Dno Asa Class A · OSL:DNO
Dno Asa Class A — DNO International — Shareholder Meeting (June 2010)
38 slides from Dno Asa Class A's shareholder meeting presentation, Jun 17, 2010
Slide 1: DNO International ASA
DNO International ASA General presentation at the Annual General Meeting, 17 June 2010 Helge Eide Managing Director and President
Slide 2: Proven business model
Proven business model Value creation Going forward • Organic reserve growth at low cost • Increase production from strong reserve base • Cash flow return from high margin production • Add reserves through high potential exploration • Increase in market cap • Build new core business areas Reserves &
Slide 3: Worldwide Operations
Worldwide Operations Det norske oljeselskap ASA Yemen: Oslo • PSA interest in 6 blocks DNO licences Producing Kurdistan region of Iraq: PL1067 Development • PSC interest in 3 blocks United Kingdom: • 50% interest in exploration license P1067 Tawke Mozambique: • 100% interest in the onshore Inhaminga
Slide 4: Organizational setup
Organizational setup Technical resource pool Corporate headquarter President & Managing Director 45 employees Helge Eide Chief Petroleum Engineer Located to Oslo Ole Nygaard 513 employees in total Chief Geologist (corporate and operations) Ståle Monstad Chief Geophysicist Corporate finance Jürgen Ho
Slide 5: Development in P50 Reserves and Resources
4 year development in P50 Reserves and Resources, Class 1-7 MMBOE Annual General Meeting - 17 June 2010 5
Slide 6: Distribution of Reserves and Resources
Distribution of Reserves and Resources DNO’s WI Reserves & Resources as of Year End 2009 Kurdistan: 139.5 Tawke Euphrates: 1.1 Sharnah (BL47): 3.3 Mulle (UK): 10.0 Yemen: 9.9 Eq. Guinea: 1.5 Hekma (BL53): 1.2 Benenan (Erbil): 4.7 Yaleen (BL47): 1.6 Annual General Meeting - 17 June 2010 6
Slide 7: Highly ranked in the MEA region
Highly ranked in the MEA region* 3-year F&D cost (2006-2008) 3-year reserve replacement (2006-2008) Source: JS Herold Inc. Note: * MEA: Middle East and Africa Annual General Meeting - 17 June 2010 7
Slide 8: Average Quarterly Production (WI)
Average Quarterly Production (WI) Average production (WI) 44,578 16,814 13,581 12,442 10,786 Annual General Meeting - 17 June 2010 8
Slide 9: Solid development through 2009 in health and safety performance
Solid development through 2009 in health and safety performance 4,5 4 3,88 3,91 3,78 3,5 3,46 3,2 2,92 3,09 3,04 3 2,85 3 2,76 2,73 2,81 2,67 2,5 2,45 2,39 2,37 Lost Time Incident Frequency 2,2 2 Total Recordable Incident 1,7 Frequency 1,72 1,63 1,59 1,5 1,38 1,56 Vehicle Incident Frequency 1,42 1,4
Slide 10: Kurdistan
KURDISTAN
Slide 11: Increased focus in Kurdistan from international E&P companies
Increased focus in Kurdistan from international E&P companies DNO entry in 2004 Tawke PSC • In the forefront of events DNO • Instrumental in developing the local Dohuk PSC oil industry Industrial achievement by DNO Erbil PSC • Developed flexible full scale E&P operations • Export initiated on 1 June
Slide 12: 2010 – The Gateway to Iraq
Kurdistan Region Trade and Investment Conference 2010 – The Gateway to Iraq • London 15-16 June • More than 500 delegates Annual General Meeting - 17 June 2010 12
Slide 13: Kurdistan Contracts
Kurdistan Contracts Tawke PSC • DNO (55%), Genel Enerji (25%), KRG (20%) • DNO paying interest: 75% • Royalty: 10% • Net entitlement: R-factor Dohuk PSC • DNO (40%), Genel Enerji (40%), KRG (20%) • DNO paying interest: 60% • Royalty: 10% • Net entitlement: R-factor Erbil PSC • DNO (40%), Gasplus Erb
Slide 14: Tawke Main Milestones
Tawke Main Milestones Tie in completed and export of crude oil initiated Long term test production CPF transported and installed at the Tawke field The Tawke Oil Discovery Acquisition of seismic data Initial agreement with KRG 2004 2005 2006 2007 2008 2009 Annual General Meeting - 17 June 2010 14
Slide 15: 5 years from entry to full scale production
5 years from entry to full scale production Agreement Seismic Drilling, Tawke # 1 Tawke test production Tawke export 2004 24 months from entry to first discovery 2006 2006 36 months from first discovery to full scale production 2009 Annual General Meeting - 17 June 2010 15
Slide 16: Tawke Production
Tawke Production Monthly production since start-up 60 000 50 000 bopd 40 000 30 000 Export 20 000 Local sales 10 000 0 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Annual General Meeting - 17 June 2010 16
Slide 17: Tawke export set-up
Tawke export set-up 12” Oil pipeline 40” and 46” Export pipeline State Oil Marketing Organization (SOMO) • Sales at outlet in Turkey Refinery CPF DNO Iraq AS • Tawke field • Tawke pipeline Turkey’s Petroleum Pipeline Corporation (BOTAS) • Pipeline system in Turkey Tawke pipeline Tawke field 230 mill
Slide 18: Local sales
Local sales Annual General Meeting - 17 June 2010 18
Slide 19: Water Purification Project – Kurdistan Region of Iraq
