Slide 1: Presentation of Interim results
Presentation of Interim results Third quarter and first nine months 2003 Managing Director Helge Eide CFO Haakon Sandborg
Slide 2: Agenda
Agenda Operations Financials Lundin transaction Q&A
Slide 3: Highlights
Highlights Q3 results negatively affected by non-recurring items Yemen operations continue positive performance Broom development consent from DTI Long-term financial flexibility secured
Slide 4: Key Figures
Key Figures All figures in million NOK Q3 2003 Q3 2003 * Q3 2002 YTD 2003 YTD 2002 2002 Operating Revenues 467 467 440 1 524 1 266 1 691 EBITDA 227 253 283 876 723 967 Operating Profit 127 159 196 600 432 523 Profit (loss) before Tax 83 155 166 590 234 287 Profit (loss) after Tax (32) 12 46 130 3 (7
Slide 5: Operations
SP eee pr A ° ~~ . e Sar i eae ee ee
Slide 6: DNO in the World
DNO in the World UK Equity Operator Norway Equity Operator Heather 100,00 DNO Jotun Unit 7,00 Exxon/Mobil Broom 55,00 DNO PL 103B 70,00 DNO Thistle 99,00 DNO Glitne & Enoch 10,00 Statoil Solan/Strathm 3,70 Amerada Hess PL 203 15,00 Marathon PL 088BS* 15,00 Marathon PL 036C* 15,00 Marathon Ireland Eq
Slide 7: Monthly Oil Production
Monthly Oil Production Production per business area (bbl/day) 30 000 Production as previously 25 000 guided Average production per 20 000 day above 27.000 bbl Reaffirm target of 26.000 15 000 bbl/day 10 000 5 000 0 2002 2003
Slide 8: Overview - United Kingdom
Overview - United Kingdom Quarterly Production (bbl/day) 15 000 Highlights 10 000 Broom field development 9 077 9 058 5 000 8 352 consent 5 802 5 443 4 985 4 440 4 274 25 percent cost reduction 0 Q401 Q102 Q202 Q302 Q402 Q103 Q203 Q303 on Thistle Business Unit Revenue (MNOK) Segment performance Q3 3
Slide 9: Overview - Norway
Overview - Norway Quarterly Production (bbl/day) 15 000 Highlights 10 000 Increased production from 5 000 6 101 7 680 6 934 6 439 6 338 6 267 6 258 Glitne 4 991 Maintenance shutdown at 0 Q401 Q102 Q202 Q302 Q402 Q103 Q203 Q303 the Jotun field Business Unit Revenue (MNOK) Segment performance Q3 300 2
Slide 10: Overview - International
Overview - International Quarterly Production (bbl/day) 15 000 13 963 Highlights 12 901 12 837 10 000 11 572 11 050 11576 New wells in West Tasour 5 000 7 515 Reserve upgrade in Tasour 3 455 Farm-out in Block 43 0 Q401 Q102 Q202 Q302 Q402 Q103 Q203 Q303 Segment performance Q3 Business Unit Revenue (
Slide 11: Historical Gross Production From Tasour
Historical Gross Production From Tasour 20,000 18,000 16,000 14,000 12,000 Oil, bopd 10,000 8,000 6,000 4,000 2,000 0 1 2 3 2 2 3 0 1 3 1 01 02 03 r-0 r-0 r-0 -0 l-0 l-0 -0 -0 -0 l-0 n- n- n- ct ct ct ct Ju Ju Ju Ap Ap Ap Ja Ja Ja O O O O
Slide 12: Tasour
Tasour Main Tasour 20 MMBoe West Tasour +10 MMBoe East Tasour TBE
Slide 13: Financials
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Slide 14: Financial Highlights 3Q03
Financial Highlights 3Q03 NOK 29 mill. in exploration costs NOK 34 mill. in financial costs NetBack of NOK 92 million in Q3 and NOK 416 million in first nine months of 2003
