OSLO - Norway's DNO on Thursday upped its guidance for production from the Tawke oilfields in Iraq's Kurdistan region and reported its first quarterly profit since the start of the COVID-19 pandemic as oil prices rose.

The Oslo-listed company now expects daily gross output from Tawke, which consists of two fields, Tawke and Peshkabir, of 110,000 barrels in 2021 compared to 100,000 barrels seen in February.

The company reported an operating profit of $66 million for the January-March quarter compared to a loss of $11.5 million in the same period a year ago.

"DNO, like our peers, is positioned for strong cash flow in 2021 with the firming up of oil demand and prices," said DNO's Executive Chairman Bijan Mossavar-Rahmani.

Production from the Tawke license stood at gross 112,000 barrels per day (bpd) in the first quarter, helped by natural gas injection.

DNO operates the license and has a 75% stake, while Genel Energy has the remaining 25%.

DNO's net oil and gas output in the first quarter, including production from the North Sea, stood at 99,200 barrels per day.

The company maintained its full-year spending guidance at $700 million, including $270 million in capital spending.

DNO said the regional government of Kurdistan owed it $239 million in previously withheld payments for Tawke production, but two-thirds of the sum could be repaid by the end of the year at the current oil price level.

(Reporting by Nerijus Adomaitis, editing by Terje Solsvik) ((nerijus.adomaitis@thomsonreuters.com; +47 9027 6699; Reuters Messaging: nerijus.adomaitis.thomsonreuters@reuters.net))