Dno Asa Class A · OSL:DNO
Dno Asa Class A — DNO International — Investor Presentation (June 2010)
42 slides from Dno Asa Class A's investor presentation, Jun 30, 2010
Slide 1: DNO International ASA
DNO International ASA General presentation for Norne Securities, Bergen 30 June 2010 Helge Eide Managing Director and President
Slide 2: Proven business model
Proven business model Value creation Going forward • Organic reserve growth at low cost • Increase production from strong reserve base • Cash flow return from high margin production • Add reserves through high potential exploration • Increase in market cap • Build new core business areas Reserves &
Slide 3: Worldwide Operations
Worldwide Operations Det norske oljeselskap ASA Yemen: Oslo • PSA interest in 6 blocks DNO licences Producing Kurdistan region of Iraq: PL1067 Development • PSC interest in 3 blocks United Kingdom: • 50% interest in exploration license P1067 Tawke Mozambique: • 100% interest in the onshore Inhaminga
Slide 4: Organizational setup
Organizational setup Technical resource pool Corporate headquarter President & Managing Director 45 employees Helge Eide Chief Petroleum Engineer Located to Oslo Ole Nygaard Total workforce: 513 Chief Geologist (corporate and operations) Ståle Monstad Chief Geophysicist Corporate finance Jürgen Hoff
Slide 5: Development in P50 Reserves and Resources
4 year development in P50 Reserves and Resources, Class 1-7 MMBOE Presentation for Norne Securities, 30 June 2010 5
Slide 6: Distribution of Reserves and Resources
Distribution of Reserves and Resources DNO’s WI Reserves & Resources as of Year End 2009 Kurdistan: 139.5 Tawke Euphrates: 1.1 Sharnah (BL47): 3.3 Mulle (UK): 10.0 Yemen: 9.9 Eq. Guinea: 1.5 Hekma (BL53): 1.2 Benenan (Erbil): 4.7 Yaleen (BL47): 1.6 Presentation for Norne Securities, 30 June 2010 6
Slide 7: Highly ranked in the MEA region
Highly ranked in the MEA region* 3-year F&D cost (2006-2008) 3-year reserve replacement (2006-2008) Source: JS Herold Inc. Note: * MEA: Middle East and Africa Presentation for Norne Securities, 30 June 2010 7
Slide 8: Quarterly production in 2009 and 2010
Quarterly production in 2009 and 2010 DNO’s working interest production incl. Tawke export 45 000 31165 40 000 35 000 30 000 25 000 Tawke export Tawke local 20 000 Yemen 5498 15 000 5 871 5 926 5 005 10 000 2 861 3 438 7 925 7 878 7 542 7 655 5 000 7 437 bopd 0 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 10 786 1
Slide 9: Quarterly production in 2009 and 2010
Quarterly production in 2009 and 2010 DNO’s working interest production ex. Tawke export 14 000 5 871 5 926 12 000 5 005 3 438 2 861 10 000 8 000 Tawke 7 925 7 878 7 542 7 655 7 437 Yemen 6 000 4 000 2 000 bopd 0 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 10 786 11 316 13 413 13 581 12 442 Presentation for Norne
Slide 10: Monthly production in 2010
Monthly production in 2010 DNO’s working interest production Q1 10 (12 442) 14 000 5 429 12 000 5 091 5 420 4 440 4 404 10 000 8 000 Tawke 7 719 7 371 7 213 7 058 Yemen 7 027 6 000 4 000 2 000 bopd 0 Jan Feb Mar Apr May 13 148 11 811 12 304 12 478 11 431 Presentation for Norne Securities, 30 June 20
Slide 11: Solid development through 2009 in health and safety performance
Solid development through 2009 in health and safety performance 4,5 4 3,88 3,91 3,78 3,5 3,46 3,2 2,92 3,09 3,04 3 2,85 3 2,76 2,73 2,81 2,67 2,5 2,45 2,39 2,37 Lost Time Incident Frequency 2,2 2 Total Recordable Incident 1,7 Frequency 1,72 1,63 1,59 1,5 1,38 1,56 Vehicle Incident Frequency 1,42 1,4
Slide 12: KURDISTAN
KURDISTAN Presentation for Norne Securities, 30 June 2010 12
Slide 13: Increased focus in Kurdistan from international E&P companies
Increased focus in Kurdistan from international E&P companies DNO entry in 2004 Tawke PSC • In the forefront of events DNO • Instrumental in developing the local Dohuk PSC oil industry Industrial achievement by DNO Erbil PSC • Developed flexible full scale E&P operations • Export initiated on 1 June
