Dno Asa Class A · OSL:DNO

Dno Asa Class A — Q4 2002 Earnings Presentation

44 slides from Dno Asa Class A's earnings presentation, Feb 19, 2003

1. Slide 1: DNO ASA 4 Quarter 2002

   DNO ASA 4 Quarter 2002 by Helge Eide, Managing Director Haakon Sandborg, CFO 19 February 2002

2. Slide 2: Highlights

   Highlights Positive Performance continued into 4 Quarter ƒ Completed new successful well on West Heather ƒ Further Increase of Yemen Production ƒ Closed Thistle Agreement All Main Targets for 2002 met ƒ Production > 22,000 BOPD ƒ Partners for West Heather ƒ New Operatorships in Norway and UK ƒ Incre

3. Slide 3: Key figures

   Key figures Q4 2002 Q4 2002 Adjusted Adjusted Operating Revenues 425 425 1 691 1 691 EBITDA 244 244 967 967 Operating Profit 151 91 600 523 Profit (loss) before Tax 177 54 572 287 Profit (loss) after Tax 44 -79 208 -77 Netback 88 88 552 552 2/18/2003 DNO ASA - Interim Presentation Q4 3

4. Slide 4: DNO ASA - Interim Presentation Q4

   2/18/2003 DNO ASA - Interim Presentation Q4 4

5. Slide 5: License Portfolio

   License Portfolio 22,390 Norway PL 103B Jotun Glitne Field 20.000 PL 203 6.868 PL 148 PL 006C PL 167 4.780 UK/Ireland Heather West Heather 10.000 Thistle Seven Heads Solan/Strathm 10.742 Yemen Tasour Sharyoof Block 43 BOPD 2/18/2003 DNO ASA - Interim Presentation Q4 (2002) 5

6. Slide 6: DNO Production

   DNO Production 2001 2002 13.255 BOPD 22.390 BOPD 30 000 25 000 20 000 15 000 10 000 5 000 0 J F M A M J J A S O N D 2/18/2003 DNO ASA - Interim Presentation Q4 6

7. Slide 7: DNO Production

   DNO Production UK NORWAY YEMEN 30 000 25 000 20 000 15 000 10 000 5 000 0 J F M A M J J A S O N D 2/18/2003 DNO ASA - Interim Presentation Q4 7

8. Slide 8: UK / Ireland - Status

   UK / Ireland - Status 6 000 4,780 BOPD Highlights: 5 000 4 000 ƒ WH Farm-Out 3 000 ƒ Successful WH Drilling 2 000 1 000 ƒ Closed Thistle Agreement 0 j f m a m j j a s o n d ƒ Acquired IPDL (7 Heads Gas Project) License / Field % Operator Heather 100,00 DNO Outlook 2003 West Heather 55,00 DNO ƒ Produ

9. Slide 9: Two UK Operatorships

   Two UK Operatorships Heather Thistle Deveron Thistle Block 210/29a Heather W. Heather Heather Platform is located 390 km N. Terrace Thistle Platform is located 75 km NE NE of Aberdeen of Heather 2/18/2003 DNO ASA - Interim Presentation Q4 9

10. Slide 10: Production Test on West Heather

    Production Test on West Heather 6000 BOPD 2/18/2003 DNO ASA - Interim Presentation Q4 10

11. Slide 11: Heather Area Development Plan

    Heather Area Development Plan Reserves – Mill. Barrels Gross: 74 Net DNO: 54 3 Pre-drilled Production wells 2/18/2003 DNO ASA - Interim Presentation Q4 11

12. Slide 12: Thistle

    Thistle Thistle Transaction ƒ Use Experience from Heather ƒ Access to 20 Million Barrels of Oil ƒ Strengthen Position as Operator in UK ƒ Access to infrastructure 2/18/2003 DNO ASA - Interim Presentation Q4 12

13. Slide 13: Seven Heads - Overall Field Layout

    Seven Heads - Overall Field Layout Reserves (p + p) Gross 300 Bcf / 55 Mill. bbls oe DNO 38 Bcf / 7 Mill. bbls oe First gas production planned for October 2003 2/18/2003 DNO ASA - Interim Presentation Q4 13

