Dno Asa Class A · OSL:DNO

Dno Asa Class A — Investor Presentation (November 2005)

45 slides from Dno Asa Class A's investor presentation, November 2005

  1. Slide 1: DNO ASA - Building Shareholder Value Through Reserve Growth at Low Costs

    DNO ASA BUILDING SHAREHOLDER VALUE THROUGH RESERVE GROWTH AT LOW COSTS November 2005 Helge Eide, President Haakon Sandborg, CFO

  2. Slide 2: Disclaimer

    Disclaimer THIS PRESENTATION IS BEING FURNISHED TO YOU SOLELY FOR YOUR INFORMATION ON A CONFIDENTIAL BASIS AND MAY NOT BE REPRODUCED, REDISTRIBUTED OR PASSED ON, IN WHOLE OR IN PART, TO ANY OTHER PERSON. IN PARTICULAR, THIS PRESENTATION NOR ANY COPY THEREOF MAY BE TAKEN OR TRANSMITTED OR DISTRIBUTED

  3. Slide 3: A pure-play E&P company

    A pure-play E&P company Key facts about DNO Strong business fundament... Operational facts „ A pure-play E&P investment YTD 2005 Production 14.284 BOPD „ Diversified, risk balanced portfolio Reserves (P+P) 30.09.05 73,4 MBOE „ High-margin production profile Financial facts „ Strong reserve growth st

  4. Slide 4: New Growth Cycle

    New Growth Cycle Asset realisation in 2004 P50 Reserves (MBOE) 1996 - 2005 150 „ USD 240 million sales proceeds 144 125 Returning values 100 73 86 „ Cash and shares dividend of 50 64 29 approximately USD 150 million 34 3 since 2003 0 3 15 1996 1997 1998 1999 2000 2001 2002 2003 2004 Q3 05 New growth

  5. Slide 5: Value Creation Cycle

    Value Creation Cycle 10/11/2005 Corporate Presentation November 2005 Slide 5

  6. Slide 6: YTD Performance

    ‘2005 YTD Performance

  7. Slide 7: Highlights

    Highlights Third quarter and year to date Solid financial results „ Strong financial results from producing assets „ Excellent reserve economics Transforming resources to reserves „ Stepped up drilling activity in Yemen „ Getting ready to drill in Northern Iraq „ Expanded North Sea portfolio Deliver

  8. Slide 8: Key figures - Year to date comparison

    Key figures Year to date comparison Production (Bbl/day) Sales (NOK Million) EBIT (NOK Million) Net Profit (NOK Million) 16 000 180 100 25 14 000 160 90 140 80 20 12 000 +5% + 32 % + 74 % + 291 % 120 70 10 000 15 60 100 8 000 50 14,0 80 161 95 13,4 40 10 20 6 000 60 122 30 55 4 000 40 20 5 2 000 20

  9. Slide 9: 2005 Production

    2005 Production - October production above 16 000 BOPD October 05 Production 16 566 BOPD YTD Production 14 284 BOPD (10 mths.) „ Glitne: 1 439 BOPD „ Glitne: 1 470 BOPD „ Tasour: 4 834 BOPD „ Tasour: 5 778 BOPD „ Sharyoof: 5 719 BOPD „ Sharyoof: 6 032 BOPD „ Nabrajah 4 574 BOPD „ Nabrajah 1 004 BOPD

  10. Slide 10: Reserve development

    Reserve development Reserves, proven and probable (mboe) Increased reserves 80 „ 150 % increase in reserves 70 73,4 „ FD&A < 2 USD per barrel 60 + 150 % 50 40 30 29,4 20 10 0 30.09.04 30.09.05 10/11/2005 Corporate Presentation November 2005 Slide 10

