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DNO ASA doubles stake in Baeshiqa licence in Kurdistan

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Oilfield Technology,

DNO ASA has announced that the Kurdistan Regional Government has approved the company’s acquisition of ExxonMobil’s remaining 32% interest in the Baeshiqa licence, doubling DNO’s stake.

In parallel, commerciality has been declared on the licence with plans submitted for fast-track development including early production from previously drilled but suspended wells.

DNO has already demonstrated proof of concept of producing these wells through temporary test facilities, having trucked some 15 000 barrels of 40 degree API and 22 degree API oil for export in 2019 and 2020 from the Baeshiqa-2 and Zartik-1 discovery wells.

Following the transaction, the joint venture comprises DNO as operator with a 64% (80% paying) interest, the Turkish Energy Company (TEC) with a 16% (20% paying) interest and the Kurdistan Regional Government with a 20% carried interest.

"This acquisition and plans for fast-track development underscore our belief in the potential of the Baeshiqa license and more broadly our long-term commitment to Kurdistan,” said Bijan Mossavar-Rahmani, DNO's Executive Chairman. “Once we get the green light from the authorities to proceed, first production will be a matter of months rather than years,” he added.

DNO’s 3204 m discovery well, Baeshiqa-2, tested hydrocarbons to surface from multiple stacked Jurassic and Triassic zones. Two zones flowed naturally at rates averaging over 3000 bpd of light gravity oil each and another averaged over 1000 bpd also of light gravity oil. DNO drilled Zartik-1, the second discovery well, 16 km to the southeast of Baeshiqa-2, to a depth of 3021 m. This well tested hydrocarbons to surface from several Jurassic zones, with one zone flowing naturally at rates averaging 2000 bpd of medium gravity oil.

DNO acquired its first 32% interest and assumed operatorship of the Baeshiqa license from ExxonMobil in 2018. As consideration for both acquisitions DNO has covered ExxonMobil’s share of exploration costs since January 2019 and the seller will receive payment of US$15 million.

In addition to the 327-km2 Baeshiqa license, DNO operates the Tawke license containing the Tawke and Peshkabir fields in Kurdistan. Combined production from these fields averaged 110 300 bpd in 2Q21.

Separately, the Norwegian Petroleum Directorate has granted a drilling permit to DNO Norge AS for well 2/5-15.

Well 2/5-15 will be drilled from the Borgland Dolphin drilling facility in position 56°36'42.42"N and 3°25'55.67"E following plugging and abandonment of wellbores on the Oselvar field before shutting down for DNO in production licence 274.

The drilling programme for well 2/5-15 relates to the drilling of a wildcat well in production licence 006 C. DNO Norge AS is the operator with an ownership interest of 85%. The other licensee is Aker BP ASA (15%). The area in this licence consists of parts of block 2/5. The well will be drilled about 15 km northeast of the Ekofisk field.

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