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Gulf Keystone suitor DNO expands operations in Kurdistan

Wednesday, October 12, 2016 1:25
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DNO ASA has now completed three of four new wells at the Tawke field in the Kurdistan region of northern Iraq.

The programme is budgeted at US$20mln and it is expected to deliver an additional 10% of output capacity.

The latest well, Tawke-31, is due to come online following the completion of an acid stimulation programme, and the Tawke-33 and Tawke-34 are also being readied for production.

A fourth well, Tawke-37, is due to spud next week.

A separate appraisal programme, west of the main Tawke operation, saw the Peshkabir-2 well spud earlier this month to test a Jurassic reservoir and explore the deeper Cretaceous horizon.

Tawke is a major contributor to Kurdistan’s crude exporting operation, though the situation surrounding payment arrangement remains a key consideration for DNO as it mulls investment in the field.

The drill programme, which is coming to an end, was sanctioned by DNO earlier this year on the back of monthly export payments from the Kurdistan Regional Government.

DNO today noted: “Plans to engage a third drilling rig were dropped in September though the company expects to re-start investments to boost production to a targeted level of 135,000 barrels of oil per day (bopd) following the resumption of regular and predictable payments.”

Tawke produced some 109,159 barrels of oil per day in the third quarter of 2016, and almost all those barrels were delivered for export.

DNO, an Oslo listed oil company focussed on the middle east, recently made a tilt for Gulf Keystone Petroleum Ltd (LON:GKP) with a ‘low ball’ US$300mln offer ahead of the group’s restructuring.

GKP is in the process of enacting a debt-for-equity swap that will reduce indebtedness by US$500mln, but leave previous shareholders as a small minority.

That said, equity holders collectively staked a further US$25mln in a concurrent funding which will provide fresh capital to restart investment in GKP’s flagship Shaikan field, where it a

Experts said the new investment in the company was most likely driven by speculation that GKP could receive improved or competing offers once its financial position is secure.

Story by ProactiveInvestors


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