Earnings call transcript: DNO ASA’s Q3 2025 results show strong growth

DNO ASA reported a significant increase in revenue and profitability in its Q3 2025 earnings call, driven primarily by its North Sea operations. The company returned to profitability with a net profit of $20 million and a revenue surge of 112% from the previous quarter, reaching $547 million. The company’s strategic moves in the North Sea and Kurdistan have positioned it well for future growth, although no immediate stock market reaction data was available.

Key Takeaways

• DNO’s revenue increased by 112% quarter-over-quarter, reaching $547 million.
• The company returned to profitability with a net profit of $20 million.
• North Sea operations contributed 92% of total revenue.
• Cash flow from operations nearly tripled to $407 million.
• DNO completed the acquisition of Swell Energy and ramped up Kurdistan production.

Company Performance

DNO ASA demonstrated robust performance in Q3 2025, largely due to its North Sea operations, which accounted for 92% of its total revenue. The company’s revenue of $547 million marks a 112% increase from the previous quarter, highlighting a strong recovery in the oil and gas market. The strategic acquisition of Swell Energy and increased production in Kurdistan have further bolstered DNO’s market position.

Financial Highlights

• Revenue: $547 million, up 112% from last quarter.
• Operating profit: $222 million, a 100% increase.
• Net profit: $20 million, marking a return to profitability.
• Cash flow from operations: $407 million, nearly threefold increase.
• Investments: $225 million, including $183 million in capital expenditures and $34 million in exploration.

Outlook & Guidance

DNO is targeting an increase in production in Kurdistan to 100,000 barrels per day by the end of 2026. The company is also exploring fast-track development of the Schottkake field, with production expected to start in Q1 2028. DNO plans to continue its growth in the North Sea and explore additional acquisition opportunities while maintaining a conservative balance sheet approach.

Executive Commentary

"We’re going to get to 100,000 barrels gross," stated Chris Spencer, Managing Director, highlighting the company’s ambitious production targets in Kurdistan. Bijan Mossavar-Rahmani, Executive Chairman, emphasized DNO’s strong capabilities, saying, "DNO is great at this. We have great fields. We have great people." He also noted, "Our ambitions for the North Sea are as large as our ambitions for Kurdistan," underlining the company’s dual focus on its key operational regions.

Risks and Challenges

• Potential geopolitical instability in Kurdistan could affect operations.
• Fluctuations in global oil prices may impact profitability.
• Operational challenges in ramping up production to targeted levels.
• Regulatory changes in the North Sea could pose compliance challenges.
• Execution risks associated with new field developments and acquisitions.

Overall, DNO ASA’s Q3 2025 results reflect a strong recovery and strategic positioning in key markets, with a focus on expanding production capabilities and optimizing its asset portfolio.

Full transcript - DNO ASA (DNO) Q3 2025:

Joosten Løvås, Communication Manager, DNO: Good morning and welcome to DNO’s third quarter 2025 earnings call. My name is Joosten Løvås, and I’m the Communication Manager here at DNO. Present with me in Oslo this morning are Executive Chairman Bijan Mossavar-Rahmani, Managing Director Chris Spencer, and outgoing CFO Håkon Sandborg. At first, Bijan will give an introduction. It will be followed by a presentation of the results. After the presentation, we will open up for questions in our usual Q&A session. As always, shareholders first, but analysts are also welcome to ask questions. Press questions, though, will be dealt with afterwards. If you want to ask a question, please raise the tiny virtual hand on top of your screen. When chosen by the organizer, you will be notified on your screen that you are allowed to unmute, after which you will have to remember to unmute yourself too.

With that, I leave the stage to Bijan.

Bijan Mossavar-Rahmani, Executive Chairman, DNO: Joosten, thank you. Good morning, everyone. It’s a pleasure to be back with you in one of these quarterly earnings calls or presentations. We’ve had a very strong quarter, and we’re going to be very pleased to report on it. Again, as Joosten mentioned, answer as best we can any questions that you have. Before I start, I’d like to introduce to you Håkon Sandborg. Introduction to many of you who follow the company. He has been the company’s Chief Financial Officer for the past 24 years. He is, I think, not the oldest DNO employee, but the one who’s been here the longest. He knows the company’s history. He knows the company. He’s seen the company through many periods, many ups and downs, the number of transformations over the past, I think it’s now 53 years, the company, or 53, approaching 54.

