DNO International: Growth in Production and Sal...
Oslo, 20 August, 2008: DNO International ASA (OSE:DNO) today
announced its interim results for the second quarter and first six
months of 2008. DNO reported strong growth in production and sales
during the quarter. The WI production increased by 70 % to 20 151
bopd (11 855 bopd) and the sales increased by 30 % to NOK 412.5
million (NOK 316.6 million) in the second quarter. After exploration
costs expensed of NOK 85.9 million in the second quarter (NOK 10.4
million) the netback was NOK 185.4 million (NOK 214.5 million) and
the net profit before discontinued operations was NOK 13.6 million
(NOK 62.3 million).
- We have delivered production well above plan so far this year. The
increased production contributes to strong cash flow, funding our
high exploration activity as well as a significant portion of our
development costs. With yet another oil discovery in the second
quarter we have made four new discoveries this year - all in new
exploration areas - said Helge Eide, Managing Director.
Following the Hawler # 1 oil discovery well in the Erbil PSC area
which tested 11,000 bopd aggregated from two tests in the Jurassic
interval, the Hawler #2 appraisal well spudded during the second
quarter. Three new oil discoveries has been made in Yemen so far this
year; two during the first quarter an one in the second quarter The
Sharnah #1 well in Block 47 in Yemen confirmed oil in a new structure
and the well was completed as a future potential producer. Both
Yaalen #1 and Yaalen #2, also in Block 47 wells confirmed oil while
drilling and from open-hole fluid sampling. Testing of these wells
commenced during the second quarter but the final results are not
available to date.
The total gross delivery from DNO's producing assets increased by 27
% in the second quarter as a result of the increased production from
the Tawke field, which is well ahead of plan. DNO's working interest
(WI) production during the second quarter was 20 151 bopd (11 855
bopd), and during the first six months 18 952 bopd (11 839 bopd). The
WI production so far this year is well ahead of the guided volumes.
The net entitlement (NE) production to DNO in the second quarter was
12 809 bopd
(8 790 bopd) and 13 607 bopd (8 718 bopd) for the first six months.
The achieved oil price was USD 71.5 (USD 68.9) per barrel in the
second quarter and USD 66.4 (USD 61.9) per barrel for the first half
of 2008.
In the second quarter 2008, DNO's sales increased by 30 percent to
NOK 412.5 million compared to the second quarter 2007. For the first
six months sales increased to NOK 834.4 million, an increase of 44
percent compared to NOK 579.9 million in the first half of 2007. The
increase is related to both higher production volumes and higher
achieved oil price (NE).
DNO has maintained its focus on exploration activities in both
Kurdistan as well as Yemen. Total exploration expenditure in the
second quarter of 2008 was NOK 199.1 million, compared to NOK 18
million in the second quarter of 2007. In the first six months, total
exploration expenditure was NOK 356 million.
Exploration expenditure consists of expensed and capitalized
exploration. The exploration efforts in the second quarter resulted
in one new oil discovery, adding up to four discoveries in the first
half of 2008.
DNO expensed NOK 85.9 million in exploration in the quarter. This is
substantially higher than the corresponding quarter last year (NOK
10.4 million). For the first half year, the exploration expensed
amounted to NOK 120.1 million, compared to NOK 73.5 million in the
first six months last year.
The capitalized exploration costs during the second quarter were NOK
113.9 million, while DNO capitalized NOK 236.0 million in exploration
costs in the first half of 2008.
As a result of the increased level of exploration, the EBITDA
decreased from NOK 248.8 million in the second quarter in 2007 to NOK
242.8 million in this year's second quarter. For the first six
months, the EBITDA increased to NOK 533.6 million from 407.5 million
in 2007.
The second quarter net profit amounted to NOK 13.6 million, compared
to NOK 62.3 million (before discontinued operations) in the second
quarter last year. In the first six months, net profit amounted to
NOK 76.0 million (before discontinued operations) compared to NOK
102.5 million in 2007.
Based on the discoveries made during the first six months combined
with the exploration program going forward, the company expects to
see a further growth in the reserves and resources during 2008.
Once export of oil from the Tawke field is in place DNO will face a
step change in production volumes resulting in a substantial growth
in the cash flow to the Company. This will further strengthen DNO's
financial capacity and flexibility.
***
For full interim report, please see the attachments on www.newsweb.no
and www.dno.no.
For further information, please contact;
Media contacts:
Helge Eide, Managing Director, DNO International ASA; +47 23 23 84 80
Ketil Jørgensen, Crux Kommunikasjon (Norway); +47 930 36 866
Ben Willey, Buchanan Communications (UK); +44 207 466 5000
Nick Melson, Buchanan Communications (UK); +44 207 466 5000
Investor Relations contact:
Haakon Sandborg, CFO, DNO International ASA; +47 23 23 84 80
Notes to the Editors:
DNO International ASA ("DNO") is an independent E&P company engaged
in the acquisition, exploration, development and operation of oil and
natural gas properties. The company's head office is in Oslo, Norway,
with worldwide activities. DNO serves as operator or active license
partner in several production and exploration assets, and our current
assets are in Yemen and the Kurdistan Region of Iraq as well as UK,
Equatorial Guinea, Mozambique and Syria.
Please visit DNO's website on www.dno.no for more information about
the company and its operation. The website also includes an online
media center where visitors can download images from our production
sites as well as photos of our management