Dno Asa Class A · OSL:DNO
Dno Asa Class A — DNO International — Q1 2011 Earnings Presentation
30 slides from Dno Asa Class A's earnings presentation, May 11, 2011
Slide 1: Q1 2011 Presentation
Q1 2011 Presentation 11 May 2011
Slide 2: Agenda
Agenda 1. Welcome and Introduction Tom Bratlie, Communication Director 2. Highlights and Operational Update Helge Eide, Managing Director 3. Q1 Financials Haakon Sandborg, CFO 4. Q&A All Q1 2011 Presentation 2
Slide 3: Q1 Highlights and Operational update
Q1 Highlights and Operational update Helge Eide Managing Director
Slide 4: Q1 2011: Significant increase in production
Q1 2011: Significant increase in production • Export production from Tawke re-commenced in February • April production at Tawke around 65,000 bopd • Peak gross deliveries (DNO and third party) to export pipeline tested at 80,000 bopd • Financial results (excl. Tawke export) • Q1 2011 Revenue: NOK 28
Slide 5: Payment of exports from Tawke
Payment of exports from Tawke DNO has received confirmation by the Kurdistan Regional Government (KRG) that cash advances will be made by the KRG to companies exporting oil from the Kurdistan Region in Iraq. An amount of USD 110 million will be released to DNO by the KRG as payment against some of t
Slide 6: Development in production volumes per quarter 2010-2011
Development in production volumes per quarter 2010-2011 39,945 40,000 35,000 24,956 30,000 25,000 15,748 16,252 bopd (WI) 20,000 12,442 15,000 10,000 5,000 0 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q1 2011 Presentation 6
Slide 7: 30% increase in estimated reserves
RESERVES CLASS 1-3: 30% increase in estimated reserves 6 years development in P50 reserves, Class 1-3 (continued operations) MMBOE 200 194,2 180 162,6 160 151,8 149,4 140 120 100 80 78,7 60 53,5 40 20 0 2005 2006 2007 2008 2009 2010 Q1 2011 Presentation 7
Slide 8: Reserves and resources
RESERVES AND RESOURCES Classification of reserves & resources as of year end 2010 MMBOE 250 Kurdistan: 183.4 Yemen: 10.8 211.2 200 194.2 150 100 Tawke Euphrates: 1.1 Yaleen ph2 (Bl47): 0.3 Mulle (UK): 3.3 Sharnah (Bl47): 0.6 Hekma (Bl 53): 1.2 50 Benenan: 9.0 Eq Guinea: 1.5 1.1 11.4 4.5 0 Total rese
Slide 9: Tawke reservoir characteristics
Tawke reservoir characteristics Fractured carbonate system with oil volumes in the fractures and matrix Bulk Rock Volume In place volumes: § Matrix § Fractures Recoverable reserves
Slide 10: Additional review of DNO reserves
Additional review of DNO reserves • Third party assessment of Tawke field as of 31.12.2010 concludes with P50 ultimate gross reserves of 306 million barrels • DNO’ own revised estimates have taken more recent production information and more proactive reservoir management measures into the model • Wo
Slide 11: Significant volumes exported through DNO facilities in Kurdistan
Significant volumes exported through DNO facilities in Kurdistan • Tawke facilities tested above 70,000 bopd • Total export from DNO operated facilities including third party export tested above 80,000 bopd 90,000 80,000 Third party 70,000 Tawke export 60,000 50,000 40,000 30,000 20,000 bopd 10,000
Slide 12: Bastora-1
Bastora-1 • Horizontal sidetrack completed • Production tests will commence mid May • Erbil license development plan to be filed with the KRG in June First horizontal oil well to be drilled in Kurdistan Q1 2011 Presentation 12
Slide 13: Summail-1
Summail-1 • High impact exploration well in the Dohuk license in Kurdistan • Spudded on 19 April Q1 2011 Presentation 13
Slide 14: Summail-1
Summail-1 • Well defined structure • First results from drilling expected in Q3 2011 • DNO holding 40% WI in the license Q1 2011 Presentation 14
Slide 15: Cash advance of USD 110 million confirmed by KRG
“A first cash advance to DNO of USD 110 million has now been confirmed by the Kurdistan Regional Government and forms a basis for increased activities by DNO in Kurdistan going forward.“
Slide 16: Yemen operations
