DNO International ASA today announced its interim results for the first quarter 2008. DNO reported operating revenues of NOK 422 million (NOK 263 million) and a net profit of NOK 62 million (NOK 19 million) in the first quarter 2008.
- We are very pleased with both our operational as well as our financial achievements in the first quarter, and the Company can report strong growth in the financial results resulting in a strengthened cash flow and profitability. Our exploration efforts have resulted in three oil discoveries, all in new areas, which we expect will further increase our resource base at low costs during 2008. - said Helge Eide, Managing Director.
Three oil discoveries were made in the first quarter, all being from exploration wells drilled in new areas. The Hawler #1 exploration well in the Erbil PSC area in Kurdistan Region of Iraq tested 11,000 bopd aggregated from two tests in the Jurassic interval. The first test delivered 9,000 bopd and this rate is expected to be limited by surface test equipment.
In Block 47 in Yemen, the Sharnah #1 well has confirmed oil from recent testing, and the Yaalen #1 well drilled earlier this year will be tested immediately after completion of testing the Sharnah #1 well. In addition the Bayoot SW # 5 appraisal well in Block 53 in Yemen tested 2,500 bopd, increasing the total well production capacity for the Bayoot area to approximately 5,000 bopd.
The total gross delivery from DNO's producing assets was 31,224 bopd, which is four percent ahead of plan. DNO's working interest (WI) production during the first quarter was 17,752 bopd, compared to a guided volume of 16,000 bopd. DNO's WI production from the Tawke field has now been adjusted in accordance with the revised PSC terms, and is different compared to the preliminary reported figures.
During the first quarter DNO's Net Entitlement (NE) production was 14,404 bopd and the achieved oil price was USD 62 per barrel, which is in line with the previously reported figures.
In the first quarter of 2008 DNO's sales increased to NOK 422 million, which is up 60 % compared to the first quarter of 2007. The increase is related to both higher production volumes and higher achieved oil price (NE).
The Company delivered a strong cash flow in the first quarter. The EBITDA increased by 83 percent to NOK 291 million and the netback increased by 65 percent to NOK 232 million, compared to last year.
The first quarter net profit amounted to NOK 62.4 million, compared to NOK 19.0 million in the first quarter last year.
Total exploration expenditure in the first quarter of 2008 was NOK 157 million, compared to NOK 56 million in the first quarter of 2007. Exploration expenditure consists of expensed and capitalized exploration. Expensed exploration costs in the first quarter amounted to NOK 34 million, of which NOK 4 million were dry well costs. The capitalized exploration costs during the first quarter were NOK 123 million.
With a continued high level of exploration drilling throughout 2008 there is a good potential for further growth in reserves and resources to DNO. The Company has not revised the overall guidance for the WI production in 2008 but a reduction in NE production is expected for the year as a result of the revised PSC terms for Tawke. However, once export of oil from Tawke is in place the Company expects to achieve a step change in production volumes.