Oslo: DNO ASA and partner Genel Energy Plc have increased production at their Tawke field in Iraq’s Kurdistan region to a record 150,000 barrels of oil a day as they expect more regular payments for exports.

Tawke is currently the largest producing field in Kurdistan in northern Iraq and DNO, its Norwegian operator, is on track with expansion plans to boost output and processing capacity to 200,000 barrels a day in the first part of the year, Executive Chairman Bijan Mossavar-Rahmani said in an email on Friday. A “significant” part of production is exported through Turkey, with the balance sold in the local Kurdish market, he said.

DNO extended gains following the news on DNO’s production, rising as much as 8.2 per cent and trading 7.4 per cent higher at 12.4 kroner a share as of 3:30pm in Oslo.

Genel, which owns 25 per cent of Tawke and is Kurdistan’s biggest producer, said last week it expects a regular export- payment mechanism to be established over the course of 2015 following years of squabbling over oil revenue between the semi- autonomous Kurdistan Regional Government and central Iraqi authorities. While the KRG and Baghdad struck a deal over exports in December, Kurdish producers have had to resort to discounted local sales to secure cash from operations as authorities hang on to export income amid a costly fight against militants from Islamic State.

“We’re fully confident that we’ll receive payments for our production and exports in line with our contractual terms,” Mossavar-Rahmani said, stopping short of providing a timeline like Genel. “The operating companies in Kurdistan have made it quite clear that future investments will be driven by the timing and extent of payments. And it’s in the interest of all parties that these investments be made.”

In the meantime, DNO is selling oil locally at as low as $30 a barrel, according to figures provided last month in a presentation. Mossavar-Rahmani declined to provide the proportion of production being exported.

The share of DNO’s working-interest output being exported reached 54 per cent in 2014, up from 43 per cent in the first three months of that year after Kurdistan boosted exports in the fourth quarter, according to calculations based on company filings. DNO’s Chief Financial Officer Haakon Sandborg said last month the company intends to increase local sales through the year.

“The update on DNO’s production figures probably contributed to the stock’s advance today,” Teodor Sveen Nilsen, an analyst at Swedbank AB, said in an email. “This shows DNO is making progress on ramping up capacity at Tawke. However, we are still concerned about weak first-quarter cash flow and the short term outlook for regular export payments.”

Genel rose 0.7 per cent to 521 pence in London after earlier falling as much as 1.4 per cent.