Slide 1: DNO ASA: Transforming resources to reserves at low costs
DNO ASA Transforming resources to reserves at low costs Helge Eide, Managing Director November 2005
Slide 2: Disclaimer
Disclaimer THIS PRESENTATION IS BEING FURNISHED TO YOU SOLELY FOR YOUR INFORMATION ON A CONFIDENTIAL BASIS AND MAY NOT BE REPRODUCED, REDISTRIBUTED OR PASSED ON, IN WHOLE OR IN PART, TO ANY OTHER PERSON. IN PARTICULAR, THIS PRESENTATION NOR ANY COPY THEREOF MAY BE TAKEN OR TRANSMITTED OR DISTRIBUTED
Slide 3: A pure-play E&P company
A pure-play E&P company Key facts about DNO Strong business Operational facts fundament... YTD 2005 Production 14.284 BOPD A pure-play E&P investment Reserves (P+P) 30.09.05 73,4 MBOE Diversified, risk balanced portfolio Financial facts High-margin production profile Sales (YTD 2005) USD 161 Mill. E
Slide 4: New Growth Cycle
New Growth Cycle P50 Reserves (MBOE) 1996 - 2005 Realing values in 2004 USD 240 million sales proceeds Returning values Cash and shares dividend of approximately USD 150 million since 2003 New growth opportunities Production (BOPD) 1996 - 2005 Balanced portfolio with substantial upside potential Hig
Slide 5: Review of Portfolio
Review of Portfolio
Slide 6: Asset portfolio
Asset portfolio 24 Licenses – 12 as Operator Northern Europe (15) Middle East (7) Norway Yemen PL 048B “Glitne Field” 10.00% Block 32 (Tasour) 38.95% (O) PL 305 40.00% (O) Block 43 (Nabraj ah) 56.67% (O) PL 305 B 40.00% (O) Block 44 65.10% (O) PL 229 15.00% Block 72 34.00% (O) PL 035/ 272 24.00% Blo
Slide 7: Yemen - a continued success
Yemen - a continued success Yemen Highlights Good production performance Third field on stream (Nabrajah) Successful drilling results Increased reserves 11/23/05 NFF Presentation November 2005 Slide 7
Slide 8: Yemen - The highly prospective Masila area
Yemen - The highly prospective Masila area Gross Production from Masila – ca. 280.000 BOPD Oil production from several levels (Qishn, Sarr, Basement) Gross production from DNO’s 3 assets – ca. 35.000 BOPD Oil production is is tied back to Block 14 facilities 11/23/05 NFF Presentation November 2005 S
Slide 9: Nabrajah #9 Basement Appraisal
Nabrajah - Nabrajah #9 Basement Appraisal Nabrajah #2 Nabrajah #8 Nabrajah #9 Nabrajah #5 11/23/05 NFF Presentation November 2005 Slide 9
Slide 10: Yemen Potential - Qishn and Basement
Yemen Potential - Qishn and Basement Qishn Prospects Basement Prospects Large potential High number of prospects at both Qishn and Basement levels Stepping up exploration drilling activity 10 - 12 new exploration wells expected by end 2006 11/23/05 NFF Presentation November 2005 Slide 10
Slide 11: Northern Iraq - Unique opportunity
Northern Iraq - Unique opportunity Update on Northern Iraq PSA covers approx. 4 000 sq. km. Minimum work program includes 250 km 2D seismic + 3 wells within 4 years from June 2004 Acquisition of 440 km 2D seismic completed in Q3 Drilling site prepared and rig at location Drilling will commence withi
Slide 12: North Sea - High potential prospect inventory
North Sea - High potential prospect inventory High upside potential 15 Licenses 6 as Operator One producing asset DNO approved as operator on NCS and UKCS Drilling activity Planning to drill 6 prospects with P50 unrisked resource potential of approx. 200 mill. bbl net to DNO 2 wells to be commenced
Slide 13: Norway - Goliath Oil Discovery
Norway - Goliath Oil Discovery P50 reserves as previously reported = 50 million barrels - 7,5 million barrels net to DNO 1 appraisal / exploration on Goliath South prospect currently in progress Goliath South P 50 gross estimate is 50 million barrels - 7,5 million barrels net to DNO Additional poten
Slide 14: Norway - Hummer Prospect (PL143CS)
