Dno Asa Class A · OSL:DNO
Dno Asa Class A — DNO International — Q2 2011 Earnings Presentation
31 slides from Dno Asa Class A's earnings presentation, Aug 17, 2011
Slide 1: Q2 2011 Presentation
17 August 2011 Q2 2011 Presentation
Slide 2: Agenda
Agenda 1. Welcome Tom Bratlie, Communication Director 2. Highlights and Operational Update Helge Eide, Managing Director 3. Financials Haakon Sandborg, CFO 4. Q&A
Slide 3: Highlights and Operational Update
Highlights and Operational Update Helge Eide, Managing Director
Slide 4: Strong operational and financial results
YTD 2011 Strong operational and financial results • Significant increase in production • Doubling of Tawke reserves • Confirmed commercial discoveries in Erbil PSC • Financial position further strengthened • Merger proposal for RAK Petroleum MENA assets
Slide 5: Development in production volumes per quarter 2010-2011
Development in production volumes per quarter 2010-2011 60,000 48,582 50,000 39,945 40,000 30,000 24,956 20,000 WI Bopd 15,748 16,252 12,442 10,000 0 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q2 2011 Presentation 5
Slide 6: Production YTD 2011 compared with same period 2010
Production YTD 2011 compared with same period 2010 (WI) YTD 2010 YTD 2011 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 Bopd 5,000 0 Kurdistan Yemen Q2 2011 Presentation 6
Slide 7: Financial results YTD 2011 compared with same period 2010
Financial results YTD 2011 compared with same period 2010 YTD 2010 YTD 2011 1,400 1,245 1,200 1,013 1,000 822 800 665 600 543 400 279 NOK million 200 151 -106 0 Revenue Netback Net profit Cash position -200 Q2 2011 Presentation 7
Slide 8: P50 Reserves at end June 2011 compared with same period 2010
P50 Reserves at end June 2011 compared with same period 2010 (WI) Yemen Kurdistan 450 400 350 300 250 380 200 150 100 Mboe 138.2 50 0 8.6 9.8 Per 30.6.2010 Per 30.6.2011 Reserves per 30.6.2011 estimated based on interim reserves update. Q2 2011 Presentation 8
Slide 9: Operations
| Operations
Slide 10: Yemen operations
Yemen operations • Production YTD in line with plan • No security issues experienced and current operations not affected by the current unrest • Some delays in progressing the Yaalen/Sharnah development, but first oil still expected mid 2012 at 5,000 bopd (gross) • Three infill/development wells cur
Slide 11: Kurdistan Production
Kurdistan Production • Present gross capacity at Tawke facilities proved above 70,000 bopd • Included third party crude oil, more than 100,000 bopd (peak) delivered through the DNO export facilities • Further investments are subject to clarification on payments 80,000 70,000 60,000 71,350 66,333 50,
Slide 12: Kurdistan Exploration and Development
Kurdistan Exploration and Development Tawke PSC • Tawke-13 has now reached total depth and the well will be completed in Q3 • The Peshkabir-1 exploration well will be drilled in Q3 with the rig used for Tawke-13 Dohuk PSC • Testing top Cretaceous in Summail-1 confirmed gas and the well flowed 4 mill
Slide 13: Tawke Reserves Update
Tawke Reserves Update Fractured carbonate system with oil volumes in the fractures and matrix Bulk Rock Volume In place volumes Matrix Recoverable reserves Fractures
Slide 14: Most significant input to the intermediate Tawke reserves update
Most significant input to the intermediate Tawke reserves update • Four years of production history • Significant increase in production volumes last 4 months • Updated geological- and reservoir models based on extensive technical work concluded end 2010 and further refined in 2011 • Recent producti
Slide 15: New fracture model
Examples of vugs New fracture model 2011 model is based on seismic attributes, well test data, production data, wire line logs(FMI), core data, and Large amounts of other data sources connected vugs observed on core, Multiple seismic attributes have been and wire line logs(FMI) compared with certain
Slide 16: Gross reserves and resources in Kurdistan
