DNO Beats Forecasts with Q3 Operating Profit
Norwegian oil firm DNO said on Thursday third-quarter earnings beat forecasts, helped by higher oil prices and rising output in the Kurdistan region of northern Iraq.
The region's largest international oil producer posted a third-quarter operating profit of $71 million, above expectations of $64 million in a Reuters poll of analysts.
Operating profit in the same quarter a year ago stood at $469 million, boosted by one-time recognition of a $556 million settlement with Iraq's Kurdistan Regional Government (KRG) for overdue oil export payments.
DNO's working interest production in the quarter stood at 81,526 barrels of oil equivalent per day (boed), up from 76,999 (boed) a year ago.
The company has a 75 percent interest in the Tawke licence which includes Tawke and Peshkabir fields in northern Iraq. It also produces oil in Oman.
London-listed Genel Energy (GEGYF) holds the remaining 25 percent in the Tawke licence.
DNO said it expected to end 2018 with operated production of at least 130,000 boed, representing about one third of all oil exports from Iraqi Kurdistan, up from 117,600 in the third-quarter.
The company said in October that output at the Peshkabir field had increased to 50,000 boed, meeting a target for the end of 2018 ahead of schedule.
The market is waiting for exploration results at the DNO-operated Baeshiqa licence, in which DNO and Exxon Mobil (XOM) each hold 32 percent. Turkish Energy Company and KRG have 16 and 20 percent respectively.
DNO drilled its first well in the licence area in October, and plans to drill another one in December and a third in 2019.
"We know that the licence is located in a highly prolific area ... We do not rule out that Baeshiqa may be the next Peshkabir," Teodor Sveen-Nilsen at Sparebank 1 Markets said in a note.
The firm also holds 28.22 percent stake in Faroe Petroleum , which has stakes in licences off Britain and Norway.
DNO said it planned to drill at least five exploration wells in Norway in 2019, where it currently has no production.
DNO's share price is up 63 percent over the past year, outperforming a European oil and gas index up 6 percent over the same period.
(Reporting by Ole Petter Skonnord and Nerijus Adomaitis; Editing by Sunil Nair and Edmund Blair)