  11. Slide 11: Review of Portfolio

    Review of Portfolio

  12. Slide 12: Corporate Presentation November 2005 Slide 12

    10/11/2005 Corporate Presentation November 2005 Slide 12

  13. Slide 13: Yemen - a continued success

    Yemen - a continued success Yemen Licenses Production (BOPD) 16 000 14 000 1 779 12 000 6 628 10 000 4 534 6 024 5 195 4 051 6 145 6 035 8 000 7 783 7 467 6 000 6 738 6 860 6 467 Yemen Highlights 5 506 5 692 4 000 „ Good production performance 2 000 „ Third field on stream (Nabrajah) „ Successful dr

  14. Slide 14: Yemen - Tasour Update

    Yemen - Tasour Update Tasour Geological Map Production (BOPD) DNO Share Tasour # 18 Location 20 000 Tasour # 19 Location 18 000 16 000 14 000 12 000 10 000 8 000 „ Increased production after Tasour # 18 and # 19 infill wells 6 000 „ Recent production decline under 4 000 investigation – Tasour # 19 c

  15. Slide 15: Block 32 - Balan #1 Drilling

    Block 32 - Balan # 1 Drilling Drill Rig Geological Map Preparing 2 production tests: „ One in basement „ One in Sarr carbonates Balan # 1 location 10/11/2005 Corporate Presentation November 2005 Slide 15

  16. Slide 16: Yemen - Sharyoof Update

    Yemen - Sharyoof Update Sharyoof Geological Map Production (BOPD) DNO Share 25 000 20 000 15 000 „ Increased production after infill 10 000 drilling campaign „ 4 additional appraisal wells planned 5 000 in 2006 5 913 6 256 5 924 5 945 6 235 6 253 6 142 5 825 6 143 0 Jan Feb Mar Apr May Jun Jul Aug S

  17. Slide 17: Yemen - Nabrajah Update

    Yemen - Nabrajah Update Nabrajah Geological Map Production (BOPD) DNO Share 5 000 4 500 4 000 3 500 3 000 „ Production from Qishn reservoir from July 2005 2 500 „ Increased production – current gross level 2 000 approximately 7.500 BOPD from Qishn. First basement production could commence during Nov

  18. Slide 18: Nabrajah - Testing Basement Upside

    Nabrajah - Nabrajah # 8 is testing Basement Upside „ Nabrajah # 8 found basement ca. 240 meter higher than Nabrajah # 5 „ Ca. 950 meters of basement drilled „ Production testing to commence shortly 10/11/2005 Corporate Presentation November 2005 Slide 18

  19. Slide 19: Yemen Potential - Qishn & Basement

    Yemen Potential - Qishn & Basement Qishn Geological Map Basement Geological Map Potential „ Large number of prospects at both Qishn and Basement level „ Stepping up exploration drilling activity „ 10 - 12 new exploration wells expected by end 2006 10/11/2005 Corporate Presentation November 2005 Slid

  20. Slide 20: Northern Iraq - A unique opportunity

    Northern Iraq - A unique opportunity Update on Northern Iraq Map of Iraq „ PSA covers approx. 4 000 sq. km. „ Minimum work program includes 250 km 2D seismic + 3 wells within 4 years from June 2004 „ Acquisition 440 km of 2D seismic completed in Q3 „ Drilling site prepared and rig at location „ Dril

  21. Slide 21: North Sea - New portfolio of exploration licenses

    North Sea - New portfolio of exploration licenses North Sea „ High upside potential „ 14 Licenses PL 229, 15% „ 6 as Operator „ One producing UK 211/22B, 60% asset PL 263, 30% „ DNO approved as PL 035, 25% PL 272, 25% operator on NCS and UKCS PL 305/B, 40% PL 028B, 50% Operator „ Drilling activity P

  22. Slide 22: Glitne Update

    Glitne Update License Map Production 2005 DNO Share 20 000 18 000 16 000 14 000 12 000 10 000 8 000 6 000 Glitne Update 4 000 „ YTD production 1 470 BOPD net to DNO 2 000 „ Additional drilling in 2006 under consideration 1 904 1 716 1 645 1 654 1 545 1 349 1 517 1 377 0 556 Jan Feb Mar Apr May Jun J

