Dno Asa Class A · OSL:DNO

Dno Asa Class A — Q1 2007 Earnings Presentation

57 slides from Dno Asa Class A's earnings presentation, May 16, 2007

  1. Slide 1: First Quarter 2007 Results Announcement

    FIRST QUARTER 2007 RESULTS ANNOUNCEMENT Helge Eide President and Managing Director Haakon Sandborg Chief Financial Officer

  2. Slide 2: 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

  3. Slide 3: Agenda

    FIRST QUARTER 2007 AGENDA  Summary and Key Events Pipes in Yemen  Financial Review  Operational Review  Yemen  Kurdistan  Norway  Closing remarks © Copyright 2007 DNO ASA | May 16 2007 | First Quarter 2007 3

  4. Slide 4: Summary and Key Events

    FIRST QUARTER 2007 SUMMARY AND KEY EVENTS © Copyright 2007 DNO ASA | May 16 2007 | First Quarter 2007 4

  5. Slide 5: Key Events

    FIRST QUARTER 2007 KEY EVENTS  High focus on Kurdistan  Tawke development in Kurdistan has taken further steps towards completion  New oil discovery at the eastern extension of the Tawke area, confirmed by Tawke # 3  Start-up and extended well tests were completed and a maximum flow-rate of 12,0

  6. Slide 6: Production

    FIRST QUARTER 2007 PRODUCTION Production 2006 - 2007 bbl/day Production Q1 2007  Yemen: 11,823 bopd  NCS: 861 bopd  Group: 12,684 bopd © Copyright 2007 DNO ASA | May 16 2007 | First Quarter 2007 6

  7. Slide 7: Ongoing Activities

    FIRST QUARTER 2007 ONGOING ACTIVITIES  Kurdistan Drilling rig at Tawke  Preparing for Tawke oil delivery by trucking to domestic market  Continuing final hook-up and commissioning work on Tawke facilities  Further appraise and evaluate the new oil discovery (Tawke # 3)  Yemen  Drlling of sever

  8. Slide 8: Financial Review

    FIRST QUARTER 2007 FINANCIAL REVIEW © Copyright 2007 DNO ASA | May 16 2007 | First Quarter 2007 8

  9. Slide 9: Summary

    FINANCIAL REVIEW SUMMARY Quarterly Key Figures NOK million High exploration activity  Increased revenues  Higher production (net entitlement)  Lower oil price  High pre-tax expensed exploration  Dry well costs on Zita and Yemen- prospects  Stable EBITDA and netback  Development investments as

  10. Slide 10: Key Figures

    FINANCIAL REVIEW KEY FIGURES Quarterly figures Full year Barrels of oil and oil equivalents Q1 2007 Q4 2006 Q1 2006 2006 2005 Working interest production per day 12 685 13 716 16 893 14 831 14 741 Net entitlement production per day 9 507 8 362 11 481 9 229 8 685 NOK Million Q1 2007 Q4 2006 Q1 2006 2

  11. Slide 11: Income Statement

    FINANCIAL REVIEW INCOME STATEMENT Quarterly figures Full year NOK Million Q1 07 Q4 06 Q3 06 Q2 06 Q1 06 2006 2005 Sales 290,6 277,5 283,7 359,0 415,1 1 335,2 792,7 Cost of goods sold -124,2 -127,1 -98,3 -98,3 -122,0 -445,7 -386,2 Gross profit 166,4 150,4 185,4 260,6 293,1 889,5 406,5 Tariffs and tra

  12. Slide 12: Cost of Goods Sold

    FINANCIAL REVIEW COST OF GOODS SOLD Cost of Goods Sold per quarter NOK million Lower lifting costs  Reduced lifting costs in Yemen due to lower production volumes  Increased lifting costs in Norway, due to cost escalation  DD&A increases from Q4 2006 due to reserve reduction on the Nabrajah-field

  13. Slide 13: Exploration Activity

    FINANCIAL REVIEW EXPLORATION ACTIVITY Expensed and Capitalized Exploration NOK million Extensive exploration  Expensed NOK 158 million  Dry well costs NOK 98 million  Other exploration NOK 60 million  NOK 5 million in Expensed capitalized exploration  Primarily work on Goliat Capitalized © Copy

