Category: DeGolyer & MacNaughton

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DNO Updates Oil Reserves

By John Lee.

DNO ASA, the Norwegian oil and gas operator, today announced it exited 2021 with 321 million barrels of oil equivalent (MMboe) of net proven and probable (2P) reserves, notwithstanding production of 34 MMboe during the year. The Company’s 2P reserves life stood at 9.3 years. Combined with contingent (2C) resources of 189 MMboe, DNO’s reserves and resources life stood at 14.8 years.

Of the total, the Company’s Kurdistan portfolio accounted for 267 million barrels of oil (MMbbls) of net 2P reserves compared to 295 MMbbls in 2020, and 71 MMbbls of net 2C resources compared to 27 MMbbls at yearend 2020.

Across its North Sea portfolio at yearend 2021, DNO’s net 2P reserves stood at 54 MMboe compared to 64 MMboe a year earlier. 2C resources totaled 113 MMboe compared to 120 MMboe at yearend 2020.

Effective from 2021, the Company reports its net production, reserves and resources based on the participation interest in all of its licenses. Prior to 2021 and for the licenses governed by Production Sharing Contracts, the Company reported its net figures after royalty and included DNO’s additional share of cost oil covering its advances towards the government carried interest (if any) as well as volumes attributed to the three percent of gross Tawke license production under the August 2017 Receivables Settlement Agreement. The main reason for the change is to improve comparability with peer companies and to show the Company’s share of production before the government take.

International petroleum consultants DeGolyer and MacNaughton carried out an independent assessment of the Tawke and Baeshiqa licenses in Kurdistan. Gaffney, Cline & Associates carried out an independent assessment of DNO’s licenses in Norway and the United Kingdom.

Full report here.

(Source: DNO)

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Genel Energy Updates on Oil Reserves

Genel Energy has issued an update on oil reserves and resources across its portfolio.

Bill Higgs (pictured), Chief Executive of Genel, said:

“The quality of our reserves is the foundation of our resilient business model, providing us with low-cost production that can generate cash for many years to come.

“Drilling at Sarta this year has the potential to add to our reserves, with Qara Dagh adding the possibility of opening up another field in the Kurdistan Region of Iraq, as we look to further build our cash generative portfolio for the benefit of all stakeholders.“

Net oil reserves (MMbbls) 1P 2P 3P
31 December 2019 68.8 123.8 194.9
Production (11.7) (11.7) (11.7)
Technical revisions 12.2 5.0 (6.0)
31 December 2020 69.4 117.2 177.2

International petroleum consultants DeGolyer and MacNaughton assess that, at the Tawke field on the Tawke licence (Genel 25% working interest), gross year-end 2020 1P reserves stood at 173 MMbbls, compared to 176 MMbbls at year-end 2019, after adjusting for production of 21 MMbbls and an upward technical revision of 18 MMbbls. Tawke field 2P reserves stood at 245 MMbbls (261 MMbbls at end-2019) and 3P reserves at 359 MMbbls (376 MMbbls at end-2019).

The Enhanced Oil Recovery project at the Tawke field has started to deliver a positive impact on production. Pending further work on the project, the 23 MMbbls of 2P and 45 MMbbls of 3P gross reserves that DeGolyer and MacNaughton previously included in their figures continues to be maintained by Genel in 2C and 3C resources.

At Peshkabir, also on the Tawke licence (Genel 25% working interest), year-end 2020 gross 1P reserves were assessed at 61 MMbbls (51 MMbbls at end-2019), 2P reserves at 116 MMbbls (125 MMbbls at end-2019) and 3P reserves at 201 MMbbls (220 MMbbls at end-2019). The upward revision of 1P and 2P reserves by 29 MMbbls more than offsets production of 19 MMbbls, and is the result of continued outstanding field performance in 2020.

At Taq Taq (44% working interest, joint operator), 1P gross reserves stood at 18 MMbbls at year-end 2020 (20 MMbbls at end-2019), following a minor technical upward revision of 1 MMbbls and production of 4 MMbbls. Gross 2P reserves stood at 33 MMbbls (44 MMbbls at end-2019), with a downward revision of 8 MMbbls following a reduction to the number of wells planned for the future, and their associated expected productivity. McDaniel & Associates carried out the independent assessment of the Taq Taq licence.

Genel’s gross 2P reserve estimate relating to Phase 1A of the Sarta development remains unchanged at year-end 2020, standing at 34 MMbbls.

