Oil firm DNO goals to spice up manufacturing within the North Sea by making extra acquisitions within the subsequent 12 months after shopping for British rival Faroe Petroleum earlier this 12 months, its govt chairman mentioned on Wednesday.

Olso-listed DNO produces most of its oil and gasoline within the Kurdistan area of Iraq, however has mentioned it plans to extend manufacturing within the North Sea to 50,000 barrels of oil equal (boepd) by 2021 from round 18,000 boepd within the first quarter.

DNO’s Executive Chairman Bijan Mossavar-Rahmani advised a information convention the corporate anticipated probably the most development to come back from new acquisitions of manufacturing property moderately than the natural development, regardless of excessive costs for North Sea property.

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“There are sufficient property available on the market in Norway… We will pay the total value if the alternatives make strategic sense. I’m assured we are going to get there,” he mentioned.

To obtain that, DNO mentioned it might use proceeds from a deliberate bond subject to refinance present DNO and Faroe bonds, and to have extra flexibility in executing its development technique.

The firm additionally mentioned it aimed to extend stakes in its present licenses on the Norwegian continental shelf to 30-50 % and to tackle extra operatorships.

DNO’s complete manufacturing within the first quarter rose by 36 % from a 12 months in the past to 107,600 barrels of oil equal per day (boepd) from a 12 months in the past, of which 89,000 boepd have been produced within the Kurdistan area of Iraq.

The firm reported lower-than-expected first-quarter revenue, hit by the influence of low oil costs within the final quarter of 2018 in Kurdistan, sending its Oslo-listed shares down three.eight % within the early buying and selling.

The shares have been down 2.eight % by 1036 CET, underperforming the European oil and gasoline index, which was broadly flat.

DNO acquired Faroe Petroleum in January after elevating its money provide to 160 pence per share to win over reluctant shareholders in a hostile takeover.

The firm mentioned it anticipated full-year income to exceed $1 billion this 12 months based mostly on an estimated oil value at $70 a barrel, up from round $830 million final 12 months, with the North Sea revenues accounting to about 30 % of the full.

DNO plans to extend its complete capital and exploration spending to $440 million in 2019 from $200 million final 12 months, break up between $240 million in Kurdistan and $190 million within the North Sea.

Around 50 % of North Sea capital expenditure in 2019 will go to the Ula and Fenja area developments. The Fenja area is on monitor to begin in 2021 and is predicted to contribute a web 2,600 boepd, DNO mentioned.

Source: uk.reuters.com

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