Oslo, 8 May 2024 – DNO ASA, the Norwegian oil and gas operator, today reported first quarter 2024 operating profit of USD 61 million, 61 percent higher than the previous quarter, on the back of revenues totaling USD 183 million. Free cash flow at USD 44 million was up 31 percent from the fourth quarter of 2023.
Net production climbed 14 percent quarter-on-quarter and averaged 74,800 barrels of oil equivalent per day (boepd) in the first three months of 2024, to which the Kurdistan region of Iraq contributed 57,200 boepd, the North Sea 14,200 boepd and West Africa 3,300 boepd.
Production from the flagship Tawke license (DNO 75 percent and operator) in Kurdistan has now largely been restored after the March 2023 Iraq-Türkiye Pipeline shutdown as the Company continues to use road tankers to sell its oil to local trading companies on a cash and carry basis with payments deposited into Company accounts in international banks. DNO recently negotiated higher wellhead prices for such sales, raising them to the upper USD 30s per barrel.
The Company is also stepping up investments in its Tawke and Peshkabir fields, both within Tawke license, by restarting completion of three development wells that were discontinued last year as a cost saving measure following the pipeline shutdown. In addition, DNO has deployed its two own intervention rigs to conduct routine workovers, including repairing or replacing pumps, zone stimulations and cleaning out asphaltenes among low-cost, quick turnaround production enhancement measures.
On the Baeshiqa license (64 percent and operator), DNO is continuing to drill the B-3 well which has reached 2,500 meters of a target depth of 3,765 meters.
In the North Sea, which has rapidly developed into a second core area for DNO, the Company maintains a high activity level, pushing for speedier commercialization of its recent string of discoveries. During the quarter, the Bestla development (DNO 39 percent) was approved by partners with startup in H1 2027. Together with two other ongoing developments, namely Andvare (32 percent) and Berling (30 percent), Bestla will support a significant North Sea production increase by late in the decade.
In the first quarter, DNO announced completion of an appraisal well and sidetrack that further delineated the 2023 Heisenberg oil and gas discovery (DNO 49 percent), a new shallow play in the northern part of the Norwegian North Sea, now estimated to hold recoverable volumes in the range of 24 to 56 million barrels of oil equivalent (MMboe) (mean of 37 MMboe). Oil-bearing sands were also encountered in a deeper secondary target, Hummer.
In January, DNO announced that it had been awarded participation in 14 exploration licenses, of which three are operatorships, under Norway's Awards in Predefined Areas (APA) 2023 licensing round, bringing the Company’s total holdings to 82 licenses offshore Norway, of which 14 are operated.
Last year, DNO was the third most active exploration driller on the Norwegian Continental Shelf and ranked second in discovered volumes with an estimated 100 MMboe net to the Company. DNO has prioritized near-infrastructure exploration in areas with clear routes to commercialization of discoveries and has been an early mover in acquiring substantial acreage positions in selected areas which have since become exploration hotspots.
“Offshore discoveries in the North Sea and particularly in the Norwegian sector take significantly longer to bring to production than in other key oil and gas provinces, according to Bijan Mossavar-Rahmani, DNO’s Executive Chairman, “We not only address this by exploring near existing infrastructure but by acquiring bolt-on producing assets, including a 25 percent interest in the Arran field offshore UK and interests in multiple fields in the Norne area offshore Norway,” he continued.
Such acquisitions are made possible in part by deploying the Company’s sizeable cash position. The balance sheet remains strong with an equity ratio of 49 percent with the Company exiting the quarter with cash deposits of USD 606 million and net cash of USD 171 million. The Company redeemed in full its DNO03 bond by repaying the remaining USD 131 million in the quarter.
Given the strength of the balance sheet, the Board of Directors has authorized a dividend payment of NOK 0.25 per share to be made on or about 28 May 2024, maintaining the Company’s quarterly distribution program.
A videoconference call with executive management is scheduled today at 12:30 (CET). To access the call, please visit https://www.dno.no/.
DNO ASA is a Norwegian oil and gas operator active in the Middle East, the North Sea and West 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, Norway, the United Kingdom, C?te d’Ivoire, Netherlands and Yemen.
This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