As you know, as many of you may know, DNO has been Norway’s oldest oil company, the first to be formed, the first to go on the Oslo Stock Exchange. Through much of that history, all of it, much of it, Håkon has been a major player in the company. He’s decided to step down from his role. It’s been a privilege for all of us, myself especially, to have worked with him in that role. I’ve learned a lot from Håkon, learned a lot about the history of the company, and he’s been a very valuable colleague to me and a leader to the leaders of DNO throughout the period that I’ve been here and prior to my coming here as well. We are sorry to see him go. We wish him well. He’s probably best known outside of DNO for his.

As the person who initiated, led our very successful run on bond markets. That’s not all he’s done here. He’s been involved on the stock side as well, the stock markets and shareholders and analysts. He’s perhaps best known for his stellar record of 21 successful bond raises over this period of time. He mentioned to me that he has raised through these bond raises over these periods $5 billion, which is quite a large number for a company of our size. Thank you again, Håkon, from all of us. We wish you well. I know Håkon wanted to have an opportunity to say goodbye to many of you with whom he’s worked and stayed in touch. I give the floor to Håkon to say those words to you directly.

Håkon Sandborg, Outgoing CFO, DNO: Yeah, thank you. Thank you, Bijan. Thank you for those very kind words. Everything in life has its time. I think now is a good time for me to retire from DNO after 24 years in the company. Also at the age of 67, it’s also a good time to do something else and go on to new chapters in life, is my thinking. Looking back, it’s been a great journey in many ways. I am very proud of all the growth we have achieved and the market value that we have built in the company during these years. I now wish all my colleagues and all our investors the best of luck and continued success and progress staying with DNO. I am very happy to hand over to our new CFO, Birgitte, now taking over after me.

I know she will be doing a very good job. Again, thank you, everybody, and best of luck.

Bijan Mossavar-Rahmani, Executive Chairman, DNO: Thank you. Thank you very much. To continue, I would like to introduce Birgitte to you. We’ve already put out a notice about this transition. I will say a word about Birgitte. Of course, she will deal with the finance part of our presentation this morning and also moving forward. Birgitte Wendel Johansson has come to us from the shipping sector in Norway at a company, Reach Subsea, where she was the Chief Financial Officer. We had a long search process, a deep search. We were able to persuade her to join the company, and she’s hit the ground running. We look forward to many, many years, maybe 24 years to get to a few periods at DNO. I look forward to that. I’m not sure Chris is too, and the rest of us. Welcome to the seat and welcome to the company.

We’ve had a very, very strong quarter in many respects. My colleagues will have a chance to go into detail on those. I’ll be available to add some color and answer questions. I’m very proud of the performance of our teams, both in Kurdistan and in the North Sea. In Kurdistan, we’ve continued to ramp up production. When we last met a quarter ago, we were coming out of the period of damage to our surface facilities in Kurdistan, particularly the Peshkabir field. We were able to ramp up production pretty quickly from zero to, I think we hit 55,000 barrels per day between the Tawke and Peshkabir fields in our last quarterly presentation. I’ve indicated to our team, I was in Kurdistan, I said, "We’re going to have our quarterly presentation. I want to.

Hit the 55,000 barrel a day figure so I can announce that when we meet in Oslo." They jumped to the challenge. They were able to do that for this quarter. We challenged them again. I said, "When I have the presentation on the 6th of November in Oslo, I want to be able to announce that we’ve hit 80,000 barrels a day of production. Up from 55, which is up from zero." 80,000 was where we were before the drone strikes and the damage to the fields. I’m very pleased to say that team has hit the 80,000 barrel a day figure. Chris will go up to detail as to more specifics about that. I’m very, very proud of that team. They do a terrific job.

What DNO does and has done in Kurdistan, no other company needs to even come close. We’re very, very proud of that record and proud of the performance of that team. In the North Sea, we also have a fantastic team. We’ve announced today as part of our release, and then we’ll go into that detail on the slides, about how our team in the North Sea now is similarly getting off the sofa and developing the extensive discoveries that the company has made in the Norwegian Continental Shelf. Again, Chris will go into some details on our joint efforts with a like-minded company, Aker BP, with respect to one of our discoveries, the Schottkake discovery. We’re very pleased, and again, we expect to bring that field on production, to develop it in record time.

