Dno Asa Class A · OSL:DNO
Dno Asa Class A — Pareto Securities 13th Annual Oil & Offshore Conference 2006
32 slides from Dno Asa Class A's conference presentation, Sep 6, 2006
Slide 1: Presentation of DNO ASA
PRESENTATION OF DNO ASA Pareto Oil & Offshore Conference 6 September 2006 Helge Eide President and Managing Director Copyright 2006 DNO ASA Pareto Oil & Offshore Conference 6 September 2006
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
Slide 3: Our Mission
OU OURRM I SSI ON IIS MISSION ST OB TO EA BE A LLEADING EA DI N G EX PL ORA T I ON A EXPLORATION ND AND PRODU CT I ON COM PA N Y FOCU SED ON TRANSFORMING RESOU RCES T O RESERV ES A T L OW COST , GENERATING SU B ST A N T I A L A N D CON SI ST EN T V A L U E FOR OUR SHAREHOLDERS Copyright 2006 DNO ASA
Slide 4: DNO's Offer to Investors
DNO S OFFER TO INVESTORS Investment Highlights A pure-play E&P investment Diversified, risk balanced exploration portfolio with strong reserve growth potential Exploration activities funded by high margin production Strong position in Norway and in the Middle East Rig capacity for extensive explorat
Slide 5: New Growth Cycle
NEW GROWTH CYCLE Realizing and returning values WI P50 Reserves (MBOE) 2001 - 2006 Initial focus on small and mature 1st growth cycle New growth cycle fields in the North Sea 144 139 Approximately NOK 1.5 billion in 125,4 sales proceeds in 2004 (USD/NOK = 85,5 6.2) 64,3 72 3 3 15 34 29 Approximately
Slide 6: Share Price Development
SHARE PRICE DEVELOPMENT Share price First growth cycle New growth cycle 70 60 50 Revitalization in 1996 New strategy in 2003 40 Change in control Divestment of north sea assets 30 New strategy More focus on exploration New board and 20 management 10 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 199
Slide 7: Peer Group Valuation
PEER GROUP VALUATION Enterprise value per barrel (USD) Enterprise value per 25 barrels DNO is now 20 trading at a discount to the sector average 15 EV per barrels of $15/bbl 10 5 0 Premier Venture DNO Burren Soco Tullow UK Dana Lundin Cairn Source: Public information from reports from companies Sect
Slide 8: Year to Date Key Figures
NET ENTITLEMENT YEAR TO DATE KEY FIGURES Sales (USD million) EBITDA (USD million) Net Profit (USD million) +141%* +90%* -64%* 140 50 25 120 122 44 20 100 20 80 15 25 60 10 40 51 23 5 7 20 0 0 0 YTD 2005 YTD 2006 YTD 2005 YTD 2006 YTD 2005 YTD 2006 * Change from YTD 2005 Strong YTD financial results
Slide 9: Reserve Development
WORKING INTEREST RESERVE DEVELOPMENT WI Reserves P+P (MBOE) Strong organic reserve growth Last 18 m ont hs Discoveries at Goliat (NCS) and Tawke (N. Iraq) adds 70 million 160 barrels in P+P reserves (WI) to 140 DNO 120 Reserves have increased by 100 Tawke percent YTD 100 Reserves have increased by 4
Slide 10: Outstanding Reserve Economics
INVESTMENTS OUTSTANDING RESERVE ECONOMICS FDA (P+P) Recycle Ratio (P+P) Reserve Replacement (P+P) 2.0 USD/bbl 8.2 times 10.4 times 5 10 10 5 10,4 5 8,2 2,6 2,9 4,5 4,7 2,5 4,1 2,0 3,4 3,9 3,2 0 0 0 2003 2004 2005 YTD 2003 2004 2005 YTD 2003 2004 2005 YTD 2006 2006 2006 Low cost reserve High netback
Slide 11: Exploration Performance
EXPLORATION PERFORMANCE FDA Cost Exploration performance 16 DNO has consistently DNO FDA Cost Sector FDA Costs M&A Deal Costs delivered top quartile 14 exploration performance 12 DNO adds considerable 10 shareholder value through the drill bit 8 DNO's exploration 6 driven strategy is more cost effec
