Dno Asa Class A · OSL:DNO
Dno Asa Class A — Q1 2006 Earnings Presentation
20 slides from Dno Asa Class A's earnings presentation, May 9, 2006
Slide 1: First Quarter Interim Presentation 2006
FIRST QUARTER INTERIM PRESENTATION Helge Eide 2006 Managing Director Haakon Sandborg Chief Financial Officer
Slide 2: Disclaimer; Highlights First Quarter 2006
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
Slide 3: Key Figures - Working Interest; Production
KEY FIGURES - WORKING INTEREST WI Sales (NOK million) WI EBITDA (NOK million) WI NetProfit (NOK million) +104%* +25%* -144%* 700 350 250 600 300 200 611 311 304 193 500 250 275 150 478 244 151 400 200 100 432 300 150 199 50 300 319 200 100 0 100 50 -50 -26 -14 -81 0 0 -100 Q105 Q205 Q305 Q405 Q106 Q
Slide 4: Reserve Development; Operational Review
RESERVE DEVELOPMENT WI Reserves P+P (MBOE) Strong organic reserve growth 100.3 +257% • 153 percent increase in 2005 • From year end 2004 reserves 120 have increased with more than 250 percent 100 Goliat 80 Jan ’06 60 40 20 0 01.01.05 Expl. Acq. Prod. 31.03.06 © Copyright 2006 DNO ASA ⎮ May 9, 2006 F
Slide 5: License Portfolio
LICENSE PORTFOLIO Northern Europe (24) WI Middle East (8) WI Norway Yemen PL 048B “Glitne Field” 10.00 Block 32 (Tasour) (O) 38.95 PL 048D “Enoch” 10.00 Block 43 (Nabrajah) (O) 56.67 PL 305 (O) 30.00 Block 53 (Sharyoof) 24.45 PL 305 B (O) 30.00 Block 44 (O) 65.10 PL 229 “Goliat” 15
Slide 6: Yemen: A Continued Success
YEMEN A CONTINUED SUCCESS Yemen assets • Six licenses • Five as operator • Three producing assets © Copyright 2006 DNO ASA ⎮ May 9, 2006 First quarter 2006 ⏐ 10 YEMEN THE HIGHLY PROSPECTIVE MASILA AREA Cost effective production: Production (BOPD) • Low cost / high margin production from Qishn and $3
Slide 7: Yemen Block 32 Production History; Qishn Prospects and Leads
YEMEN PRODUCTION HISTORY A success story • Intital production net to DNO (WI) in December 2000 was 2,300 15,208* +663% BOPD 20 000 Tasour Sharyoof Nabrajah • Current production net to DNO is approximately 15,000 BOPD • Active drilling program has 15 000 resulted in increased production and increased
Slide 8: Yemen Block 43 Nabrajah Basement Appraisal; Substantial Potential
YEMEN BLOCK 43 NABRAJAH BASEMENT APPRAISAL Nabrajah-2 Nabrajah-9 NGhaylBinYumain-1 Nabrajah-11 Nabrajah-5 0 0 -40 0 -40 0 -80 0 -80 0 Top Fartaq -12 00 -12 00 Nab10 Nab-8 -16 00 -16 00 Qishn S2 Top Qishn Carbonate -20 00 -20 00 Qishn S2 Top Saar -24 00 -24 00 9 S2 Top S2 Basement 9S Observed -28 00
Slide 9: Northern Iraq: A Unique Opportunity; Tawke #1
NORTHERN IRAQ A UNIQUE OPPORTUNITY Summary - Northern Iraq • First award of two PSA’s in highly prospective area • Memorandum of Understanding (“MOU”) established with Ministry of Oil in Baghdad • Acquisition of 440 km 2D seismic completed in Q3 2005 • First well spudded in November 2005 • Contracte
Slide 10: Northern Europe: High Potential Prospects
NORTHERN EUROPE - NORWAY AND UK: EXPLORATION AND PRODUCTION UPDATE 2006 NORTHERN EUROPE HIGH POTENTIAL PROSPECTS Expanded portfolio • 24 Licenses • Nine as Operator • One producing asset Drilling activity • Secured 340 rig days (6-8 wells) for three years starting Q4 2006 (as part of a consortium) •
Slide 11: Dry Wells on Hummer and Jaguar; New Goliat Oil Discovery
