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DNO Latest International Financial News – Tawke Oilfield, Kurdistan, Share Price and more – brought to you by Iraq Business News

DNO Announces New Wells at Tawke


By John Lee.

DNO International has announced that two new high rate horizontal wells are now pumping oil at the Tawke filed in the Kurdish region.

The combined rate of production of both wells is 37,000 bpd.

By the year’s end DNO expect to have 9 wells operational in the field, which they hold a 55% interest in. Genel Energy and the KRG hold the remaining interest in Tawke between them.

In one of the new wells, Tawke-21, eight productive fracture corridors penetrated by a 980-meter horizontal section in the main Cretaceous reservoir interval flowed an average rate of 9,700 barrels per day each.

In the other well, Tawke-22, located six kilometers away, seven productive fracture corridors penetrated by an 800-meter horizontal section flowed an average rate of 8,800 barrels per day each.  Both wells are subject to wellbore and surface facilities limitations.

DNO International’s Executive Chairman, Bijan Mossavar-Rahmani announced his satisfaction with the results.

“We hit a new production record of 129,000 barrels per day at the Tawke field on March 5 which is close to the limit of what we currently can deliver by pipeline and road tanker. With the exceptional results from these latest wells and the installation of early production packages and a new 24-inch pipeline, we are on track to meet our ambitious deliverability goal of 200,000 barrels per day in 2014.”

(Source: DNO)

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DNO Shares Hit New Record


By John Lee.

Shares in DNO International, the Norwegian oil and gas company with significant interests in Iraqi Kurdistan, were trading up 5.4 percent on Thursday morning after the company announced third quarter 2013 net profit of NOK 282 million [$45 million] on operating revenue of NOK 810 million [$130 million].

The shares are now priced at a new high of 19.88 krone.

Production climbed by around a third to a record level of 52,780 barrels of oil equivalent per day (boepd) on a company working interest basis, up from 38,720 boepd in the second quarter of 2013.

Bijan Mossavar-Rahmani (pictured), DNO International’s Executive Chairman, said:

We are pleased to have delivered record production in the quarter … Looking ahead, the excellent results from our horizontal drilling program at the Tawke field in the Kurdistan region of Iraq during the third quarter will continue to move the needle for the Company in terms of the field’s production performance and ultimate recovery potential.

Elsewhere in Kurdistan, fast track development of the Summail gas discovery was initiated during the quarter following the signing of a gas sales and purchase agreement to supply gas to the city of Dohuk for local power generation.

Appraisal and development of the heavy oil Benanan and Bastora discoveries in the Erbil block also gathered pace with temporary production facilities installed at both the Benenan-3 and Bastora-2 well sites and government approvals to initiate sales from the wells.

In Yemen, the Salsala-1 oil discovery has added incremental barrels close to infrastructure that will allow for rapid monetization and raise DNO International’s output in that country.

The Company is continuing with high levels of drilling activity with three rigs operating in Kurdistan and one in Yemen as at the reporting date. Operational cash flow of NOK 1,215 million has substantially funded capital spending of NOK 1,266 million during the first nine months of the year. The Company has maintained a robust capital structure with a free cash balance of NOK 1,577 million and net cash position of NOK 187 million as at September 30, 2013.

(Sources: DNO, Yahoo!)

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DNO Sets New Record at Tawke


By John Lee.

DNO International has announced today that it has initiated sales from its second horizontal well in the Tawke field in the Kurdistan region of Iraq following testing at a new record rate of 32,500 barrels of oil per day.

Each of ten independent fracture corridors penetrated by a 930-meter horizontal section in the Cretaceous reservoir interval flowed in excess of 9,000 barrels per day. Tawke-23 was spudded in May 2013 and the cost to drill, complete and test the well was $12 million.

The first horizontal well completed in the field last July, Tawke-20, is located six kilometers away and set the previous record production rate for a Tawke well at 25,000 barrels per day. Both wells are subject to wellbore and surface facilities limitations.