Gross reserves and resources in Kurdistan Million barrels Oil in place RF (%) Recoverable volumes Tawke 1,748 36.4 636 (June intermediate update) Benenan 390 9 36 (Contingent resources) Bastora 560 18 100 (Contingent resources) Prospects 3,050 9-36 1) 275-1,100 1) (Undrilled and unrisked) 1) Based o
Slide 17: Proposed merger of RAK Petroleum's MENA Operating Subsidiaries into DNO
Proposed merger of RAK Petroleum´s MENA Operating Subsidiaries into DNO and application for London listing
Slide 18: The combined DNO-RAK MENA
The combined DNO-RAK MENA: Norway • Corporate head office in Oslo The Kurdistan Region of Iraq • 12% share of Det Norske • Local administration in Erbil Oljeselskap ASA • Operator of three licenses: Tawke (55%), Dohuk (40%), Erbil (40%) UK • UK Office DNO UK Ltd, in London United Arab Emirates • 50%
Slide 19: Proposed merger: Update on progress
Proposed merger: Update on progress • Arctic Securities engaged as financial advisor to DNO • Present focus on due diligence and valuation • Definitive agreements, if reached, will be presented to the shareholders at an extraordinary general meeting (EGM) for final approval • Present timeline indica
Slide 20: Financials
Financials Haakon Sandborg, CFO
Slide 21: Financial summary Q2 2011
Financial summary Q2 2011 Accounting for Export Revenues Quarterly key financials • Export sales from Tawke of USD 104 million included in Q2 revenues NOK million Q2 2010 Q1 2011 Q2 2011 800 Strong Cash Flow 700 • Cash flow from operations of NOK 293 million 600 500 Solid Financial Position 400 • Ca
Slide 22: Key financial indicators
Key financial indicators EBITDAX* margin EBITDAX* Netback* NOK million NOK million 90 % 700 700 85 % 600 600 80 % 83 % 75 % 500 500 70 % 400 400 70 % 65 % 64 % 300 300 60 % 55 % 200 200 50 % 100 100 45 % 40 % 0 0 Q2 2010 Q1 2011 Q2 2011 Q2 2010 Q1 2011 Q2 2011 Q2 2010 Q1 2011 Q2 2011 *EBITDAX in % o
Slide 23: Condensed income statement
Condensed income statement NOK million Q2 2011 Q1 2011 Q2 2010 YTD 2011 YTD 2010 Sales 732.0 281.2 284.7 1013.3 543.2 Cost of goods sold 300.7 140.2 155.6 440.9 288.9 Gross profit 431.3 141.0 129.0 572.4 254.4 Dry well cost expensed -24.1 -28.6 -11.0 -52.8 -11.0 Seismic and other exploration expense
Slide 24: YTD Net Finance
YTD Net Finance NOK million 20 Non-Cash Items: 10 • Calculated interest on water purification project NOK 104 million 0 • Unrealized FX losses NOK 39 million -10 Financial Income -20 Interest expense -30 WPP FX -40 -50 -60 -70 Q1 2011 Q2 2011 Q2 2011 Presentation 24
Slide 25: Lifting Costs
Lifting Costs Pro forma (incl export from Tawke) USD/bbl Total lifting costs Yemen Tawke 25 22.66 20 19.45 17.03 15 15.48 15.10 10 9.57 8.36 5 5.31 4.06 4.39 4.08 3.98 1.87 1.59 1.78 0 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q2 2011 Presentation 25
Slide 26: Cash flow
Cash flow NOK million Q2 2011 NOK million YTD 2011 350 300 250 300 200 250 150 100 200 50 150 0 100 -50 -100 50 -150 0 -200 From Taxes Paid Investing Financing Net Increase From Taxes Paid Investing Financing Net Increase Operations, in Cash Operations, in Cash Pre-Tax Pre-Tax Q2 2011 Presentation 2
Slide 27: Investments
Investments 2011 Guiding NOK million Planned investments 160 • Development CAPEX NOK 200 million • Exploration NOK 250 million 140 Contingent additional investments • Development CAPEX NOK 400 million 120 • Exploration NOK 20 million 100 YTD 2011 Expensed Actual investments 80 Exploration • Developm
Slide 28: Capital structure
Capital structure Assets Equity and liabilities NOK million NOK million Non-current assets Other current assets Cash and cash equivalents Shareholders equity Non-current liabilities Current liabilities 5000 5000 Cash: 4000 NOK 1,245 million 4000 Net debt to 3000 3000 capitalization* 8 per cent 2000
Slide 29: Outlook 2H 2011
Outlook 2H 2011 Production • Temporary reduction in Tawke production to 50,000 bopd for reservoir monitoring activities • Some decline in Yemen production until Yaalen start-up mid 2012 Appraisal and development • Prepare Erbil PSC development plans • Drilling and completion of T-13 in Tawke • Drill
Slide 30: Welcome back November 2011
Welcome back 9 November 2011
Slide 31: 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