  14. Slide 14: Exploration per Segment

    FINANCIAL REVIEW EXPLORATION PER SEGMENT Exploration Expensed NOK million Exploration Expensed  Northern Europe  Zita dry well cost: NOK 51 million  G&G and other: NOK 44 million  Yemen  Dry well cost: NOK 47 million  G&G and other: NOK 7 million  Kuridstan  G&G and other: NOK 7 million  Af

  15. Slide 15: Tax Position Yemen

    FINANCIAL REVIEW TAX POSITION YEMEN Tax return and exploration in Yemen NOK million Tax refund position  Fast tax recovery mainly over two years for producing blocks  Building cost carry forwards for non- producing blocks © Copyright 2007 DNO ASA | May 16 2007 | First Quarter 2007 15

  16. Slide 16: Tax Position Norway

    FINANCIAL REVIEW TAX POSITION NORWAY Tax return and exploration in Norway NOK million Tax refund position  Increasing petroleum tax refund positions reducing post-tax costs  Tax rules support extensive DNO exploration program © Copyright 2007 DNO ASA | May 16 2007 | First Quarter 2007 16

  17. Slide 17: Net Financial Items

    FINANCIAL REVIEW NET FINANCIAL ITEMS Net financial items per quarter NOK million Increased net financial costs  Higher net interest expense  Higher unrealized FX loss © Copyright 2007 DNO ASA | May 16 2007 | First Quarter 2007 17

  18. Slide 18: Capex by Segment

    FINANCIAL REVIEW CAPEX BY SEGMENT CAPEX split 1st quarter 2007 (NOK 288 Million) Percent CAPEX per segment quarterly NOK million © Copyright 2007 DNO ASA | May 16 2007 | First Quarter 2007 18

  19. Slide 19: Capex Kurdistan

    FINANCIAL REVIEW CAPEX KURDISTAN Capitalized Investments NOK million High investments in Kurdistan  Q1 investments of NOK 211 mill. (100%) in drilling, pipeline and production facilities  Total investments to date of approximately NOK 970 million  Drilling (42%)  Pipeline & production facilities

  20. Slide 20: Capital Structure

    FINANCIAL REVIEW CAPITAL STRUCTURE Balance sheet (Assets) NOK million  Last Twelve Months  174% growth in PPE  55% increase in interest bearing debt  Q1 2007  New long-term bond debt NOK 300 million Balance sheet (Debt and Equity) NOK million  New NOK 290 million tax refund financing for NCS e

  21. Slide 21: Sources and Uses of Cash

    FINANCIAL REVIEW SOURCES AND USES OF CASH Sources and uses of cash per quarter NOK million Sources Uses © Copyright 2007 DNO ASA | May 16 2007 | First Quarter 2007 21

  22. Slide 22: Cash Flow Statement

    FINANCIAL REVIEW CASH FLOW STATEMENT Quarterly figures Full year NOK Million Q1 07 Q4 06 Q3 06 Q2 06 Q1 06 2006 2005 Profit from operations before exploration 159,6 154,1 170,6 242,3 282,1 849,1 317,3 Exploration expenses -158,0 -155,7 -82,4 -110,8 -216,8 -565,7 -160,6 Taxes paid, DDA, other 2,1 -32

  23. Slide 23: KPI per Barrel

    FINANCIAL REVIEW KPI PER BARREL Achieved Oil Price USD/bbl Lifting cost USD/bbl DD&A USD/bbl EBITDA (including asset sale proceeds) USD/bbl © Copyright 2007 DNO ASA | May 16 2007 | First Quarter 2007 23

  24. Slide 24: Q1 2007 Summary and Outlook

    FINANCIAL REVIEW Q1 2007 SUMMARY AND OUTLOOK  Exploration Led Strategy  Quarterly financials reflect high exploration activity  Post-tax exploration costs reduced by increasing tax refunds and cost oil positions  Efficient Operations  Stable cash flow from high margin production  Confirming fa