Slide 15: Income Statement
Income Statement All figures in million NOK Q3 2003 Q2 2003 YTD 03 YTD 02 LTM Q303 LTM Q302 Operating Revenues 467 478 1 524 1 266 1 949 1 537 Exploration and Impairment (29) 1 (61) (93) (82) (94) Operating Expenses , excl DD&A (220) (191) (608) (450) (781) (602) EBITDA 227 294 876 723 1 121 841 EBI
Slide 16: Financial Items
Financial Items All figures in million NOK Q3 2003 Q2 2003 Q1 2003 Q4 2002 Q3 2002 YTD 03 YTD 02 Interest revenues 1 2 3 4 4 5 9 FX-contracts, swaps 1 2 18 18 4 21 46 Agio, other financial revenues 2 4 4 31 (3) 10 2 Financial revenues 4 8 25 53 5 36 57 Interest expenses (7) (11) (12) (14) (15) (29)
Slide 17: Dry Well and Non-Recurring Items
Dry Well and Non-Recurring Items Before tax After tax Profit (loss) 83,2 (31,9) Dry well 167B 23,0 5,0 G&A 3,5 3,5 Provisions IOT/PDR 5,0 5,0 Provisions financial costs 30,0 20,0 Write-down PDR bond 10,0 10,0 Profit adjusted 154,7 11,6
Slide 18: BS - Assets
BS - Assets All figures in million NOK 30.09.2003 30.06.2003 31.03.2003 31.12.2002 31.12.2001 Fixed Assets 1 665 1 539 1 427 1 379 1 372 Financial Fixed Assets 266 269 269 256 485 Intangible Assets 141 133 135 142 150 Total Fixed Assets 2 072 1 940 1 830 1 777 2 006 Cash and Cash Equiv 173 223 267 8
Slide 19: BS - Equity and Liabilities
BS - Equity and Liabilities All figures in million NOK 30.09.2003 30.06.2003 31.03.2003 31.12.2002 31.12.2001 Shareholders´equity 1 040 1 121 1 021 902 942 Interest-bearing long-term debt 617 456 579 553 651 Provisions for liabilities and charges 383 395 382 346 441 Total long-term liabilities 999 8
Slide 20: Cash Flow
Cash Flow All figures in million NOK Q3 2003 Q2 2003 Q1 2003 Q4 2002 Q3 2002 YTD 03 YTD 02 Consolidated profit before tax 83 207 299 54 166 590 234 Taxes paid for the period (135) (207) (119) (156) (97) (461) (259) Depreciation, depletion and amort. 84 81 73 156 84 239 277 Associated companies 0 0 0
Slide 21: Oil Price vs. FX (YTD)
Oil Price vs. FX (YTD) Oil price development (USD/BBL) FX development (NOK/USD) 40 8,0 35 7,5 30 7,0 25 20 6,5 J F M A M J J A S J F M A M J J A S
Slide 22: Oil Production (Quarterly and LTM)
Oil Production (Quarterly and LTM) Quarterly production (bbl/day) LTM production (bbl/day) 30 000 30 000 13 963 UK NORWAY YEMEN 12 837 UK NORWAY YEMEN 12 813 25 000 25 000 12 680 11 576 12 365 11 572 12 901 10 775 11 050 20 000 7 515 20 000 8 352 6 295 15 000 6 267 15 000 3 286 6 258 4 232 4 991 3 2
Slide 23: Revenue Development (Quarterly and LTM)
Revenue Development (Quarterly and LTM) Quarterly Revenue per business area (MNOK) LTM Revenue per business area (MNOK) 700 2 500 NCS UKCS International IOT NCS UKCS International IOT 600 2 000 500 1 500 400 300 1 000 200 500 100 0 0 Q401 Q102 Q202 Q302 Q402 Q103 Q203 Q303 Q401 Q102 Q202 Q302 Q402 Q
Slide 24: Cost Development (Quarterly)
