Dno Asa Class A · OSL:DNO
Dno Asa Class A — DNO International — Öhman Raw Materials Day 2010
39 slides from Dno Asa Class A's conference presentation, Jun 2, 2010
Slide 1: Öhman Raw Materials Day 2 June 2010
DNO INTERNATIONAL ASA ÖHMAN RAW MATERIALS DAY 2 JUNE 2010
Slide 2: Investment Highlights
Investment Highlights Potential for substantial increase in production without further investments Strong track record in delivering reserves and resources at low costs Strategic positions in low cost frontier basins in the Middle-East and East-Africa Ability to quickly adjust to changes in market c
Slide 3: Proven business model
Proven business model Solid track record Going forward • Organic reserve growth at low cost • Increase production from strong reserve base • High margin production providing strong cash flow • Build reserves through high potential exploration • Strategic restructuring of NCS business 2P Reserves 1st
Slide 4: Average Quarterly Production (WI)
Average Quarterly Production (W1) Average production (WI) 50,000 45,000 40,000 35,000 30,000 bopd 25,000 20,000 10,786 arog l R A Q TURKEY "Tawke export "Kurdistan "Yemen 44,578 16,814 = , Q2'09 Q3'09 a4'09 aro DNO’s Assets @ Producing Assets © ther Assets Ohman Raw Materials Day 2010 4
Slide 5: Development in P50 Reserves and Resources
4 year development in P50 Reserves and Resources, Class 1-7 MMBOE Öhman Raw Materials Day 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 Öhman Raw Materials Day 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 Öhman Raw Materials Day 2010 7
Slide 8: DNO Activities
Yemen: . PSA interest in 6 blocks Kurdistan region of Iraq: . PSC interest in 3 blocks Mozambique: ° 100% interest in the onshore Inhaminga block Norway: ° 11.66% equity interest in Det norske oljeselskap ASA (DETNOR) United Kingdom: ° 50% interest in exploration license P1067 Equatorial Guinea: ° 5
Slide 9: Kurdistan
KURDISTAN
Slide 10: Kurdistan Summary
Kurdistan Summary Tawke PSC • DNO (55%), Genel Enerji (25%), KRG (20%) • DNO paying interest: 75% • Royalty: 10% • Net entitlement: R-factor Dohuk PSC • DNO paying interest: 60% • Royalty: 10% • Net entitlement: R-factor Erbil PSC • DNO (40%), Gasplus Erbil Ltd Erbil (40%), KRG (20%) • DNO paying in
Slide 11: Kurdistan Operational Overview
Kurdistan Operational Overview 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 12: Tawke Facilities
TAWKE FACILITIES Refinery CPF Annual Global Oil & Gas Investor Forum | 12
Slide 13: Tawke Production
Tawke Production Monthly production since start-up Öhman Raw Materials Day 2010 13
Slide 14: Tawke export pipeline
12” Oil pipeline 40” and 46” Export pipeline Operator responsibilities TURKEY State Oil Marketing Organization (SOMO) Sales at outlet in Turkey S Y R | A DNO Iraq AS TAWKE PSC + Tawke field . e pipeline Turkey's Petroleum Pipeline Corporation (BOTAS) + Pipeline system in Turkey AT TIE IN POINT: Nort
Slide 15: Kurdistan (Erbil): Benenan Discovery
Kurdistan (Erbil): Benenan Discovery Benenan discovery • Hydrocarbons in several reservoirs • 3D seismic acquired post discovery well • Complex structure with high pressure and several fluid systems Hawler-1 The 2010 appraisal program consists of; • Re-entry and testing of Erbil-2 completed Erbil-2 •
Slide 16: Kurdistan leads/prospects
Kurdistan leads/prospects Tawke Dohuk Peshkabir • The 2010 license work program is to fullfill the remaining two well work commitment • Recommencement of exploration drilling expected in Q4 2010 Öhman Raw Materials Day 2010 16
Slide 17: Kurdistan (Dohuk): Summail lead/prospect
Kurdistan (Dohuk): Summail lead/prospect • Summail is close to the Dohuk city • Next exploration well to be drilled in Kurdistan Öhman Raw Materials Day 2010 17
Slide 18: Yemen
YEMEN
Slide 19: Yemen Summary
Yemen Summary 3 Production licenses (Block 32, 43 and 53) • 5 producing assets with gross Production of 18,963 bopd • Q1 DNO WI Production: 7,437 bopd • Q1 DNO NE Production: 4,889 bopd 1 Appraisal and development license • Sharnah/YYaalen (Block 47) 2 Exploration licenses • Block 72 • Block 52 Rese
Slide 20: Yemen Operational Overview
Yemen Operational Overview Block 52 Block 32 Ansas-1 to be drilled in Q2 Next Godah infill wells 2010 planned for Q3 2010 Block 43 Drilling Nabrajah-10S (pilot Block 53 +horizontal) completed Results under evaluation Continue Bayoot development drilling in 2010 Block 72 3D seismic mapping of fracture
Slide 21: Yemen Block 47: Yaalen-3 testing
Yemen Block 47: Yaalen-3 testing Test-1 results (barrels of oil per day) Well logg and interpretation 2000 1800 1600 Oil, bbls/d 1400 1200 1000 Test results 800 Tested 1,400 bopd and 2,650 bopd individually from the two testys 600 Expected capacity, 8,000-10,000 bopd 400 200 0 Öhman Raw Materials Da
Slide 22: 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 to
Slide 23: Yemen (BL43): Nabrajah-10S/S2
Yemen (BL43): Nabrajah-10S/S2 Combined Exploration and Production Well • Re-entry of the top Nabrajah-10 into the deeper reservoir sections • Directionally drilled 8 ” pilot hole • Plugged back and drilled 6” horizontal section from 2887 m to TD @ 3880 m. • Confirmed oil 186 meter deeper than previou
Slide 24: Bayoot basement field (Block 53)
Bayoot basement field (Block 53) Production profile Bayoot (gross) Bayoot 7 on stream in February 2010 • Completed and brought on stream in February • Currently producing at a rate of ca 200 bopd Bayoot 8 on stream in April 2010 • The well put on test-production in April • Well is currently cleaning u
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 w
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 Öhman Raw Materials Day 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 Öhman Raw Materials Day 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
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 • Capex and exploration as guided • Full cash flow coverage of investments • Cash position increased through sale of treasury sha
Slide 32: Key financial indicators
Key financial indicators EBITDAX margin EBITDAX Netback Öhman Raw Materials Day 2010 32
Slide 33: Performance metrics comparison
Performance metrics comparison F&D cost Lifting cost Source: JS Herold Inc. and Company data Öhman Raw Materials Day 2010 33
Slide 34: 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 Öhman Raw
Slide 35: 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 Öhman Raw Materials Day 2010 35
Slide 36: 2010 CAPEX Guiding
2010 CAPEX Guiding Total investment per activity Plan for 2010 • Planned investments • Development CAPEX NOK 130 million • Exploration NOK 230 million • Contingent additional investments • Development CAPEX NOK 25 million • Exploration NOK 110 million • Production • Kurdistan focus on local sales un
Slide 37: 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 30 Sweden April, 2010 Luxembourg Netherland • Top 20 shareholders account for USA 55.9% of total shares UK Norway Öhman Raw Materials Day 2010
Slide 38: 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 39: Disclaimer
Diclaimer 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 abou