DNO International ASA - Arbitration Proceedings
(Thomson Reuters ONE) - As explained during the presentation given at the Market and MediaUpdate on 28 September 2009, DNO signed two Production SharingAgreements (PSA) in Kurdistan in 2004. DNO was the only participantto the PSA at the time with a 40 % economic/beneficial interest. Onseveral occasions DNO communicated to the market that the final termsof the contracts would be subject to final review and the additionalparticipants on the PSA's would be reported in due course.Following implementation of, and in accordance with, the new oil andgas law in the Kurdistan Region in 2007, all contracts were subjectto review to comply with the new legislation. In all countries,including Norway, there are certain requirements to be fulfilled forcompanies which apply for contracts for exploration and production ofoil and gas. For DNO's contracts in Kurdistan such review wascompleted in March 2008.As reported at the Market and Media Update on 28 September 2009, DNOis involved in arbitration proceedings related to certain third partyinterests in Kurdistan. Such third parties were not approved to bepart of or have any rights in the PSC's following the reviews whichwere completed in March 2008.DNO has rejected the basis for any claims from such third parties,which relates to up to 10 % beyond DNO's interest in the PSC. Thefirst part of the arbitration has ruled the right to seekcompensation for damages from DNO Iraq AS, which is a subsidiary ofDNO International ASA. The arbitration proceedings are thereforecontinuing and a final award with respect to possible compensationfor damages is expected in the second quarter of 2010.Accordingly there are no other parties who have any rights to aninterest in the PSC's, beyond what were reported on 6 April 2009.Ongoing arbitration proceedings are confidential as is any award,subject of course to any legal obligation on DNO to disclose orreport any future possible award. DNO is therefore unable to makeany further comments related to the arbitration.There has been no formal statement of claim specifying the damagesrequested in the arbitration to date. During our ongoing discussionswith KRG we have understood that the arbitration is not part of thepresent suspension period in Kurdistan, which DNO is working toresolve as soon as possible.DNO has reported the arbitration in the note to the 2008 Annualreport and in the notes to the Second Quarter 2009 Interim Report. Nofurther information can be given at this stage._________________________________________________________________________Following the review which was completed in March 2008 the definitionof the contracts changed from Production Sharing Agreements (PSA) toProduction Sharing Contracts (PSC) and below is an extract of thecontent of a DNO Stock Exchange Notice disclosed to the market on 14March 2008:Quote:DNO today confirms that it has signed revised agreements with theKurdistan Regional Government ("KRG") amending the production sharingcontract it holds for the Dohok and Erbil license areas. The Dohokarea has been divided into two license areas, one for the Tawke oilfield and one for the remaining Dohok area.The Company now holds three Production Sharing Contracts (PSC) inKurdistan - Northern Iraq:Tawke PSC, with a working interest to DNO of 55 %Dohuk PSC, with a working interest to DNO of 40 %Erbil PSC, with a working interest to DNO of 40 %The balance of the working interests in all PSC's is held by the KRGas a Government Interest and Third Party Interest to be appointed bythe KRGEnd Quote:In April 2009 DNO reported certain assignments which had beencompleted in relation to its contracts in Kurdistan. Below is anextract from this notice:Quote:DNO has been advised by the Kurdistan Regional Government (KRG) thatit has completed the assignment of a 25% Third Party Interest in theTawke Production Sharing Contract (PSC) to Genel Enerji. This rightof appointing an additional party to the PSC is included in most ofKRG's contracts, and in the case of Tawke, the right was scheduled tobe exercised by the end of 2008.The assignment process started in the last quarter of 2008, and itwas agreed to by the end of last year, and all remaining formalitieswere recently finalized. The assignment is effective from 1st January2009 for the purposes of paying costs.DNO has been further advised by the KRG that it has also completedthe assignments of the Third Party Interest in the Duhok PSC, also toGenel Enerji and the Erbil PSC to another private investor. Duhok andErbil are still in the exploration/appraisal phase.End QuoteDNO International ASA1 October 2009Contacts:Media:Helge Eide, MD DNO International ASA Telephone: +47 23 23 84 80Ketil Jørgensen, Crux Communication Telephone +47 930 36 866(Norway)Ben Willey, Buchanan Communications Telephone: +44 207 466 5000(UK)Investor Relations:Haakon Sandborg, CFO DNO International Telephone: +47 23 23 84 80ASAThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 01.10.2009 - 07:48 Uhr
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