JWing
02-16-2011, 08:56 AM
Wed Feb 16, 2011 10:59am GMT
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* 50,000 barrels-a-day "test production", no pay terms yet
* Q4 operating profit NOK 87 million vs 100 mln forecast
* Local sales, share issue swell cash horde
* Shares down 2.2 percent on flat Oslo bourse
(Adds details, quotes, background, shares)
By Walter Gibbs
OSLO, Feb 16 (Reuters) - Norwegian oil company DNO (DNO.OL: Quote (http://af.reuters.com/stocks/quote?symbol=DNO.OL)) said it has boosted exports from Iraqi Kurdistan to a test level of 50,000 barrels a day as it waits for Iraqi leaders to rule on its disputed contract, the key to its near-term prospects.
Chief executive Helge Eide said commercial terms for longer-term production at the expanded level -- from 10,000 earlier this month -- remain to be agreed as political factions in Iraq continue to debate whether DNO and other Kurdish producers should own part of the reserves.
"It is a very important priority for us to ramp up and fully utilise our production capacity," Eide said of DNO's key Tawke field in Kurdistan after announcing fourth-quarter results short of expectations, sending the stock lower.
DNO produces oil and gas in just two countries, Iraq and Yemen, with most of its net entitlement production in Iraqi Kurdistan.
DNO announced earlier this month it had begun test production at Tawke of 10,000 barrels a day. [ID:nLDE7120AH]
The increase was a sign of DNO's confidence Iraq's national government will eventually honour the production-sharing contract the company signed with Kurdish regional authorities, Arctic Securities analyst Trond Omdal said. "They are not being paid yet but they assume they will be," he said.
Top Iraqi officials have sent conflicting signals in recent weeks, shedding little light on the terms under which oil exporters like DNO will operate. [ID:nLDE71619W]
DNO was a trail-blazer in post-Saddam Iraq, but without permission to export the company's production has been restricted to fluctuating amounts sold locally at a discount.
Operating profits for the fourth quarter came to 87 million Norwegian crowns ($15 million), compared with 100 million crowns forecast by analysts in a Reuters poll and 75 million crowns in operating losses DNO racked up in the 2009 period.
"The revenues were in line but expenses were a little above due mainly to higher administration costs," said Marius Gaard, analyst at Carnegie. "It looks like a number of one-off items."
The company added 460 million crowns in cash in the fourth quarter from sales and a private stock placement. That brought DNO's cash to 1.4 billion crowns, which Eide said would be used for exploration and "additional opportunities that could materialise".
Shares in DNO were down 2.2 percent at 1020 GMT while the Oslo bourse's main index was down 0.2 percent.
http://af.reuters.com/article/energyOilNews/idAFLDE71F0Z120110216?sp=true
Print (http://af.reuters.com/articlePrint?articleId=AFLDE71F0Z120110216) | Single Page
[-] Text [+]
* 50,000 barrels-a-day "test production", no pay terms yet
* Q4 operating profit NOK 87 million vs 100 mln forecast
* Local sales, share issue swell cash horde
* Shares down 2.2 percent on flat Oslo bourse
(Adds details, quotes, background, shares)
By Walter Gibbs
OSLO, Feb 16 (Reuters) - Norwegian oil company DNO (DNO.OL: Quote (http://af.reuters.com/stocks/quote?symbol=DNO.OL)) said it has boosted exports from Iraqi Kurdistan to a test level of 50,000 barrels a day as it waits for Iraqi leaders to rule on its disputed contract, the key to its near-term prospects.
Chief executive Helge Eide said commercial terms for longer-term production at the expanded level -- from 10,000 earlier this month -- remain to be agreed as political factions in Iraq continue to debate whether DNO and other Kurdish producers should own part of the reserves.
"It is a very important priority for us to ramp up and fully utilise our production capacity," Eide said of DNO's key Tawke field in Kurdistan after announcing fourth-quarter results short of expectations, sending the stock lower.
DNO produces oil and gas in just two countries, Iraq and Yemen, with most of its net entitlement production in Iraqi Kurdistan.
DNO announced earlier this month it had begun test production at Tawke of 10,000 barrels a day. [ID:nLDE7120AH]
The increase was a sign of DNO's confidence Iraq's national government will eventually honour the production-sharing contract the company signed with Kurdish regional authorities, Arctic Securities analyst Trond Omdal said. "They are not being paid yet but they assume they will be," he said.
Top Iraqi officials have sent conflicting signals in recent weeks, shedding little light on the terms under which oil exporters like DNO will operate. [ID:nLDE71619W]
DNO was a trail-blazer in post-Saddam Iraq, but without permission to export the company's production has been restricted to fluctuating amounts sold locally at a discount.
Operating profits for the fourth quarter came to 87 million Norwegian crowns ($15 million), compared with 100 million crowns forecast by analysts in a Reuters poll and 75 million crowns in operating losses DNO racked up in the 2009 period.
"The revenues were in line but expenses were a little above due mainly to higher administration costs," said Marius Gaard, analyst at Carnegie. "It looks like a number of one-off items."
The company added 460 million crowns in cash in the fourth quarter from sales and a private stock placement. That brought DNO's cash to 1.4 billion crowns, which Eide said would be used for exploration and "additional opportunities that could materialise".
Shares in DNO were down 2.2 percent at 1020 GMT while the Oslo bourse's main index was down 0.2 percent.
http://af.reuters.com/article/energyOilNews/idAFLDE71F0Z120110216?sp=true