DNO

Capex

Future Plans

In June 2007, DNO launched a new growth strategy in Norway, where the mission was to build the largest independent Norwegian exploration and production company. On 8 October 2007 the company entered into an Integration Agreement with Pertra ASA and DNO ASA. The main purpose of the agreement is to join the activities of Pertra ASA and Det Norske Oljeselskap ASA into one major privately owned Norwegian exploration and production company, called Det norske oljeselskap ASA.

The combined company will become Norway’s second largest operator. The company will operate 20 exploration wells over the next three years.

Production

Average production in 2007 was 15,198 barrels of oil equivalent per day. Exit production for the year was 18,000 boepd.

In 2006 DNO achieved an average oil production of 14 831 bopd (working interest).

2005 production (net entitlement) was 3.2 million barrels (14,741 boepd) compared to 3.06 million in 2004.

Reserves

At 2007 year-end, total remaining P50 reserves class 1-3 net to DNO were estimated to be 151,8 mill. bbl. This is higher than the previously reported figure of 127,9 mill. bbl.
 
The reason for this change is that the Company's working interest (pre-tax) share of the Tawke Field reserves has now been adjusted to incorporate DNO's share of cost oil related to carried interest in accordance with the reviewed terms of the Tawke PSC.
 
The gross P50 reserves for Tawke are estimated to 230 mill bbls, which is unchanged compared to the previously reported estimates. A third party independent evaluation for Tawke reserves confirms this estimate.
 
The remaining P50 resources class 4-5 to DNO are estimated to 1,5 mill. bbl and P50 resources class 7 are estimated to 3,5 mill. bbl. These figures are unchanged compared to the previously reported volumes. The total reserves and resources class 1-7 as of 31.12.2007 are estimated to 156,8 mill. bbls.
 
DNO's share (36,9 %) of the P50 reserves and resources class 1-5 in Det norske oljeselskap ASA (DETNOR) are estimated to 31,4 mill. boe and the Company's share of the P50 resources class 7 in DETNOR are estimated to 16,2 mill. boe.
 
The figures related to DETNOR are defined as associated reserves and resources and are based on volumes reported by DETNOR to the market. The ASR report does not include resources class 7.
 
During the first quarter DNO has reported several new oil discoveries. The Hawler # 1 well in Kurdistan / Iraq tested 9,000 bopd from one zone in the Jurassic interval and additional testing of the well is currently ongoing.
 
In Yemen The Yaalen # 1 oil discovery in Block 47 is yet to be tested and two new wells proved oil in the Bayoot area in Block 53.
 
DNO will also continue with a high level of exploration drilling in 2008, targeting an unrisked resource potential of 280-390 mill. bbls net to DNO. In sum there is a potential for substantial further increase in the Company's reserves and resources in 2008.

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