Shares in DNO were up as much as 7% during the day on Tuesday, before closing the day up 4.25% up on Monday's close, following the announcement of increased reserves at its Tawke oilfield:
The Ministry of Natural Resources of the Kurdistan Regional Government (KRG) is conducting its first ever survey of regional oil and gas reserves to be used in conjunction with Iraqi federal authorities for reporting of countrywide reserves.
In its capacity as operator of three licenses in Kurdistan, DNO International ASA has been requested urgently to submit its current estimates for both resources and reserves within these contract areas.
As previously reported, DNO International has been undertaking a revision of the reserves at the Tawke field based on recent production history and updated geological and reservoir models and expects to report significant increases in estimated reserves for this field.
"Based on our current estimates we expect the gross ultimate P50 recoverable reserves for Tawke to be in excess of 500 million barrels," says Managing Director Helge Eide.
This figure is significantly higher than the previous management estimates of 387 million barrels of Tawke gross ultimate P50 recoverable reserves provided in the Management Discussion and Analysis (MD&A) section of the Annual Statement of Reserves (ASR) on 18 April 2011. The comparable audited figure from DNO International's external reservoir engineers, France's Beicip Franlab, based on field data through the end of 2010 and reported in the 2011 ASR was 306 million barrels.
With the resumption of exports of oil from Kurdistan in February 2011, Tawke production has climbed rapidly and has been sustained at around 70,000 barrels per day. "While reserves estimates are a work in progress and subject to change as new information is obtained, Tawke is certainly exceeding our expectations in terms of deliverability and field size," Eide said. "We are very excited and pleased with what we are learning."
Additional work is also underway to estimate the size of the Benenan and Bastora discoveries as well as the potential of all undrilled prospects and geological horizons in DNO International's licenses in Kurdistan.
DNO International has commissioned Beicip Franlab to provide a new interim Tawke report based on the latest production history and the Company's updated models, Eide said. Both the report under preparation by DNO International for KRG authorities and the independent review by Beicip Franlab will be released when completed.