Slide 1: Corporate Presentation
DNO INTERNATIONAL ASA CORPORATE PRESENTATION MERRILL LYNCH E&P CONFERENCE LONDON, 20-22 APRIL 2009
Slide 2: Growth in Cycles
GROWTH IN CYCLES THIRD GROWTH CYCLE RESERVES 1st 2nd 3rd • Building production potential from a strong reserve base 160 • Reduced financial exposure to the offshore 120 MMBOE environment 80 • Focus on low cost areas 40 • Avoided long term capital commitments 00 • Favorable debt structure 96 97 98 99
Slide 3: Key Strategies
KEY STRATEGIES VALUE CREATION KEY ATTRIBUTES EXPLORATION DRIVEN STRATEGY In low cost high potential areas ENTREPRENEURIAL COMPANY Quick decisions/risk taker OPERATING COMPANY Controlling the asset base FOCUS ON LOW COST/HIGH MARGIN PRODUCTION Onshore fields desired basins PURSUE STRATEGIC OPTIONS Pro
Slide 4: Highly Ranked in the MEA Region
HIGHLY RANKED IN THE MEA REGION* 3-YEAR F&D COST (2005-07) 3-YEAR RESERVE REPLACEMENT (2005-07) DNO DNO ASA Marathon Toreador BASF AG Pioneer Petro-Canada Marathon Apache Corp. ConocoPhillips Pioneer Hess Total TransGlobe OMV Addax Repsol Tullow Canadian Apache Corp TransGlobe Canadian Eni Occidenta
Slide 5: Business Overview
Det norske oljeselskap ASA BUSINESS OVERVIEW PL1067 Tawke Benenan (Hawler) Dohuk Sharyoof Tasour Nabrajah Bayoot and Raoq Block 32, 43, 47, 52, 53 and 72 Block P Inhaminga MERRILL LYNCH E&P CONFERENCE | 5
Slide 6: 2008 Key Events
2008 KEY EVENTS PRODUCTION • Production in line with guidance • Successful infill and appraisal drilling DEVELOPMENT • Completed Phase 1 on Tawke in Kurdistan • Commenced construction work for tie-in of Tawke pipeline to Iraq’s northern pipeline system in cooperation with KRG and NOC • Started perman
Slide 7: Q1 2009 Key Events
Q1 2009 KEY EVENTS PRODUCTION AND RESERVES • Production in January-February in line with expectations • Annual statement of reserves shows increase to 163 mboe (P50) DEVELOPMENT • Completed tie-in of Tawke pipeline to Iraq’s northern pipeline system • Permanent development of Bayoot area in Yemen on
Slide 8: Operational Review
OPERATIONAL REVIEW MERRILL LYNCH E&P CONFERENCE | 8
Slide 9: Production Profile
PRODUCTION PROFILE AVERAGE PRODUCTION (WI) 25000 Kurdistan test production Yemen 20000 15000 bopd 10000 5000 0 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Q4 2008 MERRILL LYNCH E&P CONFERENCE | 9
Slide 10: Kurdistan Update
KURDISTAN UPDATE MERRILL LYNCH E&P CONFERENCE | 10
Slide 11: Kurdistan Summary
KURDISTAN SUMMARY KEY EVENTS 2008 • Tawke Phase 1 completed • Initiated work to tie-in Tawke to Northern pipeline system • One discovery on Erbil PSC (Benenan) • Two seismic acquisitions completed on Dohuk and Erbil PSCs GOING FORWARD • Full scale production from Tawke when authorization is given •
Slide 12: Tie-in Project with NOC/KRG Completed
TIE-IN PROJECT WITH NOC/KRG COMPLETED 40” TIE-IN MERRILL LYNCH E&P CONFERENCE | 12
Slide 13: Tie-in Project with NOC/KRG Completed
TIE-IN PROJECT WITH NOC/KRG COMPLETED METERING STATION AT THE TIE-IN AREA MERRILL MERRILLLYNCH LYNCHE&P E&P CONFERENCE CONFERENCE | 13
Slide 14: Tawke – A Fast Track and Robust Project
TAWKE – A FAST TRACK AND ROBUST PROJECT TAWKE KEY FACTS (Gross figures to date) P50 Reserves (MBOE) 230 Finding & Development costs Phase I (USD Million) - Facilities (CPF, pipeline, metering station, tie-in, topping plant) 90 - Wells, incl. testing and completions (14 wells) 175 - Other (3D seismic,
Slide 15: Benenan (Hawler) Discovery
BENENAN (HAWLER) DISCOVERY JURASSIC DISCOVERY WELL #1 IN 2008 • Lower reservoir test; 9,000 bopd and 11 million scf/d gas • Upper reservoir test; 1,500-2,000 bopd, heavier oil APPRAISAL WELL #2 • Indications of hydrocarbons • Well temporarily abandoned for later testing 3D SEISMIC ACQUIRED • More co