We don’t do it as fast in Norway as we do in Kurdistan for many reasons. Most importantly, in Kurdistan, we’re onshore. The lead times are much smaller than they are with an offshore project. We hope to also do in Norway what we’ve done uniquely well in Kurdistan. I expect our next quarter will be even stronger than this quarter, as it’ll reflect some of the more recent developments. I look forward to meeting again with you for our first quarter 2000—I guess fourth quarter 2025 presentation in 2016. Before then, I’ll refer to Chris to go over our operational performance this past quarter with a bit of a look ahead as well.

Joosten Løvås, Communication Manager, DNO: Thank you, Bijan. Good morning from Oslo. We now have our transformational quarter on the back of our transformational acquisition. Highly expected following the hugely important acquisition of Swell Energy, which completed in June. This is the first quarter that you see the full effect of that acquisition, and that runs through all of the numbers that I’ll be covering and Birgitte will be coming into on the financials. Of course, immediate visual impact on the production. We are now up to 115,000 barrels per day from today during Q3. Actually, Q3 will be a relatively weak quarter on the production front, both in the North Sea due to the summer maintenance season, but also in the Kurdistan region because we were recovering from the drone attacks, as Bijan has described. Similarly, the revenue follows the production, obviously.

Even more so for us because the Solar acquisition, of course, is in the North Sea where we have the full exposure to global oil and gas pricing. We got back into the black with a $20 million profit. Operationally, we continue to have success with the drill bit. As we’ll go into in some detail, we are now making great strides in terms of monetizing discovered barrels at a record pace in the North Sea. Happily, all of this allows us to continue making our shareholder distributions the way we’ve been doing for some years now. The increased increase in the quarterly dividend payment that we announced last quarter is maintained. If we go to the next slide, then please, I think that I hope that this slide sets the tone for many quarters ahead in our North Sea.

We talked about this on the back of the acquisition of Swell, that we’re taking a huge step up in the North Sea. We are determined to not only maintain but grow our production in the North Sea over the next few years. We will be doing that by continuing to explore, and we’ve got three wells running at the moment. Importantly, accelerating the development of discoveries into production. At the same time, we’re going to be high-grading and optimizing the portfolio we have. That is a great example of that in the bullet points here, where we’ve done a nice swap transaction with Aker BP. Both companies are very happy with it. For us, we are strengthening in our core area around the Norna FPSO up in the Norwegian Sea and increasing our share of the Vedande field, which is tied back to Norna.

Both of the projects that are coming on in the Anbara one and Vedande are up in that area. The Norna area is going to have an 8,000 barrel of oil equivalent contribution just from those two projects by the year-end. In exchange, of course, we handed over some assets. Vilja is a tie back to Alheim. That is a core area for Aker BP on call for us. A nice rationalization for both companies. Lastly, here are the final pieces of the financing on the back of the Swell transaction being put in place. We were very pleased to announce the gas offtake agreement we had with Associated Financing last quarter. We are copying that now on the oil side. The ink is not quite dry on the signatures here, so we cannot give full details.

We’re confident these will be in place very shortly, and well ahead of the January 1 date when those sales will commence. Again, there’s the pre-financing on sales similar to the gas arrangement at very attractive interest rates, way below the type of interest rates you see on our bonds. We will have, once these two deals are completed, facilities of over $900 million on the pre-financing associated with oil and gas, oil liquids and gas sales in the North Sea. If we move to the next slide, this obviously is a key component now of our engine room for value creation in the North Sea. We’re going to continue to discover resources, and then we are going to bring them on very rapidly, as Bijan mentioned over the past few months.

In the North Sea, we need to find like-minded partners or like-minded companies to be able to do this together. We are very pleased to be collaborating very closely with Aker BP here to make Schottkake a very fast, in Norwegian Continental Shelf terms, development. Going from discovery in Q1 of this year to production starting Q1 of 2028, which is obviously three years. That compares to six years or so as the average for subsea tiebacks that have been brought on stream so far this decade, according to the data we have. That underlines the acceleration that we are going to achieve together with Aker BP and Concerdo here. Indeed, the operator of the host that we will be getting the tie-in into, which is Vår Energi over at YERE. We are very excited for that. We are determined that this won’t be a one-off.

