DNO ASA, the Norwegian oil and gas operator, today reported a doubling of net profit to USD 35 million on revenue of USD 137 million in the second quarter of 2024. Net production rose six percent to 79,400 barrels of oil equivalent per day (boepd), of which Kurdistan contributed 59,800 boepd, North Sea 16,300 boepd and West Africa 3,300 boepd.
At the end of the quarter, the Company held cash deposits of USD 943 million and net cash of USD 158 million. The Board of Directors aims for sustainable dividends. On the back of solid results, a strong balance sheet and outlook, the Board has authorized a dividend payment of NOK 0.3125 per share in August 2024, up 25 percent from prior quarterly distributions, pursuant to the authority granted it by the Shareholders at the 2024 Annual General Meeting.
DNO increased spending in Kurdistan during the quarter to optimize production from existing wells at the flagship Tawke license (DNO 75 percent and operator), raising gross output from the Tawke and Peshkabir fields to an average of 83,500 boepd in the first half of the third quarter, up five percent from the second quarter and nine percent from the first quarter of 2024. To help address natural field decline, in addition to placing previously drilled wells into production, DNO prepares to mobilize a rig to drill the first new well on the license since early 2023.
| Q2 2024 | Q1 2024 | Full-Year 2023 | |
| Gross operated production (boepd) | 79,783 | 76,310 | 46,500 |
| Net production (boepd) | 79,415 | 74,772 | 52,566 |
| Revenues (USD million) | 137 | 183 | 668 |
| Operating profit/-loss (USD million) | -3 | 61 | 218 |
| Net profit/-loss (USD million) | 35 | 17 | 19 |
| Free cash flow (USD million) | 16 | 44 | -87 |
| Net cash/-debt (USD million) | 158 | 171 | 153 |
On its other operated license in Kurdistan, Baeshiqa (DNO 64 percent), a 72-day testing program has commenced on the newly drilled B-3 well.
“We are not realizing full value for our Kurdistan barrels with the shutdown of the Iraq-Türkiye export pipeline, now twisted into a Gordian knot,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani. “Until the knot is cut, we will compensate by spending more to produce more and by requiring payments in advance to our international bank accounts,” he added.
Meanwhile, in the second quarter the Company announced a discovery in the North Sea on the Cuvette prospect (DNO 20 percent), DNO’s eighth discovery since 2021 in the highly prolific area surrounding the Troll and Gjøa production hubs. The other discoveries are Røver Nord, Kveikje, Ofelia, Røver Sør, Heisenberg, Carmen and Kyrre, all close to infrastructure and with clear routes towards commercialization.
Even as it works to bring new discoveries on stream, the Company is adding to its current North Sea production through acquisitions. In the second quarter, DNO completed the purchase of a 25 percent stake in UK’s Arran field and announced the bolt-on acquisition of Norne area assets in Norway expected to close in the third quarter of 2024.
To prepare for investments across its portfolio, including acquisitions, the Company issued a new USD 400 million five-year bond with coupon rate of 9.25 percent to supplement an existing bond with a remaining balance of USD 350 million. The offering was significantly oversubscribed and achieved a lower credit spread than previous DNO bonds, reflecting DNO’s strong financial position and outlook as well as flawless bond track record of 18 issues over the past 23 years.