14. Slide 14: Norway - Status

    Norway - Status 6.868 BOPD 9 000 8 000 Highlights: 7 000 6 000 ƒ Glitne Performance 5 000 4 000 3 000 ƒ Operatorship 103B 2 000 1 000 ƒ Increased PL 203 0 J F M A M J J A S O N D Resources License / Field % Operator Outlook 2003 Jotun Unit 7,00 Exxon/Mobil PL 103B 70,00 DNO ƒ Production 5.000 BOPD G

15. Slide 15: Licenses on NCS

    Licenses on NCS 1 2 1 4 3 3 4 2 5 5 2/18/2003 DNO ASA - Interim Presentation Q4 15

16. Slide 16: Yemen

    Yemen 2/18/2003 DNO ASA - Interim Presentation Q4 16

17. Slide 17: Yemen - Status

    Yemen - Status 10.742 BOPD 16 000 14 000 Highlights: 12 000 10 000 ƒ Improved Production 8 000 Performance 6 000 4 000 ƒ Increased Reserves 2 000 0 J F M A M J J A S O N D Outlook 2003 License / Field % Operator ƒ Production 12.000 BOPD Block 32 Tasour 41,00 DNO Block 53 Sharyoof 24,45 Dove Energy ƒ

18. Slide 18: 2003 Outlook

    2003 Outlook Production Target – 26.000 BOPD High Drilling Activity ƒ Norway 7 wells – exploration / appraisal (4) – production (3) ƒ Yemen 11 wells – exploration & appraisal ( 8 ) – production (3) ƒ Ireland 5 wells Developments ƒ Progress West Heather development ƒ 7 Heads Gas Project - first produ

19. Slide 19: DNO ASA - Interim Presentation Q4

    2/18/2003 DNO ASA - Interim Presentation Q4 19

20. Slide 20: Financial Highlights

    Financial Highlights 2002 and fourth quarter ƒ Increase in production, lower FX rates and oil price ƒ Direct field expenses per bbl maintained ƒ EBITDA NOK 244 mill. in 4Q 02, YTD NOK 967 mill. ƒ Netback after tax NOK 88 mill., in 4Q 02, YTD NOK 552 mill. ƒ Special Q4 events: • NOK 42 mill remaining

21. Slide 21: Income statement

    Income statement Q4 ‘02 Q3 ‘02 Q2 ‘02 Q1 ‘02 Q4 ‘01 2002 2001 Operating Revenues 425 440 457 368 271 1 691 1 199 Exploration and Impairment -21 -7 -53 -33 -1 -114 -10 Operating Exp., excl expl & DD&A -173 -150 -155 -145 -152 -623 -554 EBITDA 244 283 249 191 118 967 635 EBITDAX 265 290 302 224 119 10

22. Slide 22: Income Statement 2000 - 2002

    Income Statement 2000 - 2002 2002 Adjusted 2002 2001 Operating Revenues 1691 1 691 1 199 Exploration and Impairment -114 -114 -10 Operating Exp., excl expl & DD&A -610 -623 -554 EBITDA * 967 967 635 EBITDAX ** 1081 1081 645 DD&A -352 -352 -229 Abandonm. Provisions, Write-down -16 -79 -40 Operating P

23. Slide 23: Net finance

    Net finance COMMENTS ƒ Realisation of FX - contracts and interest rate swap ƒ NOK 25 mill agio from acquisition of Jotun 3,75% ƒ Unrealised FX-losses Q4 2002 Q3 2002 Q2 2002 Q1 2002 2002 2001 Interest revenues 4 4 2 3 13 26 FX-contracts, swaps 18 4 36 6 64 7 Agio, other financial revenues 31 -3 5 0

24. Slide 24: Assets

    Assets Comments ƒ Zero book value of shares in PDR and Timan Pechora Project ƒ Other current assets (receivables) reduced by NOK 148 mill ƒ NOK 127 mill. cash reduction (Jotun 3,75% and tax payments NCS) Q4 2002 Q3 2002 Q2 2002 Q1 2002 2002 2001 Fixed Assets 1 379 1 349 1 331 1 453 1 379 1 372 Finan

