DNO Silent on Iraq Export Timing, Q1 Tops View

Norwegian oil and gas producer DNO International (DNO.OL) gave no guidance as to when it expects to restart oil exports from Iraq when it published first-quarter results that beat forecasts on Tuesday.

“The process is moving ahead but we have no information about when things will happen,” Managing Director Helge Eide told a news conference.

DNO made an operating profit of 95 million Norwegian crowns ($16 million) in January-March, against a 77 million crown loss in the 2009 period and a forecast for a 90 million profit in a Reuters poll.

“At current oil price levels we expect that our cash position combined with cash flow from our producing assets will be sufficient to cover our planned investments for this year,” DNO said, adding it was “also considering additional investments”.

DNO’s net entitlement production in Kurdistan amounted to 3,337 barrels of oil per day and 4,889 barrels in Yemen. DNO has said it can quickly ramp up to 50,000 barrels a day output from the Tawke field once it gains the elusive export licence.

“Once all export issues are resolved for the Tawke field in Kurdistan, our production will increase and thereby position the company to accelerate its growth plans both within the current portfolio, but also through new entries,” DNO said.

DNO has been a trailblazer in Iraq, signing an exploration deal with the Kurdish authorities soon after the 2003 U.S.-led invasion. The company also has operations in Yemen.

After only a few months of pumping oil from its Tawke field out of Iraq, DNO stopped exports in September. Its payments for the exported oil are expected only after Kurdish authorities and Baghdad iron out a long-awaited deal to share oil revenues.

A Kurdish official said last month that Kurdish and federal Iraqi officials agreed on potential mechanisms for paying oil firms operating in the Kurdish north but the proposals must be approved by the Iraqi cabinet. [ID:nLDE63C1NG]

DNO said it would continue to focus on limited local sales in Iraq until a payment deal for exports is in place as well as developing its operations in Yemen.

“The drilling results from Yemen are encouraging, with the Yaleen-3 well now successfully tested and we now intend to accelerate the development of this area,” Eide said.

Shares in DNO were up 0.72 percent at 8.42 crowns at 0743 GMT, while the Oslo bourse .OSEBX was off 0.51 percent. ($1=5.897 Norwegian Crown) (Reporting by Joergen Frich, writing by Wojciech Moskwa)

( Reuters )

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