Norway - Hummer Prospect (PL143CS) Swap with Talisman for a 35 % WI in return for a 10 % WI in PL 265 (Ragnarock) Operator is Paladin Resources 1 exploration well on the Hummer prospect planned to spud early December 2005 P50 unrisked resource potential given oil discovery is 33 million barrels, whi
Slide 15: UK - Jaguar Prospect
UK - Jaguar Prospect DNO 60 % and Operator 1 exploration well planned 1Q 2006 Unrisked resource potential given oil discovery is estimated by DNO in the range of 54 - 280 million barrels full field, with a most likely estimate of 138 million barrels - which is 83 million barrels net to DNO Possible
Slide 16: Norway - Additional drilling planned
Norway - Additional drilling planned Ragnarock (30%) 1 exploration well planned early 2007 (Statoil is Operator) P50 unrisked resource potential is 138 million barrels - 41 million barrels DNO net Thorkildsen (40% - Operator) 1 exploration well planned, timing subject to rig availbility, P50 unriske
Slide 17: YTD Performance
2005 YTD Performance
Slide 18: Year to date comparison - Key figures
Year to date comparison - Key figures Production (Bbl/day) Sales (USD Million) EBIT (USD Million) Net Profit (USD Million) +5% + 32 % + 74 % + 291 % Strong improvements in key figures Losses from oil price hedging USD 29 mill. YTD Exploration investments USD 17 mill. YTD 11/23/05 NFF Presentation No
Slide 19: Production and lifting costs
Production and lifting costs - Maintained 14 000 BOPD production level Production (BOPD) Lifting Cost (USD/Bbl) 11/23/05 NFF Presentation November 2005 Slide 19
Slide 20: Building on New Growth Strategy
Building on New Growth Strategy - Further improvements in Q3 2005 Quarterly figures (USD million) Highlights Record revenue and operating profit Strong result of operations from producing assets 11/23/05 NFF Presentation November 2005 Slide 20
Slide 21: Netback to Investment Coverage
Netback to Investment Coverage - High share of FD&A costs funded by producing assets Netback (RoO) to Total Investments (USD Million) Acquisition and development includes Development Nabrajah field Development drilling on the Tasour and Sharyoof fields Acquisition of licenses in Norway and UK Re-inv
Slide 22: Capital Structure
Capital Structure - Building on a strong balance sheet Balance Sheet 31.12.2004 and 30.09.2005 Solid financial structure 46 % of balance sheet in cash Net funds (cash balances less interest-bearing debt) USD 2,9 mill. Capacity for further debt 11/23/05 NFF Presentation November 2005 Slide 22
Slide 23: Top Quartile Performance
Reserve Economics Top Quartile Performance FDA USD/bbl (P+P) Recycle Ratio USD/bbl (P+P) Reserve Replacement Ratio (P+P) Low cost reserve growth Generating strong cash flow Building higher reserve base for re-investment 11/23/05 NFF Presentation November 2005 Slide 23
Slide 24: Reserve development
Reserve development Reserves, proven and probable (mboe) Unrisked resources (mboe) + 150 % Increased reserves Substantial upside potential FD&A < 2 USD per barrel 1.370 – 1.970 mill. barrels 11/23/05 NFF Presentation November 2005 Slide 24
Slide 25: Outlook - Transforming resources to reserves
Outlook - Transforming resources to reserves Production 2005 – 2011 (BOPD) Potential reserves vs. max. unrisked resources 200 000 2 500 Million barrels 180 000 High growth potential Medium growth potential 100 % 160 000 2 000 Producing assets 140 000 120 000 1 500 100 000 80 000 1 000 1 970 60 000 2
Slide 26: Summary & Outlook
Summary & Outlook Summary Strong operational and financial results in 2005 Increased reserves at low costs Delivering values to shareholders Outlook Increased drilling activity Focus on transforming resources into reserves - at low costs Further financial improvements in 2006 Increased production Fu