DNO Reports Strong First Quarter Results, Steps Up North Sea Activity
08 May 2024 - 3:00PM
DNO Reports Strong First Quarter Results, Steps Up North Sea
Activity
Oslo, 8 May 2024 – DNO ASA, the Norwegian oil and gas operator,
today reported first quarter 2024 operating profit of USD 61
million, 61 percent higher than the previous quarter, on the back
of revenues totaling USD 183 million. Free cash flow at USD 44
million was up 31 percent from the fourth quarter of 2023.
Net production climbed 14 percent quarter-on-quarter and
averaged 74,800 barrels of oil equivalent per day (boepd) in the
first three months of 2024, to which the Kurdistan region of Iraq
contributed 57,200 boepd, the North Sea 14,200 boepd and West
Africa 3,300 boepd.
Production from the flagship Tawke license (DNO 75 percent and
operator) in Kurdistan has now largely been restored after the
March 2023 Iraq-Türkiye Pipeline shutdown as the Company continues
to use road tankers to sell its oil to local trading companies on a
cash and carry basis with payments deposited into Company accounts
in international banks. DNO recently negotiated higher wellhead
prices for such sales, raising them to the upper USD 30s per
barrel.
The Company is also stepping up investments in its Tawke and
Peshkabir fields, both within Tawke license, by restarting
completion of three development wells that were discontinued last
year as a cost saving measure following the pipeline shutdown. In
addition, DNO has deployed its two own intervention rigs to conduct
routine workovers, including repairing or replacing pumps, zone
stimulations and cleaning out asphaltenes among low-cost, quick
turnaround production enhancement measures.
On the Baeshiqa license (64 percent and operator), DNO is
continuing to drill the B-3 well which has reached 2,500 meters of
a target depth of 3,765 meters.
In the North Sea, which has rapidly developed into a second core
area for DNO, the Company maintains a high activity level, pushing
for speedier commercialization of its recent string of discoveries.
During the quarter, the Bestla development (DNO 39 percent) was
approved by partners with startup in H1 2027. Together with two
other ongoing developments, namely Andvare (32 percent) and Berling
(30 percent), Bestla will support a significant North Sea
production increase by late in the decade.
In the first quarter, DNO announced completion of an appraisal
well and sidetrack that further delineated the 2023 Heisenberg oil
and gas discovery (DNO 49 percent), a new shallow play in the
northern part of the Norwegian North Sea, now estimated to hold
recoverable volumes in the range of 24 to 56 million barrels of oil
equivalent (MMboe) (mean of 37 MMboe). Oil-bearing sands were also
encountered in a deeper secondary target, Hummer.
In January, DNO announced that it had been awarded participation
in 14 exploration licenses, of which three are operatorships, under
Norway's Awards in Predefined Areas (APA) 2023 licensing round,
bringing the Company’s total holdings to 82 licenses offshore
Norway, of which 14 are operated.
Last year, DNO was the third most active exploration driller on
the Norwegian Continental Shelf and ranked second in discovered
volumes with an estimated 100 MMboe net to the Company. DNO has
prioritized near-infrastructure exploration in areas with clear
routes to commercialization of discoveries and has been an early
mover in acquiring substantial acreage positions in selected areas
which have since become exploration hotspots.
“Offshore discoveries in the North Sea and particularly in the
Norwegian sector take significantly longer to bring to production
than in other key oil and gas provinces, according to Bijan
Mossavar-Rahmani, DNO’s Executive Chairman, “We not only address
this by exploring near existing infrastructure but by acquiring
bolt-on producing assets, including a 25 percent interest in the
Arran field offshore UK and interests in multiple fields in the
Norne area offshore Norway,” he continued.
Such acquisitions are made possible in part by deploying the
Company’s sizeable cash position. The balance sheet remains strong
with an equity ratio of 49 percent with the Company exiting the
quarter with cash deposits of USD 606 million and net cash of USD
171 million. The Company redeemed in full its DNO03 bond by
repaying the remaining USD 131 million in the quarter.
Given the strength of the balance sheet, the Board of Directors
has authorized a dividend payment of NOK 0.25 per share to be made
on or about 28 May 2024, maintaining the Company’s quarterly
distribution program.
A videoconference call with executive management is scheduled
today at 12:30 (CET). To access the call, please visit
http://www.dno.no/.
Key figures
|
Q1 2024 |
Q4 2023 |
Full-Year 2023 |
Gross operated
production (boepd) |
76,310 |
65,773 |
46,500 |
Net production
(boepd) |
74,772 |
69,684 |
52,566 |
Revenues (USD
million) |
183 |
199 |
668 |
Operating
profit/-loss (USD million) |
61 |
38 |
218 |
Net profit/-loss
(USD million) |
17 |
4 |
19 |
Free cash flow
(USD million) |
44 |
33 |
-82 |
Net cash/-debt
(USD million) |
171 |
153 |
153 |
–
For further information, please
contact:Media: media@dno.noInvestors: investor.relations@dno.no
–
DNO ASA is a Norwegian oil and gas operator active in the Middle
East, the North Sea and West Africa. Founded in 1971 and listed on
the Oslo Stock Exchange, the Company holds stakes in onshore and
offshore licenses at various stages of exploration, development and
production in the Kurdistan region of Iraq, Norway, the United
Kingdom, Côte d’Ivoire, Netherlands and Yemen.
This information is subject to the disclosure requirements
pursuant to section 5-12 of the Norwegian Securities Trading
Act.
- Q1 2024 Interim Results Presentation
- Q1 2024 Interim Results Report
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