The exceptional results from Tawke-20 and Tawke-23 have fundamentally changed our approach to developing this field and also our expectations for its performance,” said Bijan Mossavar-Rahmani (pictured), DNO International`s Executive Chairman. “By any measure, these are prolific wells tapping into what increasingly feels like a sea of oil,” he added.

Drilling operations are already underway at two additional horizontal wells, Tawke-21 and Tawke-22. Both are slated for completion by yearend 2013.

DNO International holds a 55 percent interest in and operates the Tawke license. Genel Energy plc holds 25 percent and the Kurdistan Regional Government the remaining 20 percent interest.

Commenting today, Tony Hayward, CEO of Genel said:

The outstanding result of the Tawke-23 horizontal well is further evidence of the world-class properties of the Tawke field. We look forward to the results of further horizontal drilling ahead of the significant planned increase in the field’s production capacity.

(Sources: DNO, Genel Energy)

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Genel Energy, DNO Deal for Summail Gas


By John Lee.

Genel Energy and DNO International have signed a Gas Sales and Purchase Agreement with the Kurdistan Regional Government to supply gas from the Summail field in the Dohuk licence in the Kurdistan Region of Iraq.

The gas will partially displace diesel currently used to generate electricity in a 500 MW power plant in the city of Dohuk (pictured), located 40 kilometres from the field.

Initial deliveries will be around 100 million cubic feet per day sold on a take-or-pay basis for the duration of the Production Sharing Contract or until deliveries reach one trillion cubic feet. The price of gas will range between $3 and $4 per thousand cubic feet over the life of the contract.

The Prime Minister of the Kurdistan Regional Government, Nechirvan Barzani, and the Minister of Natural Resources, Dr. Ashti Hawrami, were present at the signing ceremony held in Erbil today and are signatories to the contract.

The next step in the fast-track development of the field is re-entry and completion of the Summail-1 discovery well and the installation of a 24 inch pipeline to transport gas to what is slated to become the regional gas gathering and distribution network. First gas from Summail-1 is planned in January 2014. The second well, Summail-2, will spud in the fourth quarter and the Summail-3 well is scheduled for 2014.

Following the development of the Summail field, the focus will shift to the appraisal of the oil potential of the Dohuk license.

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DNO Updates on Tawke Testing


DNO International announced today that it has commenced extensive testing of the Tawke-23 exploration well in the Kurdistan region of Iraq.

The well is the second horizontal well drilled by the Company in the Tawke field and has encountered continuous oil shows within a 930 metre horizontal section in the main Cretaceous reservoir. The test program, expected to last up to three weeks, will focus on ten fracture zones with production potential.

The Company’s first horizontal well in the field, Tawke-20, tested 8,000 barrels per day from each of ten producing intervals in the Cretaceous reservoir and is currently on stream at an average rate of 25,000 barrels per day.

Also currently drilling in Kurdistan are two other Tawke horizontal development wells, Tawke-21 and Tawke-22, and the highly deviated Benenan-4 well in the Erbil license designed to appraise the additional reserves encountered in the Benenan field by the Benenan-3 well earlier this year. Benenan-3 has been completed and temporary production facilities installed, pending government approval to commence sales.

The Bastora-2 well in the Erbil license has been completed and temporary production facilities are undergoing installation. The Bastora field development plan was previously approved and the Ministry of Natural Resources now has authorized sales from the field with first deliveries anticipated in October.

Based on current trends, DNO International expects third quarter production from its fields in Kurdistan, Oman and Yemen will reach record gross levels of around 85,000 barrels of oil equivalent per day (boepd), corresponding to an estimated Company Working Interest (CWI) production of 50,000 boepd. Gross production for full year 2012 was 67,238 boepd, corresponding to 38,354 boepd on a CWI basis.

(Source: DNO)

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DNO Reports Record Output at Tawke


DNO International today announced second quarter 2013 net profit of NOK 280 million on operating revenue of NOK 764 million.

Production climbed by nearly a third to 38,720 barrels of oil equivalent per day (boepd) on a company working interest basis from 29,061 boepd in the first quarter of 2013 and 23,234 boepd a year earlier.