We will be discovering hydrocarbons, working with licensed partners to develop this sort of speed. As we move forward, we’re aiming to improve this further. We see internationally that that is possible. We’re setting the bar very high for ourselves. For investors, why should you care? It’s not just fun to accelerate developments, but obviously, in terms of the net present value on the original investment and exploration, it’s quite transformational on the return on capital invested when you can reduce the time from discovery to production by 50%. That, of course, is the value proposition behind the whole exercise. Next slide, please. This is then the front end of that funnel. We’ve had an exciting exploration program this year. This, of course, is reflecting both the portfolios of DNO and Swell as we entered 2025. We’ve got results for three wells coming up very soon.

We have an exciting program ahead of us next year. In fact, we have a luxury problem of probably too many opportunities next year that we are working to high-grade. Next slide. Turning to Kurdistan, Bijan touched on it, but we’ve been ramping up production here. The Q3 numbers are still, of course, impacted by the terrible experience we went through in mid-July where we were hit by drones, and that caused damage to critical processing equipment at the Peshkabir field. Having brushed ourselves down over a couple of weeks, put in place new security protocols to protect our staff, and so forth, the team got back to what they do best. That is, overcome challenges in an amazingly speedy fashion. Within three months of the attack, we had replaced the damaged processing equipment.

By repurposing some redundant equipment we had over at the Tawke field and got back up to 75,000 barrels. Earlier this month. Actually, sorry, mid-October. As Bijan has announced this morning, they’ve pushed it even further, and we’re back to the 80,000 mark as we speak. Of course, the big event in the quarter for Kurdistan oil and gas business in general was finally the reopening of the export pipeline through Türkiye to Ceyhan. That was after two and a half year closure, during which the entire industry, as you know, has been selling oil locally. From our side, as we’ve been talking about quarter after quarter, we’ve not been drilling in Kurdistan to properly manage our reservoirs. We need to get back to drilling and increase the production again.

That means we are moving into a period of higher investment again in the Tawke PSC. For us, therefore, the certainty of payment is even more important than it has been in the past. That has pushed us to lean on continuing to sell our oil to local buyers. The other element with respect to restarting exports that was not addressed in the agreements that other companies have signed up to is also the significant debt that the Kurdistan Regional Government still has outstanding with us. We continue to look for ways to resolve that with the KRG. We are very pleased that exports have restarted. We are also very pleased to have the certainty of payment that we have with our arrangements. On the back of that, we will be ramping up our investment. We have set another hairy target for our team.

We’re going to get to 100,000 barrels. Back to 100,000 barrels gross. Through restarting drilling on the Tawke PSC. As Bijan commented in September, we may look back a year from now and feel we’ve left a little bit of money on the table with respect to exports. The value creation from getting back to drilling and pushing the production up will exceed that, in our view. With that, I’ve done my operational updates, and I will hand over for the first time to Birgitte for the quick run through of the finances. Over to you, Birgitte. Thank you. Thank you very much, Chris. Good morning to everyone. As Chris and Bijan mentioned, we present the strong quarter where we now see the full effects from the Swell acquisition, which was completed in mid-June this year. Let’s jump right into the financials and the details.

Starting with the income statement, the strong contribution from Swell Energy, now included in DNO’s North Sea business unit, is clearly visible. Revenue was $547 million, up 112% from the last quarter. As much as 92% of the group’s revenue in the third quarter came from the North Sea business, compared to 65% in 3Q 2024. Operating expenses have increased following the inclusion of Swell, which is natural. Operating profit ended at $222 million, up more than 100% from the last quarter. Net profit in 3Q, back in black, as Chris mentioned, at $20 million. Next slide, please. Let’s move to. Yeah. Let’s move to the cash flow. Yeah, thank you. The high revenues led to a near threefold increase in cash flow from operations to a high level of $407 million in Q3, up from $135 million in Q2.

This Q3 cash flow includes $53 million in positive working capital changes. Stronger earnings in the North Sea also means higher taxes. We paid two tax installments in Norway, totaling $53 million in Q3. As you may recall, we indicated last quarter cash taxes of around $150 million in the second half of 2025. The cash tax will increase in the fourth quarter. We again had substantial investments at $225 million in Q3, consisting of $183 million in CapEx, mainly for North Sea development projects, and also $34 million in exploration expenditures. We also spent $10 million on DCOM in this quarter. Net finance outflow of $386 million primarily covers repayment of a $300 million bank bridge loan that was part of our acquisition financing for Swell Energy. We also paid a quality dividend of $36 million in Q3, as you know.

