Distribution of company announcements to the professional platforms, finance portals and syndication of important corporate news to a wide variety of news aggregators and financial news systems.
DNO International ASA (OSL:DNO) DNO is pleased to report August 2008 production figures and a summary of ongoing drilling activities.
PRODUCTION REPORT
DNO's Working Interest (WI) production in August was 8,349 bopd compared to 20,584 in July. The decrease in WI production in August is due to temporary halting of test production from the Tawke field. The lower production in Yemen in August is primarily due to 3 days shut in for regular maintenance and an update to the CPF at the Nabrajah field in Block 43. The year to date WI production to DNO at end of August was 17,812 bopd, which is well ahead of plan.
As previously reported the KRG put temporarily on hold all the production for the local market in the Kurdistan Region, to enable the local authorities to review the licensing, compliances and uniformity of procedures applied to the small topping plant owners in order to regulate the manner that crude oil is supplied to them, including crude oil pricing issues and the quality of the products generated by the topping plants. During this period, DNO has installed pressure gauges for recording of updated static pressure information across the field. In addition pressure gauges have also been installed in new wells for monitoring pressure development during the next stage of test production. This will provide important information for the long term production potential as well as production sustainability of these wells.
The next stage of test production from Tawke has now resumed, and the volumes produced will be lifted by KRG who will also process the crude oil for local needs. Future reporting of test production to the Company from Tawke or any other fields, will be based on revenue entitlements rather than volumes, as test production does not reflect the normal operational performance or production capacity of the fields.
Working Interest (WI) Production.
DNO's oil production (WI) is reported as follows:
(Bopd) Q1 2008 *) Q2 2008 July 2008 Aug 2008 YTD 2008 Yemen 10,369 9,924 9,393 8,337 9,821 Kurdistan/Iraq 7,083 10,228 11,191 11 7,991 Total 17,452 20,151 20,584 8,349 17,812
*) As part of the change in Tawke PSC terms DNO was entitled an additional volume of 82,558 barrels produced from start of production in June 2007 until 12th March 2008. This additional volume was booked in 1st quarter 2008
Net entitlement (NE) Production and Achieved Oil Price
Net entitlement production is shown in the table below:
(Bopd) Q1 2008 Q2 2008 July 2008 Aug 2008 YTD 2008 Yemen 7,320 5,979 5,416 4,810 6,259 Kurdistan/Iraq 7,083 6,830 7,457 8 6,138 Total 14,403 12,809 12,873 4,818 12,397
The production figures (WI and net entitlement) include crude oil consumed in the operation of the Company's production facilities, at an accumulated volume of 309 bopd during August.
SUMMARY OF ONGOING DRILLING ACTIVITIES
YEMEN
Block 32
Rig 905 was moved from block 47 to block 32, to drill the Tasour #17S development well. The well did not encounter hydrocarbons, and the well was subsequently plugged and abandoned. The rig was moved to drill Godah #10 development well, which has now been completed as an oil producer.
Block 43
Following the Nabrajah #18 well , Rig 908 was moved to the eastern part of the Block to drill the Suwehed #1 exploration well. The well has now reached its total depth of 1.566 meters. The well penetrated the Qishn target deeper than prognosis and indications of hydrocarbons were encountered in the top of the Qishn reservoir. The well was not tested and further evaluation of the Suwehed structural complex will be undertaken prior to deciding on the drilling of additional wells on this structure.
Block 47
On the Yaalen #1 discovery well, the test programme was completed and the well was temporarily abandoned 29 August 2008. Oil was confirmed by wire line fluid sampling both in Yaleen # 1 and Yaleen # 2. However, due to inconclusive test results from both these wells, the Yaleen area will be re-evaluated after completing a 3-D seismic survey. Contingent on the results from this evaluation re-entry of the wells for further testing will be considered. The Rig 900 has now been re-located to block 53 to undertake work over operations.
As previously reported the Sharnah # 1 exploration well, which was drilled on another structure in Block 47, flowed 600 bopd during testing and was thereafter completed as a potential future production well. Block 53
Rig 919 drilled and completed the Bayoot #6 exploration well 17 June to 29 August 2008. The well encountered oil in the Basement and has been completed as an oil producer. The rig was then moved to the Raoq #1 exploration well location, to drill a different Basement structure to the south of the Bayoot area.
KURDISTAN REGION OF IRAQ
Tawke PSC area
The Sindy rig completed the Tawke # 10 appraisal well as a future oil producer, after which the rig was moved to Tawke #9 well location. The Tawke #9 well was spudded 23 August 2008. The well is now completed as a future oil producer, without prior testing.
The Tawke # 15 well is being drilled as a combined Cretaceous delineation well and Jurassic/Triassic exploration well. Drilling has taken longer than planned and the well is expected to penetrate the Jurassic interval during the coming weeks.
Erbil PSC Area
The Hawler #2 well is primarily targeting Jurassic and Triassic intervals to further explore the oil discovery in Hawler #1 well. A 7" liner is now installed into the Jurassic interval which produced 9,000 bopd from a test in Hawler # 1. The forward plan is to further deepen the well into the lower Jurassic and Triassic intervals, and then temporarily abandon the well. As the reservoir pressure is likely to by higher than originally expected equipment with higher pressure rating is required. Therefore testing of the well is planned to be undertaken at a later stage.
The 3-D survey across the Hawler structure has now been completed. This together with the well results will form the basis for the evaluation of the resource potential and the forward plans for the Hawler oil discovery.
It should be noted that the name "Hawler" is likely to be replaced with another name for this structure in the future, but the new name is yet to be decided.
MOZAMBIQUE
Inhaminga block
The Sangussi #1 exploration well was spudded on 4 July 2008. The well reached the planned total depth without encountering hydrocarbons and the rig was released from DNO. Further technical work and prospect evaluation is currently undertaken to investigate additional prospects potential within this large Block.
DNO International ASA 25th September 2008
Contact:
Media: Helge Eide, MD DNO ASA Telephone: +47 23 23 84 80 Lars Erik Lund, Crux Communication Telephone +47 930 36 866 (Norway) Ben Willey, Buchanan Communications Telephone: +44 207 466 5000 (UK)
