DNO ASA posts record $761M Q2 revenue, restarts Kurdistan Tawke output, raises North Sea guidance, and makes 69p/share offer for Genel Energy.
Alpha Score of 44 reflects weak overall profile with moderate momentum, poor value, moderate quality, moderate sentiment.
Norwegian oil and gas operator DNO ASA posted record second-quarter revenue of $761 million, up 21% from the first quarter, the company said Wednesday. Strong North Sea production sold at elevated commodity prices more than offset the impact of a production shutdown at its Kurdistan operations.
Operating profit rose 55% to $439 million. Net profit climbed 65% to $83 million. Net production averaged 88,400 barrels of oil equivalent per day. North Sea assets contributed 84,900 boepd. Kurdistan and West Africa combined for 3,500 boepd.
Kurdistan and the Tawke License
DNO halted production and drilling on its operated Tawke license in late February following U.S.-Israeli air strikes against Iran. The company took the step as a precautionary safety measure. Limited field operations restarted April 9 with workovers on existing wells and the relaunch of an eight-well drilling campaign. DNO began producing from the Tawke field on June 28 and from the Peshkabir field on July 11.
The company expects output at the Tawke license to stabilize at roughly pre-shutdown levels, assuming no adverse security developments. DNO currently sells its entitlement oil from Kurdistan at prices in the mid-to-upper $30s per barrel while it continues to seek access to export markets or better prices.
DNO holds a 75% stake in the Tawke license. A subsidiary of Genel Energy plc holds the remaining 25%.
North Sea Guidance Raised
With the bulk of annual maintenance completed and new developments onstream, DNO raised its 2026 North Sea production guidance to 85,000 boepd. That is 3,000 boepd above the projection at the start of the year. DNO said its largely unhedged North Sea production captured the upside from high oil and gas prices driven by the ongoing Middle East crisis.
"We're unhedged, but not unhinged by market turmoil," Executive Chairman Bijan Mossavar-Rahmani said. "We'd gladly trade a little excitement for greater price stability and improved security in Kurdistan. In the meantime, our North Sea assets are hitting on all 12 cylinders."
Indicative Offer for Genel Energy
On August 7, DNO announced a possible offer to acquire Genel Energy plc. The indicative offer of 69 pence per share represents a 38% premium to Genel's closing price on August 6. DNO described the proposal as a liquidity event for Genel shareholders, providing an opportunity to receive cash against a backdrop of poor trading liquidity in Genel shares. Alternatively, Genel shareholders may elect a combination of cash and newly issued DNO shares valued at the same amount.
"This is a compelling proposal for Genel shareholders," Mossavar-Rahmani said. "Rather than resisting a generous offer, the Genel Board of Directors should make way for a transaction that gives shareholders an immediate premium and the opportunity to come along for the DNO ride, where DNO is a strong, diversified growth-oriented business with an established track record of dividend payments."
DNO's board approved a quarterly dividend of NOK 0.375 per share, payable in September, maintaining the same level as the previous four quarters.
A videoconference call with executive management is scheduled for 10:00 CET Wednesday.
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