With the investments at the $225 million and $300 million in debt repayment, our cash balances were reduced by $257 million to $531 million at the end of 3Q. Again, the key takeaway here is the very substantial increase in our operational cash flow from the first full quarter with the Swell assets in operation. Next slide, please. As discussed in DNO’s Q2 presentation, our balance sheet and capital structure were substantially changed through the Swell acquisition and related financing transactions. Compared with Q3 last year, we now have quite diversified funding sources with a good combination of long-term bonds and short and medium-term offtake financing. The size of the balance sheet thereby increased by close to 70% in Q2, primarily through higher property, plant, and equipment values, as PP&E was up by 135% in the second quarter, as you can see on the slide.

For Q3, the PP value remains fairly stable from Q2, as expected. Similarly, we went from a net cash position in Q1 to a net debt of $860 million in Q2, whereas we now show a reduction in the net debt in the third quarter. The key driver for the reduced net debt is close to $100 million in free cash flow, partly offset by the dividends paid. Total equity increased with a $400 million hybrid bond that we placed in Q2, and this metric also remained stable in Q3. All in all, it’s a very strong quarter from DNO, with no surprises or special items. By that, I hand the word back to you, Justin, for the Q&A session. Thank you, Birgitte. That was a good run-through. We’ll take questions now. I haven’t seen any here. We are here. Nicholas is with us. Nicholas DNO.

I’ll unmute you and let you have the mic. Okay, please. Nicholas, you’re muted, I think, still. There you go. Yep. Hey. Hi, everybody. Congrats on the very strong quarter. And Håkon, congratulations for a long and rewarding career with the company. And thank you for the engagement with the sales side all these years. I want to wish you all the best in your next step in life. I’ve got three questions to ask, please. The first one is about Kurdistan. The other one in Norway, then kind of like a broader on the balance sheet. In Kurdistan, if you’re ramping up production, drilling wells there, but then you sell them locally, and someone else is making these kind of crazy sort of margins on the exports, I’m just wondering, where’s the incentive from the KLG to make a deal with you in order to.

For you to kind of sell the crude directly? That is kind of the first question. If you can talk about how the negotiations there are going, that would be good. On the Swell assets and generally the North Sea outlook, if you have had these assets for a few months now, would you be able to give us maybe a production target for 2026 to 2027 in the North Sea? Finally, on the balance sheet, you have been quite conservative in the past few years. I mean, obviously, that was because of Kurdistan. Now that you have repositioned the business in the North Sea, how do you think about the balance sheet going forward? More specifically, is there an optimal level of debt or leverage you guys target? Thank you. Let me try to answer the question on Kurdistan.

I’m not sure I fully understood it. You mentioned something about, I think, crazy margins and some other things. I’m not quite sure I understood it or that I understand what you understand we’ve done. What we decided to do was to continue selling our entitlement crude to the buyers who’d been buying our crude at the same prices, more or less, as prior to the exports. The amounts that we receive, again, is the same and the same mechanism when we are prepaid. We’re paid in advance by these buyers, and we deliver the oil to them. In the past, these buyers have sold the oil into the local market. We don’t follow exactly who that oil is sold to and on what basis, but we continued. We had an existing contract with them, and we elected to continue those arrangements.

Our buyers have made their own arrangements, as they had done previously, to sell that oil, but this time, they’ve sold the oil onward into the pipeline. That oil, as we understand it, is exported with all the other oil from Kurdistan, whether it’s produced by the other IOCs or other. What terms they have set into place with Kurdistan, we don’t know. All we know is we continue to be paid in advance and at a price that’s known to us, it’s predictable. There are no delays. There’s no calculation of price by an outside consultant. There are no issues we have about delayed payments and where those payments come from. We decided that we were better placed to continue to receive money in advance at predictable and at set prices that we would be under the terms of the export that other companies have elected.

