) reserves. Two newly-completed wells, Peshkabir-6 and Peshkabir-7, will commence testing by the end of this month before being placed on production. Peshkabir-6 is key to unlocking further Cretaceous and Triassic reserves.
"Peshkabir is proving prolific in production and has generated over US $ 300 million in gross revenue since startup last year or three times the investment," said Mossavar-Rahmani.
Elsewhere, DNO recently completed the sale of its Tunisia assets and relinquished Block SL18 in Somaliland as part of the Company's ongoing rationalisation of its portfolio through divestment of non-core assets and focus on expanding operations in Kurdistan and Norway.
Offshore Norway, the Company recently added six new exploration licences for a total of 21 licences and plans to participate in one exploration well in the autumn followed by at least five wells next year.
DNO retains indirect interests in North Sea assets through its 28.23 percent strategic stake in Faroe Petroleum plc.
DNO exited the second quarter with a cash balance of US$584 million in addition to US$288 million in marketable securities and treasury shares. The Company's outstanding bond debt stands at USD 600 million.
The planned annual dividend distribution of NOK 434 million (US$50 million equivalent), or 0.4 Norwegian krone per share, payable in two tranches, in September and in the first half of next year, is subject to shareholder approval.
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