DNO, which is controlled by UAE’s RAK Petroleum and is listed on the Norwegian bourse, now holds a 75 percent operated stake in the license containing the Tawke and Peshkabir fields.
In addition to the 20 percent interest, the company will also receive three percent of gross license revenues each month from the Kurdistan regional government over a five-year period, DNO said.
The settlement agreement, which took effect on August 1, 2017, also affects Genel Energy who holds a 25 percent stake in the Tawke license. Genel will receive a higher share of revenue, at 4.5 percent, from oil sold in the Tawke field.
Both companies will no longer make further claims regarding the Tawke license receivables, the Kurdish regional government’s natural resources ministry said in a separate statement.
DNO said the transfer of the 20 percent interest in the Tawke and Peshkabir oilfields, which have a combined proven and probable reserves in excess of 500 million barrels and production in excess of 100,000 barrels of oil per day, plus the three percent revenue stream would improve the company’s balance sheet and cash flow.
“We are very pleased with the government’s initiative to settle receivables and normalize export payments to the operators,” Bijan Mossavar-Rahmani, the Executive Chairman of DNO, said. “This sends a strong positive signal to investors and helps restore confidence in Kurdistan’s oil sector.”
Meanwhile, DNO said first-half revenues were up 43 percent to $158.4 million from $110.8 million during the same period in 2016 following $181 million in export payments from the Kurdish regional government.
The company’s cash balance rose $120 million during the first six months to $381 million and its net debt went down to $19 million.
Programmed capital expenditures for 2017 have been increased to $130 million, up from the guidance set earlier this year of $100 million.