By John Lee.
Norwegian oil and gas operator DNO reported record oil and gas output in 2014, but the results were impacted by one-off impairment charges in the fourth quarter driven in part by the drop in global oil prices.
Gross output was up 66 percent last year to 117,482 barrels of oil equivalent per day (boepd) and company working interest production jumped 76 percent to 68,958 boepd.
Operating revenue stood at USD 452 million in 2014. Impairments of USD 297 million in Kurdistan, Oman, United Arab Emirates and Yemen led to an operating loss of USD 243 million for the year. Excluding impairments, annual operating profit was USD 53 million.
The Tawke oil field in Kurdistan continued to drive the overall increase in DNO's output. Tawke gross production rose 131 percent to 91,255 barrels of oil per day in 2014 despite ongoing security challenges. The Company remains on track to double field production and processing capacity by early 2015.
Capital expenditures in 2014 reached USD 297 million, up from USD 288 million in 2013, on the back of capacity expansion and development programs in Kurdistan. The Company ended the year with USD 114 million in cash and an additional USD 63 million in marketable securities.
"Our focus in 2015 is to align our spending with our earning," said Bijan Mossavar-Rahmani, DNO's Executive Chairman. "We are targeting operating efficiencies, cutting back on discretionary expenditures and high-grading our portfolio - a process we started late last year," he said. "We are also looking to generate larger revenues from our Kurdistan operations," he added.
The Company has restarted sales of oil into the Kurdistan local market and plans to ramp up such deliveries in the first quarter. The Company expects to realize additional payments in respect of past and ongoing exports, the timing and extent of which will drive the 2015 capital program. Mr. Mossavar-Rahmani repeated that DNO continues to have one foot on the accelerator and one on the brake.