Slide 16: Yemen Update
YEMEN UPDATE MERRILL LYNCH E&P CONFERENCE | 16
Slide 17: Yemen Summary
YEMEN SUMMARY KEY EVENTS 2008 • Successful infill drilling • Production of 9,300 bopd – slightly above plan • Replaced produced reserves in 2008 • Initiated Bayoot permanent development • Drilled ten exploration wells and completed two seismic acquisitions (blocks 52 and 72) • Three new discoveries i
Slide 18: Basement Discoveries
BASEMENT DISCOVERIES BAYOOT FIELD • Positive results of the appraisal wells #4, #5 and #6 in 2008 • Development of permanent remote processing facilities to the Sharyoof field ongoing Sharyoof RAOQ DISCOVERY Tasour • Exploration well Raoq #1 discovered oil in Bayoot Godah basement • Forward plan is t
Slide 19: Mozambique
MOZAMBIQUE KEY EVENTS 2008 • Exploration well Sangussi #1 dry • Field work and aero electromagnetic survey • Entered 4th exploration period GOING FORWARD • Assessment of prospective potential and definition of drilling candidates • Target #1 Inhaminga High; adequate data coverage • Target #2 graben p
Slide 20: New Ventures
NEW VENTURES FROM CURRENT CORE AREAS • Develop current positions in proven basins, known and new plays • Follow potential extensions of proven plays into adjacent basins POTENTIAL OUTSIDE KURDISTAN AND YEMEN • Pursue entries into frontier basins in the Middle-East – Eastern Africa region – mainly on
Slide 21: Financial Results
FINANCIAL RESULTS MERRILL LYNCH E&P CONFERENCE | 21
Slide 22: Annual Financials
ANNUAL FINANCIALS SALES EBITDA* AND EBITDAX* NETBACK* 1600 1200 800 1400 700 1000 1200 600 800 1000 500 NOK million NOK million NOK million 800 600 400 600 300 400 400 200 200 200 100 0 0 0 2006 2007 2008 2006 2007 2008 2006 2007 2008 * Before impairment MERRILL LYNCH E&P CONFERENCE | 22
Slide 23: Cash Flow Coverage
CASH FLOW COVERAGE SOURCES AND USES OF CASH CASH FLOW COVERAGE New Interest-Bearing Debt 90 % 2000 Netback before exploration and impairment CAPEX 77 % 80 % 1500 Exploration expensed 70 % 64 % 1000 60 % 500 NOK Millon per cent 50 % 50 % 0 40 % 47 % -500 30 % -1000 20 % -1500 10 % -2000 0% 2005 2006
Slide 24: Capital Structure
CAPITAL STRUCTURE ASSETS EQUITY AND LIABILITY 6000 Cash: 6000 NOK 176 million 5000 5000 Financial assets: 4000 NOK 735 million 4000 Net debt to cap: 3000 3000 48 per cent NOK Million NOK Million 2000 2000 1000 1000 Equity ratio: 0 0 38 per cent 31.12.2007 31.12.2008 31.12.2007 31.12.2008 Other non-c
Slide 25: Conversion of NOK Debt to USD
CONVERSION OF NOK DEBT TO USD BOND MATURITY REDUCED FX EXPOSURE 2000 NOK USD • NOK 920 mill. bond loans converted from 1800 NOK to USD in Q4 2008 463 • 75 per cent of bond loans now in USD 1600 • FX exposure reduced 1400 LONG-TERM MATURITY NOK Million 1200 • Minor near-term maturities 1000 • 80 per
Slide 26: 2009 Capex Guiding
2009 CAPEX GUIDING TOTAL INVESTMENTS PER ACTIVITY PLAN FOR 2009 1800 Exploration Development • Committed Investments • Development CAPEX NOK 135 million 1600 • Exploration NOK 100 million 1400 • Contingent Additional Investments • Development CAPEX NOK 155 million 1200 • Exploration NOK 85 million N
Slide 27: Well Positioned in Current Environment
WELL POSITIONED IN CURRENT ENVIRONMENT • DNO’s strategy during the last years make the company well prepared for the downturn in the market • Activities has been focused on low cost, high potential areas avoiding long term capital commitments • Preparing for increased production at low costs from a
Slide 28: Disclaimer
DISCLAIMER This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current expectations, estimates and projections abo