This is important to us because this allows us now to make these very, very substantial investments, including drilling of A12s next year, which will start right away. We’ve signed up a contract for a drilling rig. We’re going to be deploying our own rig. As Chris says, we believe that the investments we’re making and the increased production that we will get from these investments will more than offset any money that we might end up leaving on the table. It’s possible. We know that there is a formula. Everyone knows that there’s a mechanism that the companies get paid. Hopefully by December, $16 a barrel, less.

I think an estimated average $2 in transportation fees, that’s $14, to then be supplemented at some point next year by additional monies to be calculated based on an outside consultant retained by the Iraqi government coming in and saying what the contractual number should be based on some other principles of fairness or otherwise that we’re not privy to. It’s possible that had we participated in this, we would eventually receive more than we’re receiving now. We’ve announced what we’re getting. We’re getting paid. Per barrel payment of in the low $30 a barrel. For every barrel that we are putting, selling based on our entitlement, which is now roughly, I think, 20,000 barrels a day. With our share, we get paid in advance, and we are happy with that arrangement. Now, perhaps if we participated in the export pipeline project, this number would have been higher.

That’s quite possible. As we said last quarter, and as Chris again said, we may, looking back, see that we’ve left some money on the table. Maybe we will have left some money on the table, and maybe we won’t have left money on the table. We don’t know. We thought that the predictable receipt of money would allow us to ramp our production. As I said, we’ve now ramped it up based on this thinking from zero when we were just after we were hit by the drones to 55 three months ago to 80 now and to 100,000 at some point next year. I think this is best for us. It’s best for Kurdistan. It’s best for Iraq since they’re selling the oil. I think it’s a win-win-win situation.

If we find that as we’ve ramped up production, that the terms and conditions and payments for the export arrangements are attractive, that they continue beyond the end of this year. My understanding is that these arrangements were done until the end of this year. They’ll have to continue. There’s an election in Iraq. There’ll be elections in Kurdistan. There’ll be changes, perhaps, to conditions. We’ll see. If we find that those terms are attractive to us, we will participate in exports. If we find that the current arrangements give us predictability, we will stay with our current arrangements. Hopefully, we’ll be able to ramp up our prices. Already, our prices for local sales, as we call them, in November are higher than they were in October when we started. We expect those prices will continue to rise.

We’re happy with this arrangement, and we’re happy to be drilling again. We’re happy to be producing larger volumes. As I’ve said, DNO is great at this. We have great fields. We have great people. We’re able to deploy a dollar and get more value for it than other companies have traditionally done. We’re very pleased with the way things are progressing. We hope exports will continue. We wish everyone well as part of the export scheme. Their success will eventually be our success as we’ll participate in exports and some other arrangements that we might make ourselves. In the meantime, we are investing in Kurdistan. We’re the only company planning to drill as many wells as we are. That’s what we’ve always been. We’ve been the largest producer, the fastest mover. We’ve said this before.

Sometime before the end of this year, we will produce our 500 millionth barrel of oil from the Tawke license. That’s a great achievement for us. It’s been great for Kurdistan. It’s a record we want to improve on. I think we’re set well to do that. On the issue of what our North Sea production is going to be, I’ll ask Chris to refer to that. We haven’t given that sort of longer-term guidance because our situation changes as much as it does. Historically, that’s been the case in Kurdistan, but even the North Sea, a year ago, who would have thought that our production in the North Sea would quadruple, which it has with the Swell acquisition? We share with you our plans, the fast-track production. We’ve shared with you our record of discoveries, which has been quite significant.

You know from us, from what we’ve been saying for quite some time, and again, repeat it today, that we’re going to fast-track the monetization of our discoveries by bringing them into production quicker so you can do some back-of-the-envelope calculations. We are still on the lookout, as we’ve been for some time, for additional acquisition of additional production. We will ramp up production for our own discoveries, and we have a long pipeline of discoveries. We’ll be on the lookout to do swaps and to, as we’ve announced again, acquire bolt-on acquisitions, smaller ones. We’ve been doing some of those in the past that we reported and maybe more significant acquisitions as well. Our ambitions for the North Sea are as large as our ambitions for Kurdistan. That I can say with some confidence. Chris, would you like to? I think that’s a good summary.