25. Slide 25: Shareholders' Equity and Liabilities

    Shareholders’ Equity and Liabilities Comments ƒ Reduced long-term liabilities due to completion of Jotun 3,75% ƒ Reduced long-term interest bearing debt due to repayments and fx ƒ Reduced short-term debt due to lower taxes payable, trade creditors and accrued expenses Q4 2002 Q3 2002 Q2 2002 Q1 2002

26. Slide 26: Operating Revenue

    Operating Revenue NCS UKCS International IOT Total Comments 500 450 ƒ NOK 425 mill. operating 400 revenue in Q4 02, down NOK 15 mill from last 350 quarter 300 NOK mill 250 ƒ Increase in production from last quarter (Bl. 32 Yemen) 200 150 ƒ Reduction in operating revenues mainly caused by: 100 50 • L

27. Slide 27: Direct Field Expenses per barrel

    Direct Field Expenses per barrel Expenses per barrel o.e. Direct Field Expenses Comments 14 250 ƒ Per bbl direct field 12 200 expenses maintained at Q3 level 10 ƒ Increase in direct field Direct field / bbl o.e 150 8 expenses Q4 offset by NOK mill increase in production 6 100 4 50 2 0 0 Q1 Q2 Q3 Q4

28. Slide 28: Net Back After Tax

    Net Back After Tax Comments 300 EBITDA Netback ƒ Netback NOK 88 mill in 4Q 250 02 ƒ Reduction from 3Q caused 200 by higher tax payments Bl. 53 Yemen and NCS tax NOK mill 150 payment Oct 02 100 ƒ Netback YTD NOK 552 mill (NOK 530 mill) – tax 50 increase from 2001 NOK 310 mill 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q

29. Slide 29: Cash Flow

    Cash Flow Operating activities: Q4 2002 Q3 2002 Q2 2002 Q1 2002 2002 2001 Consolidated profit before tax 54 166 -7 76 287 308 Taxes paid for the period -156 -97 -117 -45 -415 -106 Depreciation, depletion and amortizations 156 83 101 92 432 269 Associated companies 46 20 122 4 192 33 Changes in worki

30. Slide 30: Key Financials

    Key Financials Continued profitable growth and shareholder value creation in 2002 ƒ Improving after tax cash flow return on gross investments (CROGI) on annual basis ƒ Maintaining comfortable margin to group cost of capital for 2002 ƒ Non-cash generating assets (Timan Pechora and PDR ASA) included i

31. Slide 31: Reserves and reserve replacement

    Reserves and reserve replacement Proven and Probable Reserves Reserve replacements ratio 14 140 12 120 10 100 Times coverage Mill bbls o.e 8 80 6 60 4 40 2 20 0 0 2000 2001 2002 ”A platform for future profitable growth” 2/18/2003 DNO ASA - Interim Presentation Q4 31

32. Slide 32: Production 1998 - 2002

    Production 1998 - 2002 35 000 Comments NCS UKCS INT Total 30 000 ƒ Annual production growth rate exceeding 200 % 25 000 ƒ Increase in production January 2003 from UKCS Bbls o.e / day 20 000 (Thistle) and INT 15 000 10 000 5 000 0 1998 1999 2000 2001 2002 Jan 03 2/18/2003 DNO ASA - Interim Presentati

33. Slide 33: Direct Field Expenses per barrel

    Direct Field Expenses per barrel Direct Field Expenses p.bbl Direct Field Expenses Comments 20 500 18 450 ƒ Decreasing direct production and 16 400 transportation expenses 14 350 per bbl due to increased 12 300 low cost production USD / bbl NOK mill 10 250 ƒ Diversification from year 8 200 2000 with

34. Slide 34: Revenues, EBIT and net profit

    Revenues, EBIT and net profit 1 800 Revenues EBIT Comments 1 600 1 400 1 200 ƒ Profitable growth in oil and gas segment NOK mill 1 000 800 600 400 ƒ Impact from Timan Pechora 200 0 and O&S on net profit 2002 -200 1998 1999 2000 2001 2002 ƒ Net profit adjusted: Net profit Net profit adj. 250 • Loss a

