DNO, a Norwegian company controlled by RAK Petroleum, whose main asset is the Tawke oilfield in Kurdish Iraq, reported a smaller loss for the third quarter compared with last year.
The company said it had a “total comprehensive” after-tax loss of US$14.9 million in the three months to the end of September, an improvement on the $41.6m loss reported a year earlier.
But DNO said the value of sales for the quarter was down more than half, at $52m versus $116m for last year’s third quarter, reflecting sharply lower world oil prices.
The decline in revenue came despite sharply higher production volumes and exports from the Tawke field, in which DNO has a 55 per cent interest, Genel Energy 25 per cent and the Kurdistan Regional Government the remainder.
The company said that Tawke gross output averaged 145,184 barrels per day in the third quarter, up from slightly more than 100,000 bpd on a year earlier, although slightly down from the second quarter of this year. Most of the output – about 121,000 bpd – was exported via pipeline to the Turkish port of Ceyhan.
The company said that revenue in the latest quarter was boosted by a $30m payment for exports from the KRG. It had agreed to begin regular payments to operators following a long period of building arrears as conflict in the region and the ongoing dispute over revenues from the central government in Baghdad drained government revenues.
DNO also made $24m from sales of oil and refined products – mainly diesel – in the local market.
The company said it had cash of $247m on hand at the end of the quarter, but stipulated that the investment needed to develop Tawke and its other Kurdish region interests would depend on regular payments being maintained.
“New drilling and other investments are necessary at Tawke to reverse natural field decline and sustain production in 2016, although the timing and extent of new investments are tied to a sustained and regular revenue stream,” DNO said. “With improved payments, the company will drill the Peshkabir appraisal well and fast-track development of this field, also located in the Tawke licence.”
DNO’s share price hit a high early last year at about 25 Norwegian kroner but dropped sharply with the oil price to a low of about 7 kroner in August before bouncing back when the KRG said it would start regular payments to exporters. The shares were up 0.0 at 9.16 kroner after the results were announced before dropping 2 per cent later in the day at 5pm UAE time.
amcauley@thenational.ae
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