CONVERTING RESOURCES TO RESERVES

Net oil resources (MMbbls) 1C 2C 3C
31 December 2019 66.5 152.0 345.8
Technical revisions (8.6) (8.6) (8.0)
31 December 2020 57.9 143.4 337.8

There has been no change to the ERCE view on Sarta (30% working interest), with an estimated mid-case total recoverable oil resource of 593 MMbbls, of which 258 MMbbls are classified as 2C resource. Production performance in 2021, and the results of the upcoming three well campaign in 2021, will inform the quantity of conversion of these resources into reserves.

At Qara Dagh (40% working interest, operator) the QD-2 well will test the crestal portion of the prospect, which has a mean prospective resource estimated by Genel at c.400 MMbbls. Genel continues to estimate that the downdip segment tested by the QD-1 well defines a 2C resource of 47 MMbbls.

(Source: Genel Energy)

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DNO Adds New Oil Reserves

DNO ASA, the Norwegian oil and gas operator, has announced it replaced 87 percent of 2020 production through additions to its proven (1P) reserves notwithstanding reduced activity in the wake of low oil prices.

In the Kurdistan region of Iraq, the Company replaced 111 percent of last year’s production through additions to 1P reserves.

Yearend 2020 Company Working Interest (CWI) 1P reserves totaled 201 million barrels of oil equivalent (MMboe) compared to 206 MMboe at yearend 2019, after adjusting for 35 MMboe of production and 30 MMboe of upward technical revisions.

DNO exited the year with 332 MMboe of CWI proven and probable (2P) reserves and 507 MMboe of CWI proven, probable and possible (3P) reserves. DNO’s CWI contingent (2C) resources stood at 152 MMboe.

At yearend 2020, DNO’s 1P reserves life stood at 5.8 years, its 2P reserves life at 9.6 years and its 3P reserves life at 14.6 years; all were up slightly from 2019 levels.

On a gross basis, yearend 1P reserves at the Tawke license in Kurdistan containing the Tawke and Peshkabir fields climbed to 234 million barrels of oil (MMbbls) from 228 MMbbls a year earlier. Tawke license 2P reserves stood at 394 MMbbls at yearend 2020 (400 MMbbls in 2019) and 3P reserves at 605 MMbbls (641 MMbbls in 2019).

Across its North Sea portfolio at yearend 2020, on a CWI basis, DNO’s 1P reserves stood at 41 MMboe, 2P reserves at 64 MMboe and 3P reserves at 96 MMboe. The Company’s North Sea 2C resources totaled 120 MMboe.

At yearend 2020 and on a gross basis, at the Baeshiqa license in Kurdistan containing two large structures with multiple independent stacked target reservoirs, 2C resources stood at 43 MMbbls, following successful drilling and testing of the exploration Baeshiqa-2 and Zartik-1 wells. No reserves were recorded at the Baeshiqa license at yearend 2020 pending conclusion of the ongoing appraisal activities to determine commerciality.

“All things considered, from a reserves replacement perspective DNO had a stellar year in 2020 notwithstanding the sharp cuts in our spend and the challenges of keeping operations going in the face of Covid restrictions in movement of our people, contractors and supplies,” said Bijan Mossavar-Rahmani, DNO’s Executive Chairman.

International petroleum consultants DeGolyer and MacNaughton (D&M) carried out an independent assessment of the Tawke and Baeshiqa licenses in Kurdistan. Gaffney, Cline & Associates (GCA) carried out an independent assessment of DNO’s licenses in Norway and the United Kingdom.

(Source: DNO)

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DNO Increases Oil Reserves, Shares Rise

Shares in DNO ASA, the Norwegian oil and gas operator, were trading up five percent on Monday afternoon following the company’s announcemnt that it has replaced 2018 production through additions to reserves, marking the second consecutive year in which the Company’s replacement of proven reserves reached or exceeded 100 percent of production.

“DNO’s stellar record of reserves replacement through the drill bit is a result of stepped up spending on our portfolio of quality assets coupled with rapid-fire execution,” said Bijan Mossavar-Rahmani, DNO’s Executive Chairman. “And the barrels we continue to add are among the lowest cost in the industry, anywhere,” he expounded.

Yearend 2018 Company Working Interest (CWI) proven (1P) reserves stood at 240 million barrels of oil (MMbbls), unchanged from yearend 2017 after adjusting for production and technical revisions. On a CWI proven and probable (2P) reserves basis, DNO replaced 98 percent of its 2018 production, exiting the year with CWI 2P reserves of 376 MMbbls (384 MMbbls in 2017).

At 2018 production rates, DNO’s 1P reserves life is 8.2 years and its 2P reserves life is 12.9 years.

