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DNO optimistic about future in Iraq

Company raises production estimate after taking steep revenue loss for 2015.

By Daniel J. Graeber
DNO optimistic about future in Iraq
Norwegian energy company DNO said its finances took a hit last year, but it was still able to boost its reserve estimate in the Kurdish north of Iraq. File Photo by Mohammed al Jumaily/UPI | License Photo

OSLO, Norway, March 18 (UPI) -- Iraqi-focused energy company DNO said its full-year 2015 revenues were down sharply, though its reserve estimate from the region was up 20 percent.

DNO, which focuses on reserve basins in the Kurdish north of Iraq, reported full-year 2015 revenue at $187 million, down 59 percent from the previous year. Capital spending of $51 million was down more than 80 percent to $51 million and the company posted an operating loss of $174 million.

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Companies are posting lower revenues in part because of lower crude oil prices, which dropped 32 percent from year-end 2014 to year-end 2015. Budgetary woes for the Kurdish government and regional security issues added to the stress for companies operating in northern Iraq.

This week, Kurdish-focused Gulf Keystone Petroleum said it may start to see its reserve base decline without more spending as it struggles to cope with the pressure from low oil prices. The company last year said it was looking for partners or potential buyers as part of a long-term strategic review.

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Regional counterpart Genel Energy said full-year 2015 revenue of $344 million was down 34 percent from the previous year.

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DNO, however, said its production was on the rise, increasing 23 percent to 144,500 barrels of oil equivalents per day in 2015. While investments were sharply lower for its Tawke reserve basin in the Kurdish north, the company said it was able to raise its proven oil reserve estimate by about 20 percent to 387 million barrels.

Executive Chairman Bijan Mossavar-Rahmani said the balance meant his company was well positioned compared to its regional peers.

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"We are cautiously optimistic oil prices will recover in the coming months but remain stubbornly resilient if they don't," he said in a statement.

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