Cost Development (Quarterly) Direct field expense (MNOK.) Direct field expense per bbl (MNOK.) 200 12 NCS UKCS International 179 180 168 165 10 10,62 160 9,44 9,33 140 8,84 122 8 117 120 120 112 115 7,61 7,61 7,03 6,75 100 6 80 4 60 40 2 20 0 0 Q401 Q102 Q202 Q302 Q402 Q103 Q203 Q303 Q401 Q102 Q202
Slide 25: Direct Field Expense per Barrel
Direct Field Expense per Barrel UK (USD) Norway (USD) International (USD) 25 25 25 22,5 21,2 20 20,3 20,8 20 20 19,6 19,2 16,4 15 15 15 14,4 10 10 10 8,1 7,2 6,5 6,7 6,7 6,4 5 5 5,3 5 4,8 2,8 2,7 3,0 3,0 3,0 2,7 2,4 2,6 0 0 0 Q401 Q202 Q402 Q203 Q401 Q402 Q401 Q402
Slide 26: EBIT per Business Unit (Quarterly and LTM)
EBIT per Business Unit (Quarterly and LTM) Quarterly EBIT per business unit (MNOK) LTM EBIT per business unit (MNOK) 350 NCS UKCS International 1000 NCS UKCS International 312 920 900 854 868 300 800 250 216 221 700 645 200 171 600 164 154 505 150 500 411 103 376 378 400 100 300 50 30 200 0 100 -50
Slide 27: Group NetBack (Quarterly and LTM)
Group NetBack (Quarterly and LTM) Quarterly Group Netback (MNOK.) LTM Group Netback (MNOK.) 400 1400 Taxes paid Net Back Taxes paid Net Back 350 1200 236 597 300 642 504 1000 87 186 552 250 132 88 800 549 92 200 520 207 146 600 546 538 617 150 579 156 135 489 400 100 85 117 119 415 97 292 200 50 221
Slide 28: Key Figures
Key Figures Q3 2003 Q2 2003 YTD 2003 YTD 2002 2002 Production per day 24 919 28 153 27 443 22 023 22 399 Direct Field Cost per barrel 10,62 9,33 9,56 8,22 7,19 CROGI (actual) 14,4 % 14,3 % 23,1 % 24,4 24,2% CROGI (normalized) 10,0 % 10,8 % 15,9 % 16,8 16,8% ROACE (actual) -6,5 % 15,1 % 12,7 % 2,8 -2
Slide 29: Value Creation
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Slide 30: Sale of Assets
Sale of Assets The transaction includes The transaction excludes DNO Britain Limited Yemen 100% Heather field 38,95 % Tasour Field 99% Thistle field 24,45 % Sharyoof Field 55% Broom field 50 % in Block 43 Seven Heads (IPDL) Norwegian assets Norwegian assets 10 % Glitne 7% Jotun field
Slide 31: DNO - after Transaction
DNO - after Transaction Norway Equity Operator Glitne & Enoch 10,00 Statoil Actively pursue new investment opportunities in the North Sea and internationally Eq. Guinea Equity Operator Block P 5,00 Ocean Energy Yemen Equity Operator Tasour 41,00 DNO Sharyoof 24,45 Dove Energy Block 43 73,00 DNO Moza
Slide 32: Annual Growth
Annual Growth Oil production (MMBoe) DNO 2P (MMBoe) 30 000 160 140 145 25 000 26 453 120 126 22 399 20 000 100 15 000 80 86 13 235 60 63 10 000 40 6 920 34 5 000 20 2 364 2 886 0 0 1998 1999 2000 2001 2002 LTM 1999 2000 2001 2002 YTD 2003
Slide 33: Annual Profitability
Annual Profitability Revenue (MNOK) EBIT (MNOK) 2000 1 250 1 946 1 150 1800 EBITDA EBIT 1 050 1121 1600 1 691 950 967 1400 850 1200 750 1 199 650 1000 672 636 550 800 450 523 600 673 350 367 250 400 244 150 200 266 17 9 121 50 192 0 -50 -13 -8 1998 1999 2000 2001 2002 LTM 1998 1999 2000 2001 2002 LT
Slide 34: Transaction - Reserves DNO 2P
Transaction - Reserves DNO 2P DNO 2P (MMBoe) Before transaction DNO 2P (MMBoe) After transaction 160 160 140 145 140 Sold assets 130 120 126 120 126 100 100 80 86 80 86 60 63 60 63 40 40 34 34 20 20 15 0 0 1999 2000 2001 2002 2003 1999 2000 2001 2002 2003