Slide 14: Kurdistan Contracts
Kurdistan Contracts Tawke PSC • DNO (55%), Genel Enerji (25%), KRG (20%) • DNO paying interest: 75% • Royalty: 10% • Net entitlement: R-factor Dohuk PSC • DNO (40%), Genel Enerji (40%), KRG (20%) • DNO paying interest: 60% • Royalty: 10% • Net entitlement: R-factor Erbil PSC • DNO (40%), Gasplus Erb
Slide 15: Tawke Main Milestones
Tawke Main Milestones Tie in completed and export of crude oil initiated Long term test production CPF transported and installed at the Tawke field The Tawke Oil Discovery Acquisition of seismic data Initial agreement with KRG 2004 2005 2006 2007 2008 2009 Presentation for Norne Securities, 30 June
Slide 16: 5 years from entry to full scale production
5 years from entry to full scale production Agreement Seismic Drilling, Tawke # 1 Tawke test production Tawke export 2004 24 months from entry to first discovery 2006 2006 36 months from first discovery to full scale production 2009 Presentation for Norne Securities, 30 June 2010 16
Slide 17: Tawke Production
Tawke Production Monthly production since start-up 60 000 50 000 bopd 40 000 30 000 Export 20 000 Local sales 10 000 0 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Presentation for Norne Securities, 30 June 2010 17
Slide 18: Tawke export set-up
Tawke export set-up 12” Oil pipeline 40” and 46” Export pipeline State Oil Marketing Organization (SOMO) • Sales at outlet in Turkey Refinery CPF DNO Iraq AS • Tawke field • Tawke pipeline Turkey’s Petroleum Pipeline Corporation (BOTAS) • Pipeline system in Turkey Tawke pipeline Tawke field 230 mill
Slide 19: Local sales
Local sales Presentation for Norne Securities, 30 June 2010 19
Slide 20: Water Purification Project – Kurdistan Region of Iraq
Water Purification Project – Kurdistan Region of Iraq DNO financial commitment of USD 150 mill Presentation for Norne Securities, 30 June 2010 20
Slide 21: Kurdistan Operational Status
Kurdistan Operational Status Tawke • Commenced export of crude oil from Tawke on 1 June which continued until 22 September 2009 • Current focus is on local sales • Ready for export when payment mechanism is in place Benenan discovery • Testing completed • Evaluation of results ongoing Exploration •
Slide 22: YEMEN
YEMEN Presentation for Norne Securities, 30 June 2010 22
Slide 23: Yemen Operational Overview
Yemen Operational Overview Block 52 Block 32 Ansas-1 to be drilled in Next Godah infill wells Q2 2010 planned for Q3 2010 Block 43 Drilling Nabrajah-10S Block 53 (pilot+horizontal) completed Continue Bayoot Results under development evaluation drilling in 2010 Block 72 3D seismic mapping of fracture
Slide 24: Sharnah/Yaalen oil discovery (Block 47)
Sharnah/Yaalen oil discovery (Block 47) Fast-track field development • Resource potential prior to Yaalen-1: 10 million barrels • Resource potential to be re-evaluated after Yaalen-3 final results • Drilling Sharnah-2 in Q2/Q3 • Filing development plan in 2010 • Staged Development • Likely tie-back
Slide 25: Bayoot basement field (Block 53)
Bayoot basement field (Block 53) Production profile Bayoot (gross) Presentation for Norne Securities, 30 June 2010 25
Slide 26: Yemen (BL72): Basement lead
Yemen (BL72): Basement lead • Basement fault blocks with possibilities for oil trapped in fractured basement • These basement structures are located in a ‘look alike’ position to the producing Bayoot and Kharir fractured basement fields • The partnership has decided to dedicate the next exploration
Slide 27: MOZAMBIQUE
MOZAMBIQUE Presentation for Norne Securities, 30 June 2010 27
Slide 28: Mozambique Summary
Mozambique Summary • Entered 4th exploration period for Inhaminga Block (onshore) • Acquisition of 2D seismic completed 2009 • Farm-down expected to be concluded shortly • Next exploration well planned in Q4 2010 Presentation for Norne Securities, 30 June 2010 28
