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DNO Reports First Quarter 2023 Results, Scales Back Kurdistan Spend
Oslo, 11 May 2023 – DNO ASA, the Norwegian oil and gas operator, today reported revenues of USD 269 million and operating profit of USD 155 million in the first quarter of 2023. While the first quarter 2023 figures were solid with net profit doubling from the previous quarter to USD 87 million, the quarter was also marked by the shutdown of oil production in the Kurdistan region of Iraq for export through Turkey to international markets commencing 25 March 2023.
Net production across DNO’s portfolio in the quarter averaged 89,400 barrels of oil equivalent per day (boepd), of which Kurdistan contributed 70,900 barrels of oil per day (bopd), North Sea 14,800 boepd and West Africa 3,700 boepd. Oil not produced during the Kurdistan shutdown, as well as oil placed in storage, represent deferred volumes that will eventually be recovered and monetized.
Given the uncertain timing of export resumption and, importantly, of payments by the Kurdistan Regional Government for previous oil sales, DNO has scaled back spend in Kurdistan, including drilling. The number of active rigs at the operated flagship Tawke license will drop from four at the start of 2023 to none in the second half of the year following completion of previously planned activities. With these cuts, 2023 operational spend in Kurdistan has become heavily frontloaded, with 40 percent of the current full-year budget already spent in the first quarter.
Until export restarts and regularity of payment for past and ongoing oil sales is established, DNO cannot provide any projection of full-year Kurdistan production.
In the North Sea, DNO’s exploration success continued with the Røver Sør (DNO 20 percent) and Heisenberg (DNO 49 percent) discoveries announced in the quarter. These are the Company’s fourth and fifth consecutive discoveries in the Troll-Gjøa area, a current exploration hotspot given a high hit rate of medium-sized discoveries that are candidates for tieback to existing nearby infrastructure. The five discoveries are estimated to contain recoverable resources totaling 50 million barrels of oil equivalent net to DNO.
Seven wells remain to be drilled or completed as part of this year’s North Sea exploration program, all but two in the Troll-Gjøa area. The first of the exploration wells, Carmen (DNO 30 percent) is currently drilling, and will be followed by Eggen (DNO 20 percent), Litago (DNO 20 percent), Norma (DNO 40 percent), Bergknapp (DNO 30 percent, appraisal well), Ofelia (DNO 10 percent, appraisal well) and Cuvette (DNO 20 percent).
In 2023, North Sea net production is projected to average 12,000-13,000 boepd, while West Africa is projected to deliver an additional 3,500 boepd net to DNO. Total 2023 operational spend across the Company is currently projected at USD 590 million, of which the largest portion represents North Sea activities.
During the first quarter of 2023, distributions were made to shareholders through share buybacks of USD 51 million and dividends of USD 25 million. Notwithstanding, the Company exited the quarter with gross cash deposits of USD 911 million and net cash of USD 344 million.
Early next month, another quarterly dividend payment of NOK 0.25 per share will be made to shareholders.
A videoconference call with executive management will follow today at 13:00 (CET). Please visit www.dno.no to access the call.
Key figures
| Q1 2023 | Q4 2022 | Full-Year 2022 |
Gross operated production (boepd) | 94,720 | 107,822 | 107,637 |
Net production (boepd) | 89,399 | 99,257 | 97,310 |
Revenues (USD million) | 269 | 338 | 1,377 |
Operating profit/-loss (USD million) | 155 | -76 | 431 |
Net profit/-loss (USD million) | 87 | 43 | 385 |
Free cash flow (USD million) | 35 | 150 | 619 |
Net cash/-debt (USD million) | 344 | 388 | 388 |
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For further information, please contact:
Media: media@dno.no
Investors: investor.relations@dno.no
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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.
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