DNO Q3 down as expected, eyes production surge
OSLO, Nov 12 (Reuters) - Norwegian oil and gas producer DNO International (DNO.OL) posted a fall in third quarter operating profit due to a temporary shutdown of its Iraqi field and said that it was preparing to increase production going forward.
Earnings before interest and tax fell to 27 million crowns ($3.93 million) in July-September from 150 million a year ago, in line with a mean forecast of 26 million from a Reuters survey of nine analysts.
"After several years with high exploration activities adding new reserves and resources...we are now facing a period with the focus more towards increased production and near term developments," Chief Executive Helge Eide said in a statement.
"This will change the balance between exploration and production activities within DNO and we are now positioning the company to deliver growth in production going forward."
DNO, the first foreign firm to drill in Iraq following the U.S.-led invasion in 2003, has repeatedly said that it expects to boost production once it gains an export license from Iraq. It has said the timing of the licence would be "during 2008".
DNO's prized Tawke field in north Iraq was shut in August by Kurdish authorities to "review" operations of a topping plant.
DNO said it had agreed with the Kurdistan authorities amendments to its production sharing contracts (PSC), boosting the Tawke area to include another prospect increasing DNO's working interest by 15 points to 55 percent in this prospect.
"In return, DNO will pre-relinquish most of the Dohuk area," it said. "Incurred petroleum costs to date from the Dohuk area will be transferred to the Tawke PSC and will be recovered from the Tawke production." (Reporting by Wojciech Moskwa)