Slide 29: The Inhaminga Block - Mozambique
The Inhaminga Block - Mozambique • Block size : 10,715 sqkms • Work Commitment • 600 km 2D seismic (completed) • 1 Exploration well • Several drilling targets identified Presentation for Norne Securities, 30 June 2010 29
Slide 30: New ventures
New ventures From current core areas • Develop current positions in proven basins, both known and new plays • Follow potential extensions of proven plays into adjacent basins Potential outside Kurdistan and Yemen • Pursue entries into frontier basins in the Middle-East – East/North Africa regions –
Slide 31: FINANCIALS
FINANCIALS Presentation for Norne Securities, 30 June 2010 31
Slide 32: Quarterly key financials (from the Q1 2010 presentation)
Quarterly key financials (from the Q1 2010 presentation) Increased revenues and cash flow • Higher achieved oil prices Revenues EBITDAX EBITDA • Lower administrative expenses Strengthened financial position • Full cash flow coverage of investments • Cash position increased through sale of treasury s
Slide 33: Improved margins
Improved margins EBITDAX margin EBITDAX Netback Presentation for Norne Securities, 30 June 2010 33
Slide 34: Performance metrics comparison
Performance metrics comparison F&D cost Lifting cost Source: JS Herold Inc. and Company data Öhman Raw Materials Day 2010 34
Slide 35: Cash flow coverage of investments
Cash flow coverage of investments Netback coverage Cash flow funding • DNO seeks to fund a major part if its investments from cash flow • The cash flow coverage ratio increased to 1.8x i Q1 2010 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Capex Q3 2009 shown net of WPP liability of NOK 537 million Prese
Slide 36: Capital structure
Capital structure Assets Equity and liabilities Cash: NOK 671 million Net debt to capitalization*: 31 per cent Financial assets: NOK 437 million Equity ratio: 40 per cent *Net interest bearing debt/capitalization Presentation for Norne Securities, 30 June 2010 36
Slide 37: CAPEX adjusted in line with market condition changes
CAPEX adjusted in line with market condition changes Total investment per activity Plan for 2010 Planned investments • Development CAPEX NOK 130 million 1800 • Exploration NOK 230 million 1600 Contingent additional investments 1400 • Development CAPEX NOK 25 million • Exploration NOK 110 million 120
Slide 38: Shareholders
Shareholders Ownership Larsen Oil&Gas 3.3 % 38,5 % 61,5 % RAK Petroleum Retail investors 20.0 % 30.0 % Norwegian non-Norwegian Shareholders 15.0 % 445 Other Norwegian 5.4 % Oppenheimer 14 561 26.4 % Norwegian non-Norwegian Other non-Norwegian As per 29 June 2010 Presentation for Norne Securities, 30
Slide 39: Shareholders by country
Shareholders by country Other 8,6 % Denmark 2,5 % Sweden 3,8 % UK 7,1 % Norway 38,5 % USA 9,5 % United Arab Emirates 30,0 % As per 21 June 2010 Presentation for Norne Securities, 30 June 2010 39
Slide 40: 20 largest shareholders, holding 56 % of the shares
20 largest shareholders, holding 56 % of the shares Holding Percentage Name Account type Citizenship 271,457,075 30.00 RAK PETROLEUM PUBLIC UNITED INSURANCE BUI UAE 49,337,244 5.45 JPMORGAN CHASE BANK A/C OPPENH.NON TREAT NOM USA 29,763,220 3.29 LARSEN OIL & GAS AS NOR 21,231,654 2.35 JPMORGAN CHASE
Slide 41: Outlook
Outlook Continued value creation • Increase production from our strong reserve base • Accelerate development programs in Yemen • Seek additional reserves and resources through selective exploration • Carry out planned 2010 investments, consider additional projects depending on drilling results and a
Slide 42: DNO International ASA
DNO International ASA General presentation for Norne Securities, Bergen 30 June 2010 Helge Eide Managing Director and President
DNO International — Investor Presentation (June 2010) on 6ix