  25. Slide 25: Operational Review

    FIRST QUARTER 2007 OPERATIONAL REVIEW © Copyright 2007 DNO ASA | May 16 2007 | First Quarter 2007 25

  26. Slide 26: Worldwide Portfolio

    OPERATIONAL REVIEW WORLD WIDE PORTFOLIO 37 licenses in six countries on three continents 18 licences as Operatior  NORTHERN EUROPE  UK and Norway  25 Licenses (9 as Operator)  One producing asset  Large exploration potential  Minimized financial exposure from exploration  MIDDLE EAST  10 Lic

  27. Slide 27: Yemen: Well Program 2007

    OPERATIONAL REVIEW YEMEN: WELL PROGRAM 2007 Yemen Assets 13 exploration wells  Operated by DNO  BL 32: 3 wells - 0 completed  BL 43: 2 wells - 1 completed  BL 44: 3 wells - 1 completed  BL 72: 1 well - 1 completed  BL 47: 1 well - 0 completed  Operated by others  BL 53: 3 wells - 1 completed

  28. Slide 28: Yemen: Block 32

    OPERATIONAL REVIEW YEMEN: BLOCK 32 Block 32  Tasour Field  Q1 2007 gross production - 8,900 bopd  Test of Tasour # 23 (deeper levels) planned in Q2 2007  Godah Field  Q1 2007 gross production - 1,377 bopd  Godah # 5 in progress - to be followed by # 6 back-to-back  Start of Godah # 7 planned

  29. Slide 29: Yemen: Block 53

    OPERATIONAL REVIEW YEMEN: BLOCK 53  Sharyoof Field Block 53  Q1 2007 gross production - 9,000 bopd  Sharyoof # 24 infill production well completed in February Producing oil field  Recent re-completion of Sharyoof # 20 added > 2,000 Oil discovery wells bopd in gross production Dry wells  Sharyoo

  30. Slide 30: Yemen: Block 43

    OPERATIONAL REVIEW YEMEN: BLOCK 43  Nabrajah Field Block 43  Q1 2007 gross production - 7,500 bopd  New Qishn locations identified from new 3-D  Nabrajah #12 completed in March at initial gross flow rate of 1,450 bopd  Nabrajah #14 currently in progress  New 3-D has also identified drilling ta

  31. Slide 31: Yemen: Summary and Outlook

    OPERATIONAL REVIEW YEMEN: SUMMARY AND OUTLOOK Yemen Assets YTD Summary 2007 Outlook  Production 11,823 bopd  2007 production guidance remain unchanged  4 exploration wells completed (no discoveries)  9 additional exploration wells planned  2 successful infill wells completed - 3 currently in pr

  32. Slide 32: Kurdistan: Key Events

    OPERATIONAL REVIEW KURDISTAN: KEY EVENTS Iraq  Progressed first phase of Tawke Facililities towards completion (CPF and Pipeline)  Completed start-up and extended well testing of first well (oil collected while testing)  Installed tanker trucking facilities with initial capacity of 5,000 bopd, in

  33. Slide 33: Kurdistan: Tawke Cross Section

    OPERATIONAL REVIEW KURDISTAN: TAWKE CROSS SECTION  Upper reservoir I Tawke - West and East structures - Cross Section  Initial producing horizon  Confirmed by Tawke # 1  Oil water contact confirmed by Tawke # 6 & 8 New oil discovery:  Tawke # 3 drilled at the 7,000 boed eastern extension is bel

  34. Slide 34: Kurdistan: Tawke Well Status

    OPERATIONAL REVIEW KURDISTAN: TAWKE WELL STATUS  Initial Producing Horizon Drilling rig at Tawke  6 wells completed to date, Tawke 1, 1A, 2, 4, 5 and 6  Tawke # 6 drilled as a WI and flowed water – OWC now defined between Tawke # 6 and Tawke # 2  Extended flow test of Tawke # 5 ended with max te