Significantly, the Company’s 1P reserves replacement ratio (RRR) has reached or exceeded 100 percent in eight of the past ten years.

On a gross basis, at the Tawke license in the Kurdistan region of Iraq containing the Tawke and Peshkabir fields, yearend 2018 1P reserves stood at 348 MMbbls, unchanged from 2017 after adjusting for production of 41 MMbbls and upward technical revisions of 41 MMbbls. Tawke license 2P reserves stood at 502 MMbbls (513 MMbbls in 2017) and proven, probable and possible (3P) reserves at 697 MMbbls (880 MMbbls in 2017).

Broken down by field, Tawke field gross 1P reserves stood at 294 MMbbls (335 MMbbls in 2017), 2P reserves at 376 MMbbls (438 MMbbls in 2017) and 3P reserves at 477 MMbbls (588 MMbbls in 2017). Peshkabir field gross 1P reserves stood 54 MMbbls (13 MMbbls in 2017), 2P reserves at 126 MMbbls (75 MMbbls in 2017) and 3P reserves at 220 MMbbls (292 MMbbls in 2017).

International petroleum consultants DeGolyer and MacNaughton carried out the annual independent assessment of the Tawke license. The Company internally assessed the remaining licenses in its portfolio.

The 2018 Annual Statement of Reserves and Resources, prepared and published in accordance with Oslo Stock Exchange listing and disclosure requirements (Circular No. 1/2013), is attached and is also available on the Company’s website at www.dno.no.

(Sources: DNO, Yahoo!)

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DNO Increases Oil Reserves, Shares Rise

Shares in DNO ASA, the Norwegian oil and gas operator, were trading up five percent on Monday afternoon following the company’s announcemnt that it has replaced 2018 production through additions to reserves, marking the second consecutive year in which the Company’s replacement of proven reserves reached or exceeded 100 percent of production.

“DNO’s stellar record of reserves replacement through the drill bit is a result of stepped up spending on our portfolio of quality assets coupled with rapid-fire execution,” said Bijan Mossavar-Rahmani, DNO’s Executive Chairman. “And the barrels we continue to add are among the lowest cost in the industry, anywhere,” he expounded.

Yearend 2018 Company Working Interest (CWI) proven (1P) reserves stood at 240 million barrels of oil (MMbbls), unchanged from yearend 2017 after adjusting for production and technical revisions. On a CWI proven and probable (2P) reserves basis, DNO replaced 98 percent of its 2018 production, exiting the year with CWI 2P reserves of 376 MMbbls (384 MMbbls in 2017).

At 2018 production rates, DNO’s 1P reserves life is 8.2 years and its 2P reserves life is 12.9 years.

Significantly, the Company’s 1P reserves replacement ratio (RRR) has reached or exceeded 100 percent in eight of the past ten years.

On a gross basis, at the Tawke license in the Kurdistan region of Iraq containing the Tawke and Peshkabir fields, yearend 2018 1P reserves stood at 348 MMbbls, unchanged from 2017 after adjusting for production of 41 MMbbls and upward technical revisions of 41 MMbbls. Tawke license 2P reserves stood at 502 MMbbls (513 MMbbls in 2017) and proven, probable and possible (3P) reserves at 697 MMbbls (880 MMbbls in 2017).

Broken down by field, Tawke field gross 1P reserves stood at 294 MMbbls (335 MMbbls in 2017), 2P reserves at 376 MMbbls (438 MMbbls in 2017) and 3P reserves at 477 MMbbls (588 MMbbls in 2017). Peshkabir field gross 1P reserves stood 54 MMbbls (13 MMbbls in 2017), 2P reserves at 126 MMbbls (75 MMbbls in 2017) and 3P reserves at 220 MMbbls (292 MMbbls in 2017).

International petroleum consultants DeGolyer and MacNaughton carried out the annual independent assessment of the Tawke license. The Company internally assessed the remaining licenses in its portfolio.

The 2018 Annual Statement of Reserves and Resources, prepared and published in accordance with Oslo Stock Exchange listing and disclosure requirements (Circular No. 1/2013), is attached and is also available on the Company’s website at www.dno.no.

(Sources: DNO, Yahoo!)

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DNO announces Higher Revenues, Profits, Production, Reserves

DNO ASA, the Norwegian oil and gas operator, today released its 2017 Annual Report and Accounts together with its 2017 Annual Statement of Reserves and Resources and reported improvements across key financial and operational metrics.