Slide 35: Transaction - Production (bbl/day)
Transaction - Production (bbl/day) Prior to transaction (in thousands) Post transaction (in thousands) 30 30 27 Sold assets 14 25 25 22 22 20 20 15 15 13 13 13 10 10 7 7 5 5 2 3 2 3 0 0 1998 1999 2000 2001 2002 LTM 1998 1999 2000 2001 2002 LTM
Slide 36: Growth in Total Assets and Equity vs. MCAP
Growth in Total Assets and Equity vs. MCAP Total assets and equity (MNOK) MCAP (MNOK) 3000 1600 1400 1 466 2500 CAGR: 39.46% 2 526 CAGR: 55.91% 2 353 1200 2000 2 041 1000 963 1500 800 894 1 597 791 722 600 1000 1 040 914 942 902 400 798 797 417 500 658 200 374 421 223 312 42 177 0 0 1996 1997 1998 1
Slide 37: Cash Effects of Transaction
Cash Effects of Transaction All figures in million NOK 30.09.2003 At closing Cash 173 173 From transaction 0 1 680 Total cash 173 1 853 Current debt (632) (632) Free cash (net debt) (459) 1 221 Cash flow from retained assets to DNO - until closing - not included
Slide 38: Going Forward
Going Forward A proactive move Increased flexibility Actively pursue investment opportunities Continued focus on North Sea Utilize leading NCS in-house expertise Building on a successful track-record as Operator Financial strength Continued growth in shareholder value - from a new foundation
Slide 39: APPENDICES
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Slide 40: The Broom Project
The Broom Project Broom Project overview DNO 2P reserves: 25 MBOE CAPEX phase 1: 75 MUSD * First oil is expected in the summer of 2004
Slide 41: Project Norway
Project Norway Development Schematic Project overview DNO 2P reserves: 40 MBOE BOA EAST KAMELEON CAPEX first oil: 38 MUSD Water FPSO First Oil 2005 / 2006 Disposal Gas Export KAMELEON HEIMDAL GAS KNELER CENTRE PL150 KEY Oil Flowline Umbilical Gas Lift Produced Water Injection Gas Export Riser Base D
Slide 42: Seven Heads
Seven Heads Project overview DNO 2P reserves: 7 MBOE CAPEX: 26,4 MUSD Production is expected to commence in Q4 2004 Gas contract with Innogy
Slide 43: Cash return on gross investments
Cash return on gross investments CROGI Actual CROGI Normalized 45,00 % 30,00 % 40,00 % 42 % 25,00 % 26 % 35,00 % 30,00 % 20,00 % 29 % 19 % 25,00 % 17 % 15,00 % 23 % 20,00 % 20 % 14 % 15,00 % 10,00 % 11 % 11 % 11 % 10 % 15 % 15 % 14 % 14 % 10,00 % 5,00 % 5,00 % 0,00 % 0,00 % Q401 Q102 Q202 Q302 Q402
Slide 44: Share price development
Share price development DNO Share Price last 12 months DNO (NOK) OSE (Index) 30 180 DNO OSE10 Oslo Børs All-share Index 28 170 26 160 24 150 22 140 20 130 18 120 16 14 110 12 100 Oct - 2002 Jan - 2003 Apr - 2003 Jul - 2003
Slide 45: Shareholders
Shareholders NAME SHARES PERCENT NATIONALITY 1 INCREASED OIL RECOVERY 6 563 142 11,68 NOR 2 DET STAVANGERSKE DAMSKIPSSELSKAP 2 000 000 3,55 NOR 3 THE LAW DEBENTURE TRUST 1 999 642 3,55 GBR 4 LARSEN OIL & GAS AS 1 802 148 3,20 NOR 5 SKAGEN VEKST 1 600 051 2,84 NOR 6 UNISTAR HOLDINGS INC 1 550 500 2,7