We have mentioned in our material this quarter that, and as I said in my remarks, that Q3 was impacted by the summer maintenance season and so forth. We indicated an exit rate in the North Sea of 90,000 barrels or equivalent per day, roughly. That gives you, obviously, a good sense, we feel, of the scale of the business we have there. We’ve made similar comments in, I think, several presentations since we completed the acquisition. Yeah, we feel we’ve given a good indication of what you can expect from the North Sea business. With the comments that Bijan made and mine earlier, we’re trying to help the market understand how we’re planning to generate a lot of value out of this new portfolio that we have. We’ve used the term repeatedly, but the two portfolios went together like a hand in glove.

With the production-strong portfolio of Swell combining with the exploration and development-strong portfolio of DNO. Again, I think Sherpa Carker is just the first example of that. Where Swell had an increased, a much stronger presence in the posts and potential pieces of infrastructure that could be relevant for Sherpa Carker development. We made the discovery, and that is going to be on stream early 2028. This is something, as I mentioned earlier, we’re going to be working hard to replicate. Not forgetting, the backbone that will maintain production as well is the type of legacy assets we have down the Ekofisk area, which came with Swell. As everyone who follows the Norwegian Continental Shelf, Ekofisk just goes on and on. That type of asset, Martin Linge. The Brage asset from the DNO portfolio, these also will provide a tremendous core of.

Long-term production to which we were adding this machine of explore, develop. To create value for the shareholders. I hope that gives you enough color on what we’re aiming to achieve in the North Sea. On your other question about our balance sheet, let me say the following. Yes, you’re right. We’ve been conservative, and we will continue to be conservative. We’re not going to bet the company on anything. Part of that’s been driven, as you said, by Kurdistan because of the movements up and down in payments in the past and other challenges. It wasn’t just about Kurdistan. It’s not just about being conservative. The Kurdistan part is being prudent. I think generally we’re conservative in how we think about the business. We’ve also been opportunistic. We’ve built out large cash reserves.

We were looking for an acquisition several years ago, and we were able to deploy that additional cash to the acquisition of FARO. We then started building up again our cash position, looking for another larger opportunity, and we used it in part to finance the acquisition of Swell. Right now, as we reported, we have something in excess of $500 million in cash on the balance sheet. We have $900 million in total availability of pre-financing. We’ve drawn down, I think, $340 million of that, again, as part of the Swell transaction, the repayment of our debts, which Birgitte discussed. We have another significant amount of money available to us if and when we need it, either for an acquisition or for some other purpose. We have built up these cash reserves. We like to always have a significant amount of cash on the balance sheet.

Both because of the ups and downs of the market and the price of oil goes up and down. We want to be prudent and in a position to continue to pay dividends to our shareholders. To service our bond debt, which we’ve done now for 22 years and quite successfully. We’re proud of that record. Our investors on the equity side or the debt side are critically important to us. Our credibility and our good performance is critically important. In that sense, too, we’re conservative. Not all companies have these sort of targets of continuing to pay dividends and to continue to service the debt. We do. For that, we need to have enough cash on the bank and be prudent and be conservative. We’re proud of that. We do build up cash, and we do look for opportunities and.

Grab those when we can. We do not have a specific target figure other than whatever is prudent and conservative and opportunistic. That will drive our thinking and our action. Next one up is another analyst, Teodoro Stan Nielsen. You might mute yourself, please. Good morning, and thanks for taking my questions. A few questions from me. First, on Tawke, congrats on reaching 80,000 barrels per day target. Regarding the 100,000 barrels per day, how should we think around timing of that and also potentially the duration? Should we expect 100,000 barrels per day flat out for the entire 2026, or should we factor in a lower average production for next year? Second question, that is just following up on the export potential. As far as I understand, you now sell at local prices in Kurdistan. How does the route to export prices look like?

Is it only a deal around the receivables that is between us now and you getting international prices, or are there any other outstanding issues? My third question, that is for guidance 2025. In your second quarter report, you gave some guidance on operational spend and CapEx for the Norwegian portfolio. I did not see that in the Q3 report. You just confirmed that that guidance is still valid. Thanks. Yeah, thank you. I was amused when you and your son were going back and forth about unmuting Theodore. Who has ever muted Theodore? Thank you for your question. You always have interesting and important questions. The easiest one is on the 100,000-barrel target. For us to get from 80,000 to 100,000, that is about 5,000 additional barrels a quarter. That is not difficult for us.

