DNO eyes Iraq export license after Q2 tops fcast

OSLO, Aug 20 (Reuters) - Norwegian oil and gas producer DNO (DNO.OL) reported a smaller-than-expected fall in second quarter operating profit and repeated that production would increase sharply once it gains the right to export Iraqi oil.

Earnings before interest and tax fell to 125 million crowns ($23.06 million) in April-June from 185 million a year ago.

A Reuters survey of nine analysts predicted a fall to 110 million crowns, with forecasts ranging from 81 million to 141 million, due to decreasing production in Yemen and rising costs.

Unlike most of its peers, DNO did not take full advantage of high global oil prices because it sells the bulk of its oil on local Iraqi markets where prices are lower.

"DNO will face a step change in production volumes once export of oil from the Tawke field (in northern Iraq) is permitted. Until then, DNO expects the working interest production to remain stable," DNO said in a statement.

"Based on the discoveries made during the first six months combined with the exploration programme going forward, the company expects to see a further growth in the reserves and resources during 2008."

DNO has repeatedly said that it expects to win an export license from Iraq sometime during 2008.

DNO earlier said its net entitlement production amounted to 12,809 barrels of oil equivalent per day in the second quarter. (Reporting by Oslo newsroom)