Oil and gas company DNO, focused on Kurdistan and as of recently on the North Sea after buying Faroe Petroleum, is set to boost its capital expenditure to boost capital and exploration expenditure this year.
In its first-quarter results update on Wednesday, DNO said it plans to more than double capital and exploration expenditures to $440 million this year, up from $200 million last year.
Planned 2019 expenditure in Kurdistan is $250 million and $190 million in the North Sea.
“DNO has launched an active drilling program of up to 36 wells across the portfolio, representing the highest number of wells in the Company’s 48-year history. With our recent acquisition, DNO has transformed into a more balanced company,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani. “We continue to generate significant cash from ultra-low cost, short-cycle, highly prolific fields in Kurdistan but now with a strong, second leg in the North Sea,” he added.
As previously reported, DNO in January took over the North Sea-focused oil firm Faroe Petroleum, following weeks of resistance from the Faroe board, for a price of 160p a share.
DNO said Faroe acquisition brings 18,000 boepd to DNO portfolio less than two years after re-entering the North Sea. It stressed that the acquisition represents “not a pivot away from Kurdistan but a pivot to Norway and the UK.”
Following recent transactions, proven and probable (2P) reserves climbed to 465 million barrels of oil equivalent
(MMboe), of which around 20 percent in the North Sea. In 2019, current North Sea assets expected to contribute around 20 percent of DNO’s production, 30 percent of revenues and 20 percent of operating cash flow, DNO said.
On the results side, DNO, on Wednesday reported $35 million in first quarter 2019 operating revenues from its newly acquired North Sea assets, bringing the total quarterly figure across the portfolio to $204 million.
The Company generated a net profit of $51 million and exited the quarter with a cash balance of $254 million plus $109 million in treasury shares and marketable securities. For comparison, net profit in the first quarter of 2018 was $18.4 million.
Company Working Interest (CWI) production averaged 107,600 barrels of oil equivalent per day (boepd) during the first quarter, up 36 percent from 79,100boepd in the first quarter of 2018. Kurdistan contributed 89,400 barrels of oil per day (bopd) and the North Sea contributed 18,200 boepd.
Operated Kurdistan production from the Tawke and Peshkabir fields averaged 126,800 bopd during the quarter, up from 109,400 in the first quarter of 2018.
Offshore Energy Today Staff
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