Water Purification Project – Kurdistan Region of Iraq DNO financial commitment of 150 mill USD Annual General Meeting - 17 June 2010 19
Slide 20: Kurdistan Operational Status
Kurdistan Operational Status Tawke • Commenced export of crude oil from Tawke on 1 June which continued until 22 September 2009 • Current focus is on local sales • Ready for export when payment mechanism is in place Benenan discovery • Testing completed • Evaluation of results ongoing Exploration •
Slide 21: Yemen
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Slide 22: Yemen Operational Overview
Yemen Operational Overview Block 52 Block 32 Ansas-1 to be drilled in Next Godah infill wells Q2 2010 planned for Q3 2010 Block 43 Drilling Nabrajah-10S Block 53 (pilot+horizontal) completed Continue Bayoot Results under development evaluation drilling in 2010 Block 72 3D seismic mapping of fracture
Slide 23: Sharnah/Yaalen oil discovery (Block 47)
Sharnah/Yaalen oil discovery (Block 47) Fast-track field development • Resource potential prior to Yaalen-1: 10 million barrels • Resource potential to be re-evaluated after Yaalen-3 final results • Drilling Sharnah-2 in Q2/Q3 • Filing development plan in 2010 • Staged Development • Likely tie-back
Slide 24: Bayoot basement field (Block 53)
Bayoot basement field (Block 53) Production profile Bayoot (gross) Annual General Meeting - 17 June 2010 24
Slide 25: Yemen (BL72): Basement lead
Yemen (BL72): Basement lead • Basement fault blocks with possibilities for oil trapped in fractured basement • These basement structures are located in a ‘look alike’ position to the producing Bayoot and Kharir fractured basement fields • The partnership has decided to dedicate the next exploration
Slide 26: Mozambique
MOZAMBIQUE
Slide 27: Mozambique Summary
Mozambique Summary • Entered 4th exploration period for Inhaminga Block (onshore) • Acquisition of 2D seismic completed 2009 • Next exploration well planned in 2010 • Possible farm-down prior to drilling Annual General Meeting - 17 June 2010 27
Slide 28: The Inhaminga Block - Mozambique
The Inhaminga Block - Mozambique • Block size : 10,715 sqkms • Work Commitment • 600 km 2D seismic (completed) • 1 Exploration well • Several drilling targets identified • DNO currently holds 100% • Farm-out process ongoing Annual General Meeting - 17 June 2010 28
Slide 29: New ventures
New ventures From current core areas • Develop current positions in proven basins, both 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 – East/North Africa regions –
Slide 30: Financials
FINANCIALS eT pe
Slide 31: Quarterly key financials
Quarterly key financials Increased revenues and cash flow • Higher achieved oil prices Revenues EBITDAX EBITDA • Lower administrative expenses Strengthened financial position • Full cash flow coverage of investments • Cash position increased through sale of treasury shares Annual General Meeting - 1
Slide 32: Key financial indicators
Key financial indicators EBITDAX margin EBITDAX Netback Annual General Meeting - 17 June 2010 32
Slide 33: Cash flow coverage of investments
Cash flow coverage of investments Netback coverage Cash flow funding • DNO seeks to fund a major part if its investments from cash flow • The cash flow coverage ratio increased to 1.8x i Q1 2010 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Capex Q3 2009 shown net of WPP liability of NOK 537 million Annua
Slide 34: Capital structure
Capital structure Assets Equity and liabilities Cash: NOK 671 million Net debt to capitalization*: 31 per cent Financial assets: NOK 437 million Equity ratio: 40 per cent *Net interest bearing debt/capitalization Annual General Meeting - 17 June 2010 34
Slide 35: CAPEX adjusted in line with market condition changes
CAPEX adjusted in line with market condition changes Total investment per activity Plan for 2010 Planned investments • Development CAPEX NOK 130 million 1800 • Exploration NOK 230 million 1600 Contingent additional investments 1400 • Development CAPEX NOK 25 million • Exploration NOK 110 million 120
Slide 36: Geographic shareholder distribution
Geographic shareholder distribution 31.12.2009 05.05.2010 • International shareholding in DNO increased to 61.4% Rest of World • RAK Petroleum held 30% as of Sweden 30 April, 2010 Luxembourg • Top 20 shareholders account for Netherland USA 55.9% of total shares UK Norway Annual General Meeting - 17
Slide 37: Outlook
Outlook Continued value creation • Increase production from our strong reserve base • Accelerate development programs in Yemen • Seek additional reserves and resources through selective exploration • Carry out planned 2010 investments, consider additional projects depending on drilling results and a
Slide 38: DNO International ASA
DNO International ASA General presentation at the Annual General Meeting, 17 June 2010 Helge Eide Managing Director and President