  35. Slide 35: Kurdistan: Tawke Discoveries

    OPERATIONAL REVIEW KURDISTAN: TAWKE DISCOVERIES Upper Reservoir I Lower Reservoir II  Observation to Date  Observation to Date  High initial flow rate  High initial flow rate  Natural flow - overpressure in the reservoir  Natural flow - overpressure in the reservoir  Good fracture communicati

  36. Slide 36: Kurdistan: Tawke Development

    OPERATIONAL REVIEW KURDISTAN: TAWKE DEVELOPMENT Key Components © Copyright 2007 DNO ASA | May 16 2007 | First Quarter 2007 36

  37. Slide 37: Kurdistan: Transport from Tawke (Trucking)

    OPERATIONAL REVIEW KURDISTAN: TRANSPORT FROM TAWKE Trucking Options  Status  5,000 bopd mobile trucking facilities available end of March  Expanded with mobile trucking facilities with capacity of 10,000 bopd end of May  Remaining Work  From end June, replace initial temporary 5,000 trucking ca

  38. Slide 38: Kurdistan: Transport from Tawke (Pipeline)

    OPERATIONAL REVIEW KURDISTAN: TRANSPORT FROM TAWKE  Status  42 km of 12” pipeline from Tawke Field to tie-in point completed  Pipeline capacity is 50,000 bopd  Remaining Work  Tie-in to 40” & 46” northern strategic pipelines - scheduled end June  From end June, export from Tawke when oil flow

  39. Slide 39: Kurdistan: Tawke Facilities

    OPERATIONAL REVIEW KURDISTAN: TAWKE FACILITIES  Status  CPF arrived Tawke in February  Installation, hook-up and commissioning ongoing  Remaining Work  Final hook-up and commissioning and testing  From end June, oil from Tawke wells will be processed at the CPF  From July/August, diesel toppi

  40. Slide 40: Kurdistan: Oil Delivery Options

    OPERATIONAL REVIEW KURDISTAN: OIL DELIVERY OPTIONS Stage 1: May/June  Oil trucked directly from wells to domestic market  Trucking capacity of 15,000 bopd  Volume subject to domestic demands Stage 2: July  Production from wells processed through CPF and transported via 12” export pipeline to tie

  41. Slide 41: Kurdistan: Summary & Outlook

    OPERATIONAL REVIEW KURDISTAN: SUMMARY & OUTLOOK  Early production directly from wells delivered to domestic market by trucking expected to commence by end of May  CPF commissioning and first pipeline tie-in expected completed in June  Final installation of pipeline export options for Tawke oil, e

  42. Slide 42: NCS Portfolio

    OPERATIONAL REVIEW NCS PORTFOLIO Northern Europe Assets  Exploration licenses  NCS - 23 licenses, 8 as Operator  UKCS – 2 licenses, 1 as Operator  Producing fields  Glitne, in production (10%)  Enoch, start production Q2 2007 (2 %)  Drilling Plan next 12 months  8 exploration wells  1 devel

  43. Slide 43: NCS: Drilling - Firm Wells

    OPERATIONAL REVIEW NCS: DRILLING - FIRM WELLS NCS Drilling schedule next twelve months 2007/2008 2007 2008 June July August September October November December January February March April May June July August September October Lie 69 Mbbl, DNO 30 % (PL305) Thorkildsen 82 Mbbl, DNO 30 % (PL341) Drau

  44. Slide 44: NCS: PL305 - Lie

    OPERATIONAL REVIEW NCS: PL305 - LIE Lie prospect  Summary  The Lie Prospect will be drilled with the first slot on Bredford Dolphin in 2007  The drilling program has been approved by NPD  Modification and commissioning work in final stage  Rig approval process by PSA and DNO ongoing  First wel

  45. Slide 45: Closing Remarks

    FIRST QUARTER 2007 CLOSING REMARKS © Copyright 2007 DNO ASA | May 16 2007 | First Quarter 2007 45