  23. Slide 23: Norway - Goliath Oil Discovery

    Norway - Goliath Oil Discovery Location Map License Map Goliath Update „ P50 reserves as previously reported = 50 million barrels - 7,5 million barrels net to DNO „ 1 appraisal / exploration on Goliath South prospect currently in progress „ Goliath South P 50 gross estimate is 50 million barrels - 7

  24. Slide 24: Norway - Hummer Prospect

    Norway - Hummer Prospect Location Map License Map Hummer Prospect (PL143CS) „ Swap with Talisman for a 35 % WI in return for a 10 % WI in PL 265 (Ragnarock) „ Operator is Paladin Resources „ 1 exploration well on the Hummer prospect planned to spud early December 2005 „ P50 unrisked resource potenti

  25. Slide 25: Corporate Presentation November 2005 Slide 25

    10/11/2005 Corporate Presentation November 2005 Slide 25

  26. Slide 26: Corporate Presentation November 2005 Slide 26

    10/11/2005 Corporate Presentation November 2005 Slide 26

  27. Slide 27: Corporate Presentation November 2005 Slide 27

    10/11/2005 Corporate Presentation November 2005 Slide 27

  28. Slide 28: UK - Jaguar Prospect

    UK - Jaguar Prospect Location Map License Map 211/16a-5 211/19a-M71 211/19a-9 211/18aF5 211/16b A 211/18-8 A A 211/19-2 211/16a-6 211/16a-6 211/19aF3 A 211/18a A 211/18-3 A 210/20a 211/18aF5 211/16a 211/18-7 211/17 A 211/18aF1 211/18b 211/19a 211/16-2 211/18a-A46 211/16a-A20A 211/16a-A19 211/18-1 A

  29. Slide 29: Equatorial Guinea

    Equatorial Guinea First oil discovery to DNO in Africa „ Second well discovered oil License Map „ Technical evaluations ongoing by operator „ Additional exploration and appraisal wells planned for 2006 „ DNO working interest 5 percent 10/11/2005 Corporate Presentation November 2005 Slide 29

  30. Slide 30: Financial Summary

    Financial Summary

  31. Slide 31: Interim Highlights (LTM)

    Interim Highlights* (LTM) Sales (USD Million) EBITDA (USD Million) Netback (USD Million) Exploration (USD Million) 250 160 14 35 140 12 30 200 120 10 25 100 150 8 20 80 6 15 100 60 4 10 40 50 2 5 20 0 0 0 0 Q4 04 Q1 05 Q2 05 Q3 05 Q4 04 Q1 05 Q2 05 Q3 05 Q4 04 Q1 05 Q2 05 Q3 05 Q4 04 Q1 05 Q2 05 Q3

  32. Slide 32: Third Quarter 2005 - Building on New Growth Strategy

    Third Quarter 2005 - Building on New Growth Strategy Quarterly figures (USD million) Highlights 70 Sales 66 „ Record revenue and operating profit Exploration costs 60 Profit / (loss) from operating activities „ Strong result of operations from producing assets 52 49 50 46 46 „ High investments in de

  33. Slide 33: Third quarter 2005 - Financial Summary

    Third quarter 2005 - Financial Summary USD Million Q3 05 Q2 05 Q1 05 Q4 04 Q3 04 YTD 2005 YTD 2004 Sales 66,07 48,74 45,83 51,67 46,02 160,64 121,49 Gross profit 49,64 37,12 33,13 39,87 33,88 119,87 88,01 Profit / (loss) from operating activities 36,75 25,59 32,53 31,14 19,37 94,87 54,56 Net profit

  34. Slide 34: Results from operations

    Proceeds from production: Results from operations Quarterly YTD FY USD Million Q3 05 Q2 05 Q1 05 Q4 04 Q3 04 2005 2004 2004 Sale of petroleum products 78,5 57,7 53,3 57,4 53,6 189,5 137,2 194,6 Lifting costs -11,1 -6,9 -7,9 -6,9 -6,2 -25,8 -19,0 -26,0 DD&A -5,3 -4,7 -4,7 -4,8 -5,7 -14,7 -13,5 -18,4