Annual 2017 revenues climbed to USD 347 million, up 72 percent from year earlier levels. Operating profit totaled USD 521 million, up from USD 6 million in 2016, with the recognition as other income of USD 556 million under the August 2017 Kurdistan Receivables Settlement Agreement.

Excluding the settlement agreement and non-cash impairments, operating profit in 2017 more than doubled to USD 72 million. And notwithstanding a doubling of operational spend to USD 259 million, the Company ended the year with a cash balance of USD 430 million.

Company Working Interest (CWI) production increased to 73,700 barrels of oil equivalent per day (boepd) from 69,200 boepd in 2016 (operated production in 2017 was 113,500 boepd, up from 112,600 boepd in 2016). Lifting costs last year averaged USD 3.6 per barrel of oil equivalent.

Iraqi Kurdistan

DNO’s production continues to be driven by the Tawke field in Kurdistan, where output in 2017 averaged 105,500 barrels of oil per day (bopd).

The adjacent Peshkabir field, brought on stream midyear, contributed another 3,600 bopd to bring total Tawke license production to 109,100 bopd in 2017. The Company plans to bolster production from the license with 10 new wells in 2018.

“We are committed this year to continue to outdrill, outproduce and outperform all other international companies in Kurdistan – combined,” said DNO’s Executive Chairman Bijan Mossavar-Rahmani.

At yearend 2017, DNO’s CWI 1P reserves climbed to 240 million barrels of oil equivalent (MMboe) from 219 MMboe at yearend 2016, after adjusting for production during the year, technical revisions and an increase in DNO’s operated stake in the Tawke license from 55 percent to 75 percent.

On a 2P basis, DNO’s CWI reserves stood at 384 MMboe (up from 368 MMboe) and on a 3P basis, DNO’s CWI reserves stood at 666 MMboe (up from 521 MMboe). DNO’s yearend 2017 CWI contingent resources (2C) were estimated at 99 MMboe, down from 161 MMboe at yearend 2016, following reclassification of certain contingent resources to reserves.

On a gross basis, at yearend 2017, 1P reserves at the Tawke license containing the Tawke and Peshkabir fields totaled 348 MMboe (353 MMboe at yearend 2016) after adjusting for production of 40 MMboe during the year and technical revisions; 2P reserves totaled 513 MMboe (536 MMboe at yearend 2016); 3P reserves totaled 880 MMboe (725 MMboe at yearend 2016) and 2C resources totaled 91 MMboe (211 MMboe at yearend 2016) following reclassification.

International petroleum consultants DeGolyer and MacNaughton carried out the annual independent assessment of the Tawke and Peshkabir fields. DNO internally evaluated the remaining assets.

(Source: DNO)

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Shewashan Output Significantly Below Target

Gas Plus Khalakan (GPK), the sole contractor of the Khalakan PSC in the Kurdistan Region of Iraq, has issued an end-2017 operations update regarding the Shewashan field.

Oil Sales:

Total payments received by GPK for oil sales now amount to $9.0 million representing 190,115 barrels of GPK entitlement oil sold through to the end of September 2017. Sales from  October  to December  has  been  invoiced  through  the  traditional  operating procedures in place with the KRG Ministry of Natural Resources.

Oil Production:

In total, cumulative field production to date exceeds 1,300,000 barrels of oil. Current total field production is 1,000 barrels per day. Total oil production for the 3rd quarter 2017 was 81,207 barrels and 422,027 barrels have been produced in 2017, up to and including 1 December 2017.

These amounts are significantly below that required to meet forecast annual production targets and break-even economics. There are two main reasons for this lower production.

Firstly, water production rates in the Qamchuga formation have limited oil production rates. The Qamchuqa formation is heavily fractured and many of these fractures are connected to the aquifer.

Secondly, production rates from the Shiranish and Kometan reservoirs have been limited, due to these formations having a tight matrix, with their fracture network being not as developed and extensive as in the Qamchuqa reservoir. GPK continues to recomplete the four Shewashan wells to limit water production in the Qamchuga and stimulate the Kometan and Shiranish reservoirs to facilitate greater production rates.

This activity is summarized below:

Shewashan #1:

Current production rate: 350 bopd and <5% water cut from the Qamchuqa reservoir. Recompletion plans include: perforation and acid stimulation of the Kometan reservoir.

Shewashan #2:

Current production rate: 650 bopd and low water cut from the Kometan reservoir. Recompletion plans include:  Larger acid stimulation in the Kometan to increase the production from perforated intervals (45m) and a possible propped hydraulic frac in the Shiranish reservoir which has yet to be tried in the field.