DNO ASA, the Norwegian oil and gas operator, said it was given an interest in Iraq’s Tawke licence by Kurdistan Regional Government (KRG) as well as a small share in its gross licence revenues to settle all outstanding revenues for the company’s crude deliveries.
KRG gave DNO a 20 per cent interest in Tawke, pushing the Norwegian firm’s total stake to 75 per cent for the license containing the Tawke and Peshkabir fields.
These have combined proven and probable reserves in excess of 500 million barrels and production in excess of 100,000 barrels of oil per day, the exploration and development company said in a statement.
DNO will also receive three percent of gross license revenues each month from KRG over a five-year period as part of the settlement, effective August 1.
The Norwegian firm has settled all outstanding Tawke license receivables from KRG and the Government has exercised its Tawke license audit rights to its satisfaction for the period up to the effective date and has no adjustment claims.
The government has also discharged DNO from certain payment obligations including production bonuses, license fees and a US$150 million water purification project that is no longer required by the government.
The removal of these liabilities and the transfer to DNO of the 20 percent interest and the right to the three percent revenue stream will support the company's balance sheet and future cash flow, DNO said.
"We are very pleased with the government's initiative to settle receivables and normalise export payments to the operators," said Bijan Mossavar-Rahmani, DNO's Executive Chairman. "This sends a strong positive signal to investors and helps restore confidence in Kurdistan's oil sector," he added.
DNO's June-July 2017 outstanding invoices for Kurdistan exports will continue to be paid under the payment arrangement in place since January 2016.