Slide 12: Copyright 2006 DNO ASA Pareto Oil & Offshore Conference 6 September 2006
Copyright 2006 DNO ASA Pareto Oil & Offshore Conference 6 September 2006
Slide 13: World Wide Portfolio
WORLD WIDE PORTFOLIO 35 LICENSES - 16 AS OPERATOR Northern Europe Norway 24 Licenses (8 as Operator) One producing asset Large exploration potential Minimized financial exposure from exploration Middle East UK 1 Licenses as Operator 8 Licenses (6 as Operator) 3 producing assets Large exploration pot
Slide 14: Operational Highlights
SECOND QUARTER AND FIRST SIX MONTHS OPERATIONAL HIGHLIGHTS YTD (6 months) production increased by 14 % Yemen (Nabrajah) production below plan Glitne production in line with plan Strong achievements in Northern Iraq oil discovery at first well Goliat gross P50 reserves increased from 50 to 250 millio
Slide 15: Middle East - Yemen and Northern Iraq: Exploration and Production Update
MIDDLE EAST - Y EM EN A N D N ORT H ERN I RA Q: EX PL ORA T I ON A N D PRODU CT I ON UPDATE Copyright 2006 DNO ASA Pareto Oil & Offshore Conference 6 September 2006
Slide 16: A Long Term Success Story
YEMEN A LONG TERM SUCCESS STORY Yemen DNO is involved in 6 licenses in Yemen (5 as Operator) Three producing assets; Tasour, Sharyoof and Nabrajah Copyright 2006 DNO ASA Pareto Oil & Offshore Conference 6 September 2006
Slide 17: Production Update
YEMEN PRODUCTION UPDATE 20 000 Tasour Sharyoof Nabrajah YTD (6 months) production from Yemen increased by 21 15 000 percent Nabrajah production below plan 10 000 Successful appraisal well at Production (WI) Tasour adds new production at beginning of September 5 000 Godah Field will add new productio
Slide 18: Status and Planned Activities
YEMEN BLOCK 32 STATUS AND PLANNED ACTIVITIES Tasour Field Tasour 22ST on line Tasour 22ST Godah Field adding 2,500 BOPD to DNO (WI, pre-tax) Next well to be drilled is a basement prospect Godah Field Oil production to commence Q406 with estimated initial gross production of 2000 4000 BOPD. Further d
Slide 19: Status and Planned Activities
YEMEN BLOCK 43 STATUS AND PLANNED ACTIVITIES Tests in recent wells failed to deliver sustainable flow Nabrajah 11 flowed max 650 BOPD Nabrajah 9, 10 & 11 after ESP installation Further stimulation and testing of Nabrajah 9, 10 and 11 to be considered at a later stage Planned activities Commissioning
Slide 20: Status and Planned Activities
YEMEN: BLOCK 53 STATUS AND PLANNED ACTIVITIES Prospective area close to Sharyoof Field Basement and overlaying carbonates: Currently testing Bayoot Prospect Last well (Bayoot SW # 2) drilled to a total depth of 3488 meter (MD) some 436 meters into basement. Good oil and gas shows combined with mud l
Slide 21: Continued High Drilling Activity
YEMEN CONTINUED HIGH DRILLING ACTIVITY Yemen drilling plan next 18 months - > 30 wells: Operated by DNO BL 32, 43, 44, 47, 72 12 Exploration wells 12 appraisal / development wells Operated by others BL 53 6 exploration wells plus development wells (plan yet to be finalised) Copyright 2006 DNO ASA Pa
Slide 22: Exploration Update
