Shares in DNO International jumped 8% on Tuesday following its report of a more than doubling of reserves for the Tawke oil field in the Kurdistan region of Iraq, as a result of a review and assessment by a firm of independent reservoir engineers. The just completed audit of reserves by France’s Beicip Franlab places Tawke’s ultimate P50 recoverable reserves at 636 million barrels versus a yearend 2010 audited figure of 306 million barrels.
“After this third party review by our external auditors, the Tawke oil field is confirmed to be a world class, giant oil field. The new reserves numbers far exceed our expectations of even a few months ago and certainly were not envisaged when we made the discovery in 2006. But the field’s recent performance has proven its exceptional reservoir quality,” said Managing Director Helge Eide.
Tawke’s original oil-in-place is estimated at 1,748 million barrels and the estimated recovery factor of 36,4 per cent is based on the 2011 production profile and updated geological and reservoir models. Tawke production is currently averaging 70,000 barrels a day.
Separately, DNO International has undertaken to estimate the size of other discoveries on its
licenses in the Kurdistan Region of Iraq as well as the potential of all undrilled prospects and
geological horizons in response to a request by the Kurdistan Ministry of Natural Resources pursuant to the regional government’s survey of its oil and gas reserves and resources.
Within the Erbil license, the combined ultimate P50 recoverable resources for the Benenan and Bastora oil discoveries are estimated at 136 million barrels (Benenan 36 million barrels and Bastora 100 million barrels) based on an estimated original oil-in-place of 950 million barrels for the two fields and a combined recovery factor of 14 per cent (Benenan 9 percent and Bastora 18 percent). These revised (unaudited) estimates are principally attributable to the new Bastora discovery and confirmed by recent positive test results from the Bastora-1A horizontal sidetrack section.
A declaration of commerciality for the Benenan and Bastora discoveries was filed with the authorities on 25 June 2011 with a field development plan due by yearend. Until a development plan is approved, the volumes reported for Benenan and Bastora will be classified as contingent resources.
In its report to the Ministry of Natural Resources, DNO International has estimated that the three licenses operated by the Company in the Kurdistan Region of Iraq have a gross oil-inplace potential of 3,050 million barrels(unrisked) in known but undrilled prospects and geological horizons.