We were over 100,000 barrels per day, if you recall, before the pipeline was shut in two and a half years ago. We know how to get there. As you know, in the two and a half years or so that we were not drilling any new wells, we were still able to maintain production by tweaking the wells and by doing workovers. Our cracked production team in Kurdistan has really learned so much about the Tawke field and about the wells and how to, with minimum amounts of spend and effort, keep those wells flowing. This is really quite spectacular because, as we have discussed many times in the past, these fields, typically, these reservoirs have a 15%-20% decline rate. How we were able to stop that decline rate without drilling any new wells is, again, an amazing achievement, but it speaks to the.

Twenty years or so of DNO working in that field and learning how to optimize it. With that base of knowledge and understanding, and they’ve already, during this period, located other wells they want to drill. Some of them are production wells. Some of them are a bit of a step out. One or two of them have an exploration component that’s quite exciting. We’re going to drill into those in 2026. When are we going to hit 100,000 a day? The target we set for them is towards the end of next year. They’ve surprised us pleasantly. Every time we set targets for them, they’ve achieved those targets and achieved them in record time. I would not be surprised if we, once again, beat those targets. Let’s give them a chance to do what they do very well as they get going.

As I said, we’re bringing the rig back in again. That’s going to drill the deeper wells. Our own SINTI rig, which has been doing a lot of the workovers in the last couple of years, will focus on some of the shallower targets that we have in the shallower horizon in the Tawke field. We’ll get to 100,000. We’ll get to 100,000. We’ll set a new target and see if we can achieve that. It’ll get harder with time. If we drill one or two of these exploration wells and are successful, we can have a step up in production from the two fields. Give us a chance to do it. Our history is a good predictor of our future, certainly in Tawke. On exports, how would we.

Participate in exports if it looks like the payments are greater than we can get in the local market? That’s a good question. There are several avenues to that that we were considering. We can sell our entire oil to whoever we want to sell it to for our production sharing contracts. It was helpful for everyone for us to have this three-way arrangement between ourselves, our local buyers, and Kurdistan and Iraq for our oil to be sold under arrangements we were comfortable with, but find this way to the pipeline. Again, DNO’s 80,000 barrels is a substantial part of the total production of Kurdistan. Without it, the pipeline project wouldn’t have worked. We didn’t want to block the export project. That’s an important project for many stakeholders. We just wanted to make sure we were getting paid $30.

Low 30s before we put the oil into the pipeline, then be paid maybe $14, $12, $14. Maybe sometime in December to be topped off, maybe sometime in the future, or reduced maybe sometime in the future, depending on what an outside consultant would decide would be a fair price or a price that was somehow acceptable to other companies. That uncertainty, we did not want to live with. We believe that by, again, selling in the low 30s and getting paid in advance, we can invest and get more production and more revenue to offset any money we leave on the table. There are several ways to get there.

Because we’re not signed up into the larger project, we have our rights under our PSC to sell the oil to wherever is the best buyer from our point of view in terms of pricing and payment terms of that oil. We had said, and all the companies had said, that we would not participate in exports unless the arrears was resolved. We kept to that. Our arrears are important for the other companies. Maybe the arrears were less. We know there were less. Our arrears were the greatest. We had said consistently that we will not participate in that export project until our arrears were addressed so we had comfort that we would be receiving those arrears. We have different mechanisms to achieve that. None that have been finalized that we can announce now. We will get our arrears back, one way or the other.

As happened the previous time we built up, even much larger arrears during the ISIS period. You remember that period well. Kurds. They’ve always been good for all of the contracts eventually. We understand sometimes when there are squeezes, we work with them. We expect that one way or another, and there are different ways of doing this, we will get the arrears paid. At some point, we hope to participate in exports. If not in the next few months, the export agreements between Iraq and Türkiye expire in July. We don’t know how that pipeline will be used and by whom and under what terms and conditions. Things will change in July. We haven’t been participating in the export stream directly now. Perhaps come July, there’ll be other opportunities for us to participate in a different way, in an export project.

We’re comfortable with that decision. We have the cash to drill wells to raise production. All that is, I think, on track as far as DNO is concerned. How time flies when you’re having fun. We’re approaching the one-hour mark. Unless there are any more questions from the audience, I think we’ll wrap it up. Thanks for listening in, and see you around soon. Thank you. Bye then. Thank you.

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