35. Slide 35: Cash Flow and Capex 1998 - 2002

    Cash Flow and Capex 1998 - 2002 CF Operating activities Comments 1 000 CF Investing activities 3 CF coverage of investments ƒ Significant investments in 800 2,5 O&G assets 2 • 2000 NOK 460 mill 600 1,5 • 2001 NOK 884 mill CF coverage ratio NOK mill • 2002 NOK 461 mill 400 1 ƒ Improving cash flow 0,5

36. Slide 36: DNO ASA - Interim Presentation Q4

    2/18/2003 DNO ASA - Interim Presentation Q4 36

37. Slide 37: Production vs. Oil Price

    Production vs. Oil Price Comments 25 000 30 TOTAL Oil price ƒ Average production 25 20 000 • 4Q 23.513 bbls / day 20 • 3Q 21.928 bbls / day 15 000 Bbld o.e / day USD / bbl o.e ƒ Average oilprice 15 10 000 • Reduction in Brent quarterly 10 average from USD 26,91 in 3Q to USD 26,63 in Q4 5 000 5 • Inc

38. Slide 38: Revenues 1998 - 2002

    Revenues 1998 - 2002 1 800 NCS UKCS INT IOT Total Comments 1 600 ƒ Strong annual growth in 1 400 revenues 1 200 ƒ Diversification of license portfolio 1 000 NOK mill 800 600 400 200 0 1998 1999 2000 2001 2002 2/18/2003 DNO ASA - Interim Presentation Q4 38

39. Slide 39: Rev., EBIT, EBITDA & Net Profit

    Rev., EBIT, EBITDA & Net Profit Revenues EBITDA EBIT Net Profit, Adjusted Comments 500 Net Profit ƒ Lower EBITDA and 400 Operating Profit from last quarter 300 ƒ Net profit adjusted 200 • loss from PDR NOK mill 100 • write-down Timan Pechora • other non-cash items (O&S) 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 200

40. Slide 40: Net Back 1998 - 2002

    Net Back 1998 - 2002 1 200 EBITDAX EBITDA Netback Comments 1 000 ƒ Strong cash flow generation after tax 800 ƒ Maintaining high netback despite increased tax 600 payments 2002 NOK mill 400 200 0 1998 1999 2000 2001 2002 -200 2/18/2003 DNO ASA - Interim Presentation Q4 40

41. Slide 41: CF coverage of investments

    Cash Flow and Capex 500 CF Operating activities 10 Comments CF Investing activities CF coverage of investments 9 ƒ Strong cash flow cover of 400 8 investments 7 ƒ 4th quarter investments: CF coverage of investments 300 6 • Jotun 3,75% NOK mill 5 200 • Drilling programme INT 4 3 • Seven Heads 100 2 1

42. Slide 42: EBITDA 1998 - 2002

    EBITDA 1998 - 2002 1 200 NCS UKCS INT Total Comments 1 000 ƒ Strong growth in earnings before interest, tax and 800 DD&A 600 NOK mill 400 200 0 1998 1999 2000 2001 2002 -200 2/18/2003 DNO ASA - Interim Presentation Q4 42

43. Slide 43: Income Statement 2000 - 2002

    Income Statement 2000 - 2002 2002 2001 2000 Operating Revenues 1 691 1 199 673 Exploration and Impairment -114 -10 -22 Operating Exp., excl expl & DD&A -623 -554 -407 EBITDA * 954 635 244 EBITDAX ** 1068 645 266 DD&A -352 -229 -77 Abandonm. Provisions, Write-down -79 -40 -45 Operating Profit 523 367

44. Slide 44: 20 largest shareholders 180203

    20 largest shareholders 180203 INCREASED OIL RECOVERY 6.563.142 12,11 NOR DET STAVANGERSKE DAMSKIPSSELSKAP 2.000.000 3,69 NOR THE LAW DEBENTURE TRUST 1.999.642 3,69 GBR LARSEN OIL & GAS AS 1.802.148 3,32 NOR UNISTAR HOLDINGS INC 1.537.000 2,83 USA SKAGEN VEKST 1.499.759 2,76 NOR SLETTHEI AS LEIF ING

DNO — Q4 2002 Earnings Presentation on 6ix