NORTHERN EUROPE DRY WELLS ON HUMMER AND JAGUAR Jaguar (PL211/228)) • TD in March 2006 • The well failed to intersect commercial volumes of HC • The results prove that a working hydrocarbon system exists Hummer (PL143CS) • Plugged and abandoned in February 2006 © Copyright 2006 DNO ASA ⎮ May 9, 2006
Slide 12: Drilling Plan, Operated and Other Licenses
NORWAY DRILLING PLAN, OPERATED LICENSES PL 305 Lie (30 %) • 1 exploration well planned, late 2006 • P50 unrisked resource potential is 68 million barrels – 20,4 million barrels net to DNO Lie PL 341 Thorkildsen (30%) • 1 exploration well planned in 2007 Thorkildsen • P50 unrisked resource potential
Slide 13: 2006 Exploration Drilling Plan; Management Team
2006 EXPLORATION DRILLING PLAN 22 EXPLORATION WELLS IN 2006 – 15 AS OPERATOR NORWAY Four exploration UK wells (one well completed Q1 One exploration 2006) well on the Jaguar prospect (completed Q1 2006) N. IRAQ Continuous drilling EQ. GUINEA Two exploration/ appraisal wells (contingent on rig availi
Slide 14: Financial Review
AN EXCITING AND DEMANDING YEAR Substantial upside potential 2500 • Increased exploration 2000 • Focus on transferring resources to reserves at 1500 low costs 1000 500 0 P+P Reserves Max unrisked prospect resources (E) © Copyright 2006 DNO ASA ⎮ May 9, 2006 First quarter 2006 ⏐ 26 FINANCIAL REVIEW ©
Slide 15: Financial Summary; Condensed Statements
FINANCIAL SUMMARY Quarterly Key Figures (NOK Million) Record sales revenues 450 Sales • Stable production 400 Exploration cost • Full value of production and record 415 EBITDA oil prices 350 Dry well costs of NOK 166 million 300 217 • Exploration wells on Jaguar 250 (UKCS) and Hummer (NCS) Dry well
Slide 16: Cost Development; Tax Issues First Quarter 2006
COST DEVELOPMENT HIGH DRY WELL EXPENSES Cost (NOK Million) Increase in exploration cost 400 • NOK 166 million in pre- 350 tax dry well cost in Q1 Cost of goods sold 300 • Expensed according to the successful effort 250 Other OPEX method 200 Exploration cost • Post-tax impact 150 166 expensed reduced
Slide 17: Capital Structure; Results of Operations
CAPITAL STRUCTURE PREPARED FOR GROWTH Solid financial structure Balance sheets (NOK Million) • Increasing investments in 3 500 property, plant & equipment 3 000 Other current 2 500 assets • Additional long-term funding 2 000 Cash and money secured through bond loan 1 500 market funds 1 000 Non-curre
Slide 18: Production and Price; Sale of Petroleum Variance
PRODUCTION AND PRICE WI Production (BOPD) Achieved oil price net of hedging 16,893* 60,2* 20 000 Tasour Sharyoof Nabrajah Glitne 70 16 870 16 893 60 14 672 60,2 15 000 14 070 13 322 50 49,5 46,4 40 10 000 41,1 37,7 30 20 5 000 10 0 0 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q1 2005 Q2 2005 Q3 2005 Q4
Slide 19: Lifting Costs; Netback to Investment Coverage
LIFTING COSTS TOP TIER PERFORMANCE Quarterly lifting cost (NOK million) Quarterly lifting cost (USD/bbl) 90 9 Northern Europe Middle East 80 8 70 7 60 6 50 5 40 4 30 3 20 2 10 1 0 0 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006 © Copyright 2006 DNO ASA ⎮ May 9, 2006
Slide 20: Strong Reserve Economics; First Quarter Financial Summary
INVESTMENTS STRONG RESERVE ECONOMICS FDA USD/bbl (P+P) Recycle Ratio USD/bbl (P+P) Reserve Replacement (P+P) 2.3 -21%* 6.5 +67%* 8.2 +74%* 5 10 10 5 5 0 0 0 2003 2004 2005 YTD 2003 2004 2005 YTD 2003 2004 2005 YTD 2006 2006 2006 3 years rolling average 3 years rolling average 3 years rolling average