NORTHERN IRAQ EXPLORATION UPDATE Operations to date Acquisition of 440 km 2D seismic Tawke Drilled and tested Tawke # 1 Drilled Tawke # 1A, currently testing Aqcuired 3-D seismic accross Tawke Commenced drilling Kanke # 1 with second drilling rig in July Forward plan Complete Tawke # 1A testing Dril
Slide 23: Tawke #1
Tawke Early Production Plan TAWKE #1 Plan is based on test production of 5.000 BOPD achieved from both Tawke # 1 and repeated in Tawke # 1A (open hole) Investments in facilities and pipeline have been made production capacity yet to be defined Additional producers planned to be drilled before start-
Slide 24: Tawke #1
Short to medium Strategy TAWKE #1 Tawke Area Finalise open hole testing of additional intervals in Tawke # 1A (< 1000 meters) Testing of deeper level(s) in Tawke # 1 (> 2000 meters) Drilling Tawke # 2 appraisal well Evaluate 3D seismic and locate new wells Drilling Tawke # 3 exploration well Prepare
Slide 25: Northern Europe: Exploration and Production Update
NORTHERN EUROPE: EX PL ORA T I ON A N D PRODU CT I ON UPDATE Copyright 2006 DNO ASA Pareto Oil & Offshore Conference 6 September 2006
Slide 26: Strong Position
NORTHERN EUROPE STRONG POSITION Norway DNO is involved in 24 licenses in Norway and 1 in UK (9 as Operator) One producing asset; Glitne Copyright 2006 DNO ASA Pareto Oil & Offshore Conference 6 September 2006
Slide 27: Goliat Oil Discovery
GOLIAT OIL DISCOVERY Potential for increased reserves Recoverable P50 reserves substantially higher than initially anticipated 250 million barrels (P50) - 37,5 million barrels net to DNO First of two wells program to commence in September 2006 Western prospect has the potential of adding several hun
Slide 28: Zita Prospect
ZITA PROSPECT Exciting potential PL 263/263B Zita (30%) One exploration well planned to commence in October 2006 (Norsk Hydro is Operator) P50 unrisked prospect resource potential is approc. 200 million barrels 60 million barrels net to DNO Copyright 2006 DNO ASA Pareto Oil & Offshore Conference 6 S
Slide 29: High Potential Prospects
NORTHERN EUROPE HIGH POTENTIAL PROSPECTS 7+ wells to be drilled on NCS next 18 months: Operated by DNO Lie, Torkildsen, Draupne 3 exploration wells (commencing Q1 2007) Operated by others Goliat, Zita, Ragnarrock 4 exploration wells Plus additional drilling at Goliat in 2007 Copyright 2006 DNO ASA P
Slide 30: 18 Months Drilling Plan
18 MONTHS DRILLING PLAN Participate in > 40 wells NORWAY 7+ exploration wells N. IRAQ Continuous drilling with two rigs EQ. GUINEA 2 exploration / appraisal wells YEMEN Approximately 30 wells of which 15 is expected to be exploration wells Copyright 2006 DNO ASA Pareto Oil & Offshore Conference 6 Se
Slide 31: Netback to Investment Coverage
RESULT OF OPERATIONS NETBACK TO INVESTMENT COVERAGE Netback (RoO) to Total Investments (USD million) Increased investments in 50 Exploration & Development Netback producing activities 45 Exploration cost expensed YTD increase of 250 percent 40 Strong netback coverage 35 YTD netback coverage of 30 ex
Slide 32: Transforming Resources to Reserves at Low Costs
TRANSFORMING RESOURCES TO RESERVES AT LOW COSTS Substantial upside potential 2500 Short to medium term value drivers 2000 2000 Organic reserve growth trough the drill bit 1500 Maximise production from current assets 1000 Achieving first oil production from Northern Iraq in Q1 2007 500 140 0 P+P Rese
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