“We continue to de-risk and deliver across our portfolio,” said Bijan Mossavar-Rahmani (pictured), DNO International’s Executive Chairman, “and most impressively in our operations in the Kurdistan region of Iraq.”

The Company set several key operational milestones during the second quarter at its flagship Tawke oil field, including highest production in a single day (112,949 barrels), highest sales in a single day (102,393 barrels), highest production from one well in a single day (25,052 barrels), largest number of tankers loaded in a single day (532 tankers or one every 2 minutes and 43 seconds).

Cumulative production from the Tawke field also passed the 50 million barrel mark earlier this year.

Mr. Mossavar-Rahmani noted that DNO International continues its active program of exploration, appraisal and development drilling while adding new acreage in both established and frontier basins, confident that the Company is well positioned financially and organizationally to capitalize on current and future growth opportunities.

During the first half of 2013, six onshore and offshore drilling rigs were active in eight blocks in three countries and four additional blocks in four countries were added to the portfolio. Operational cash flow of NOK 843 million exceeded capital spending of NOK 830 million during the first half of the year. The Company has maintained a robust capital structure with a free cash balance of NOK 1,648 million and net cash position of NOK 257 million as at June 30, 2013.

(Source: DNO)

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List of Oil Companies in Kurdistan


Erbil Governorate has compiled and published a list of the top oil companies in Kurdistan [Note: This list was originally compiled and published by Marcopolis - Ed.].

Listing them by country:

USA

  • Exxon Mobil
  • Chevron
  • Aspect Energy
  • Marathon Oil Corporation
  • Hillwood International Energy
  • Hunt Oil
  • Prime Oil
  • Murphy Oil
  • Hess Corporation
  • HKN Energy
  • Viking International

Canada

  • Forbes and Manhattan
  • Western Zagros Resources
  • Talisman Energy Inc
  • NIKO Resources
  • Ground Star
  • Shamaran

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Oil Discovery at Tawke Licence


By John Lee.

DNO International announced today that its deep Tawke-17 well tested 1,500 barrels a day of 26-28 degree API crude oil from an Upper Jurassic reservoir underlying the Tawke field in the Kurdistan Region of Iraq.

Separately, the Tawke-20 well, the Company’s first horizontal well in the Tawke field, has flowed an average of 8,000 barrels a day from each of the first four of ten fractured corridors penetrated by the well. Testing continues on both wells.

Bijan Mossavar-Rahmani (pictured), DNO International’s Executive Chairman, said:

We are very pleased that initial Tawke-17 results are in line with the Company’s pre-drill estimates. This discovery in the Sargelu formation, over 200 meters below the main field Cretaceous reservoir, likely bumps recoverable reserves on the Tawke license to the one billion barrel mark.

Drilling of a second Tawke horizontal well continues on schedule. “If this second well, Tawke-23, demonstrates the significant deliverability uptick we are now seeing in Tawke-20, we will go back to the drawing board and consider further enhancements to our current target of 200,000 barrels a day of production capacity by 2015,” Mr. Mossavar-Rahmani said. Last month the Company announced that it had met its previous goal of delivering 100,000 barrels a day from the Tawke field following 72 hours of well and facility tests.

The Tawke-17 well, the deepest drilled by the Company in the Tawke field, encountered several Triassic zones that proved either tight or water bearing. Two additional identified reservoir intervals in the Upper Jurassic remain to be perforated and tested.

DNO International holds a 55 percent interest in and operates the Tawke license. Genel Energy plc holds 25 percent and the Kurdistan Regional Government the remaining 20 percent interest.

Tony Hayward, Chief Executive of Genel Energy, said:

Today’s news reinforces the extremely positive first half of 2013 that Genel has had with the drill bit, with the company having three new discoveries in the Kurdistan Region of Iraq in the space of three months. We look forward to working with DNO to determine the full extent of the new discovery.

(Sources: DNO, Genel Energy)

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