  46. Slide 46: Strengthened Organization

    CLOSING REMARKS STRENGTHENED ORGANIZATION Corporate Functional Structure DNO Group Total Staff: 479 Corporate functions Staff: 9 President and Managing Director Helge Eide Chief Operating Officer QHSE Manager Ivar Brandvold Ole-Andreas Isdahl Chief Financial Officer Haakon Sandborg *Sub-surface reso

  47. Slide 47: CSR

    CLOSING REMARKS CSR 1. Corporate citizenship 2. CSR Components 3. Triple Bottom Line 4. Corporate Governance Our corporate citizenship The CSR components Our job is to optimize our Our corporate defines our role in local reflect our stakeholders’ triple bottom line, that is governance shall ensure a

  48. Slide 48: Developing Value

    CLOSING REMARKS DEVELOPING VALUE  TOWARDS PRODUCTION FROM TAWKE  STRONG PRE-EXPLORATION PROFITS  CONTINUED FOCUS ON EXPLORATION  INCREASED PRODUCTION IN 2007 © Copyright 2007 DNO ASA | May 16 2007 | First Quarter 2007 48

  49. Slide 49: Welcome Back

    SECOND QUARTER 2007 PRESENTATION: 22 AUGUST 2007 WELCOME BACK Spring in Kurdistan © Copyright 2007 DNO ASA | May 16 2007 | First Quarter 2007 49

  50. Slide 50: Appendix

    CLOSING REMARKS APPENDIX © Copyright 2007 DNO ASA | May 16 2007 | First Quarter 2007 50

  51. Slide 51: NCS: Goliat Discovery

    PROSPECT SHEET NCS: GOLIAT DISCOVERY Goliat  Summary  Following Goliat south well, P50 reseves / resources increased to 250 million boe - 37,5 million boe net to DNO  Goliat West well did not encounter hydrocarbons – but oil was found in side-track well  The North prospect which will be drilled

  52. Slide 52: NCS: PL341 - Thorkildsen

    PROSPECT SHEET NCS: PL341 - THORKILDSEN Thorkildsen prospect  Summary  The Thorkildsen Prospect will be drilled with Bredford Dolphin in 2007.  The Thorkildsen Prospect is a 4-way dip closure of Paleocene age  The prospect has a total of 82 million boe of oil, in unrisked recoverable resource po

  53. Slide 53: NCS: PL001B - Draupne

    PROSPECT SHEET NCS: PL001B - DRAUPNE Draupne prospect  Summary  The Draupne Prospect will be drilled with the Bredford Dolphin in 2007  The Draupne prospect is a 4-way dip closure of Jurassic age  The prospect has a total of 50 million boe of oil, in unrisked recoverable resource potential (DNO

  54. Slide 54: NCS: PL265 - Ragnarrock

    PROSPECT SHEET NCS: PL265 - RAGNARROCK Ragnarock prospect  Summary  The Ragnarrock Prospect will be drilled in 2007 with the rig West Epsilon  The Ragnarrock prospect is a stratigraphic trap within the Chalk  The presence of oil is proved by well 16/2-1, and the productivity will be tested by th

  55. Slide 55: NCS: PL029B - Freke

    PROSPECT SHEET NCS: PL029B - FREKE Freke Prospect  Summary  The Freke Prospect is proposed drilled in 2007  The Freke prospect is a 4-way dip closure of Jurassic age  The prospect has a total of 60 million boe, in unrisked recoverable resource potential (DNO estimate)  DNO holds 20% of the lice

  56. Slide 56: NCS: PL369 - Trow

    PROSPECT SHEET NCS: PL369 - TROW Trow Prospect  Summary  The Trow Prospect will be drilled with Bredford Dolphin in 2008.  The Trow prospect is a structural closure of Jurassic age, east of the Troll field.  The prospect has a total of 136 million boe, in unrisked recoverable resource potential

  57. Slide 57: NCS: PL380 - Fongen

    PROSPECT SHEET NCS: PL380 - FONGEN Fongen Prospect  Summary  The Fongen Prospect will be drilled with Bredford Dolphin late 2007 or early 2008  The Fongen prospect is a structural closure of Jurassic age  The prospect has a total of 44 million boe, in unrisked recoverable resource potential (DNO

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