  35. Slide 35: Netback to Investment Coverage

    Netback to Investment Coverage - High share of FD&A costs funded by producing assets Netback (RoO) to Total Investments (USD Million) Acquisition and development 40 Netback (RoO) includes 35 „ Development Nabrajah field Acquisition and development 30 „ Acquisition of licenses in Norway Exploration a

  36. Slide 36: Reserve Economics

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  37. Slide 37: Exploration - transforming resources to reserves

    Exploration - transforming resources to reserves „ Strict investment criteria Gross Reserve Growth (MBOE) 75 „ Balanced risk exposure Northern Europe Middle East 60 48 49 „ Applying distinct knowledge and 45 technology 30 27 28 26 „ Smart exploration reduces finding 15 costs 0 2001 2002 2003 2004 20

  38. Slide 38: Development - focus on short lead-time and low costs

    Development - focus on short lead-time and low costs „ Portfolio management and FD&A cost (USD/bbl) optimization models 5 „ Near existing infrastructure 4 3,9 3 3,5 3,3 „ Cost effective solutions 2 „ Focus on short lead time to 1 1,4 1,6 production – example: 0 2001 2002 2003 2004 2005 „ Nabrajah on

  39. Slide 39: Production - focus on high-margin production

    Production - focus on high-margin production Netback RoO (USD/Bbl) „ Low lifting costs 20,0 „ Proactive infill drilling 18,6 15,0 „ Strong and sustainable cash flow 12,1 11,9 14,0 10,0 11,1 11,6 „ Programs for increased oil recovery 5,0 8,9 0,0 Q1 04 Q2 04 Q3 04 Q4 04 Q1 05 Q2 05 Q3 05 Production (B

  40. Slide 40: Top Quartile Performance

    Reserve Economics Top Quartile Performance FDA USD/bbl (P+P) Recycle Ratio USD/bbl (P+P) Reserve Replacement Ratio (P+P) 3,00 4,5 6,00 3-year rolling average 3 years rolling average 4,3 3-years rolling average 5,00 4,1 3,9 2,50 4,00 3,7 3,5 3,00 3,3 2,00 2,00 3,1 2,9 1,00 2,7 1,50 2,5 0,00 2003 2004

  41. Slide 41: Future Outlook

    Future Outlook Significant growth potential

  42. Slide 42: Large upside

    Reserves & Resources (net to DNO): Large upside Mill. barrels as of 30.09.05 Producing Fields „ Tasour Field, Yemen 4,6 „ Sharyoof Field, Yemen 6,7 „ Glitne Field, NCS 0,7 „ Nabrajah Field, Yemen 43,9 Not under development „ Goliath 7,5 „ Hanz & W. Cable 10,0 Total P+P Reserves 73.4 Unrisked Resourc

  43. Slide 43: Future Outlook - Transforming resources to reserves

    Future Outlook - Transforming resources to reserves Production 2005 – 2011 (BOPD) Potential reserves vs. max. unrisked resources 200 000 2 500 Million barrels 180 000 High growth potential Medium growth potential „ Extensive exploration 100 % 160 000 2 000 drilling next 12 to 15 Producing assets 140

  44. Slide 44: Summary & Outlook

    Summary & Outlook Summary Outlook „ Strong financial results „ Low cost reserve addition „ Solid NetBack from production „ Increased exploration activity „ Excellent Reserve Economics „ Financial improvements „ Transforming resources to reserves „ Full value of production from Q1 „ Stepped up drilli

  45. Slide 45: 20 Largest Shareholders

    20 Largest Shareholders - increased share of international investors Holding Percentage Name Account type Citizenship 25 920 741 11,46 CREDIT SUISSE FIRST (EUROPE) LTD./FIRMS GBR 11 595 805 5,13 INCREASED OIL RECOVE NOR 7 560 000 3,34 CORLEONE II AS NOR 6 866 414 3,04 JPMORGAN CHASE BANK CLIENTS TRE

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