Yemen operations WI Production bopd 8000 7000 6000 5000 4000 7719 7371 7213 7058 7027 6489 6695 6332 6394 6256 6281 6125 3000 5935 6040 5492 2000 1000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 2010 2011 Block 48 • Production in line with plans • New oil production from the Yaalen
Slide 17: Alsaiq-1 exploration well in Yemen Block 47 currently ongoing
Alsaiq-1 exploration well in Yemen Block 47 currently ongoing • Targeting several prospective horizons with planned total depth into basement Block 48
Slide 18: Key priorities
Key priorities • Sustain production at full capacity • Add new production from fast track development of new discoveries • Continued focused exploration efforts to add new reserves and resources at low costs • Explore strategic options focused on continued increase of shareholder value over time Q1
Slide 19: Financials
FINANCIALS Haakon Sandborg CFO Q1 2011 Presentation 19
Slide 20: Financial summary Q1 2011
Financial summary Q1 2011 Quarterly key financials Stable sales and cash flow 500 • Yemen production and local deliveries in Kurdistan supporting stable first quarter revenues 400 • Export sales from Tawke not included in Q1 revenues 300 Solid financial position Q1 2010 • Extended debt maturities th
Slide 21: Key performance indicators
Key performance indicators Production net entitlement* Achieved oil price Operational costs 18000 120 600 16000 100 500 14000 80 400 12000 NOK million USD/bbl 10000 60 300 BOPD 8000 40 200 6000 20 100 4000 2000 0 0 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 0 Q1
Slide 22: Key financial indicators – before special items
Key financial indicators – before special items EBITDAX margin EBITDAX Netback 80 % 350 350 77 % 70 % 300 300 70 % 67 % 60 % 64 % 64 % 250 250 50 % NOK million NOK million 200 200 40 % 150 150 30 % 100 100 20 % 50 50 10 % 0% 0 0 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q1'10 Q2'10
Slide 23: Quarterly unit lifting costs
Quarterly unit lifting costs USD/Barrel 25 20 19.45 19.04 18.07 17.03 16.58 16.34 15.48 15.10 15 13.51 Total lifting costs 12.59 11.72 Yemen 11.2 11.35 10 10.28 10.27 9.98 Tawke 9.57 8.48 8.46 8.36 8.66 8.17 5 5.31 4.06 4.39 2.43 1.87 0 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010
Slide 24: Quarterly average realized oil price
Quarterly average realized oil price USD/Barrel 80 75 70 65 61.55 60 55 53.54 53.21 51.44 51.88 50 48.65 49.15 45 44.99 40 39.34 35 30 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q1 2011 Presentation 24
Slide 25: Condensed income statement
Condensed income statement Full year Full year NOK million Q1 2011 Q4 2010 Q1 2010 2010 2009 Sales 281.2 302.0 258.6 1,251.8 869.0 Cost of goods sold 140.2 -144.7 -133.3 -618.7 -659.3 Gross profit 141.0 157.3 125.3 633.1 209.7 Dry well cost expensed -28.6 -9.2 - -17.2 -56.2 Seismic and other explora
Slide 26: Cash flow statement
Cash flow statement Full year Full year NOK million Q1 2011 Q4 2010 Q1 2010 2010 2009 Profit / (loss) before income tax -22.5 -40.0 50.5 -206.2 28.0 Non cash items and changes in 8.5 222.4 60.1 933.4 124.0 working capital Taxes and interest paid -59.9 -45.1 -45.1 -202.3 -205.3 Net cash from operatin
Slide 27: Capital structure
Capital structure Assets Equity and liabilities 6000 6000 Non-current assets Other current assets Cash and cash equivalents Shareholders equity Non-current liabilities Current liabilities 5000 5000 Cash: NOK 984 million 4000 4000 Net debt to capitalization* NOK Million NOK Million 15 per cent 3000 3
Slide 28: Outlook 2011
Outlook 2011 • Production • Production volumes from the Tawke field expected to continue at current high levels • Yemen production expected to show some decline • Short term production outlook affected by labor strike at Nexen facilities • Appraisal and development • Test program for Bastora-1 sidet
Slide 29: Welcome back
SECOND QUARTER 2011: 17 AUGUST 2011 WELCOME BACK Q1 2011 Presentation 29
Slide 30: 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