Page 17 - MEOG Week 19

MEOG ProjeCts & ComPanIes MEOG
next steps towards further appraisal and assess- ment of commerciality. additionally, a third well on the license will spud mid-month, with its pri- mary target a shallower Jurassic formation on a separate structure (Zartik).
Meanwhile, the Peshkabir-to-Tawke gas capture, transport and reinjection project to effectively end CO2 emissions at Peshkabir (and therefore in DNO’s Kurdistan operations) and boost oil recovery at Tawke is completed and undergoing commissioning.
To achieve budget reductions, DNO has deferred most discretionary drilling and capital projects across the portfolio and continues to identify and capture cost savings. In the United Kingdom, no drilling is planned and the balance of the Schooner and Ketch decommissioning program has been suspended and deferred to 2021/2022.
The Company has renegotiated service con- tracts for savings and extended payment terms where it operates, and is in continuous discus- sions with partners in the North Sea to reduce operating and other costs and defer non-critical projects where it does not operate.
DNO’s 2020 North Sea drilling campaign has been scaled back and wells deferred, but firm plans remain in place for wells in five licenses over the balance of the year, including two exploration, one appraisal, two infill and two
development/geopilot wells.
To further strengthen its cash position, the
Company has also drawn USS 115 million from its reserve-based lending facility to fund North Sea operations and has suspended its dividend program.
Last month, DNO received US$ 90 million for Kurdistan oil exports, not included in the end of first quarter cash balances.
Entitlement and override payments for November 2019 through February 2020 (total US$ 233 million) remain outstanding, which the Kurdistan regional Government has pro- posed to defer together with override payments commencing March 2020, given the deteriora- tion of its own fiscal position with the collapse in oil prices.
DNO is following up to agree acceptable terms for such deferment and also timing of payments of the sums in arrears.
“One of the first to hit the brakes, DNO is positioned to be one of the first to press down on the accelerator with signs of sustained market recovery, notably through short-cycle drilling in Kurdistan,” said Bijan Mossavar-rahmani, DNO’s Executive Chairman.
“Lifting costs below US$ 5 per barrel in Kurd- istan give DNO [a] competitive advantage when oil prices are weak and strong cash flow when oil prices recover,” he added.™
Week 19 13•May•2020 w w w . N E W S B A S E . c o m P17