DNO ASA — Earnings Release 2014

Aug 21, 2014

Interim Report 2014 Second quarter

Q2 2014 and year-to-date highlights

• Second Still firmly on the accelerator in Q2
• Record gross production of 138,569 barrels of oil equivalent per day (boepd), up 76 percent from Q1
• Record company working interest (CWI) production of 81,669 boepd, up 78 percent from Q1
• In Kurdistan, record Q2 CWI production of 71,215 barrels of oil per day (bopd), of which 47,105 bopd sold to local buyers and 24,110 bopd delivered at Fish Khabor for onward pipeline transport to Ceyhan, Turkey
• → Q2 operating revenue of USD 143 million (H1 total of USD 256 million) and operating cash flow of USD 58 million (H1 total of USD 147 million)
• → Notwithstanding quarterly investments of USD 97 million (H1 total of USD 183 million) maintained strong financial position with free cash balance of USD 195 million at end Q2
• $\bullet$ In addition to cash, held USD 104 million in financial assets, including a 4.7 percent stake in RAK Petroleum PCL, with balance in DNO treasury shares

	Quarter		Year-to-date		Full year
USD million	Q2 2014	Q2 2013	2014	2013	2013	2012
Key financials
Sales 1	143.4	130.9	256.2	234.2	503.0	524.5
Gross profit	64.5	74.0	106.2	127.3	294.7	316.1
Profit/-loss from operating activities	54.6	62.9	84.2	110.0	67.9	270.0
Net profit/-loss	44.4	48.0	68.1	78.1	27.0	198.1
EBITDA	110.4	87.9	180.1	159.5	348.1	360.8
Netback	100.9	73.8	160.4	128.7	285.9	297.0
Acquisition and development costs	97.4	79.9	182.7	145.1	288.3	197.2
Exploration costs expensed	4.0	2.4	9.3	4.3	10.3	13.4
Key performance indicators 2)
Lifting costs (USD/boe)	3.16	9.35	4.75	9.69	7.96	7.48
Netback (USD/boe)	13.79	21.71	14.17	21.90	20.76	23.84

Key figures

¹⁾ Sales in 2012 include USD 116 million related to export volumes from the Tawke field.

²⁾ Key performance indicators include export volumes from the Tawke field.

Operational review

Production

Quarterly production per country (CWI)

Company working interest (CWI) production during the second quarter averaged 81,669 barrels of oil equivalent per day (boepd). The increase in volumes compared to the previous quarter (45,744 boepd CWI) is primarily due to the production of 24,110 barrels of oil per day (bopd) CWI from the Tawke field delivered to Ceyhan, Turkey and higher local deliveries. Sales production during the second quarter, excluding those volumes delivered to Ceyhan, averaged 57,559 boepd on a CWI basis.

In the second quarter, the company set three new single day records at Tawke: daily production of 133,192 barrels, daily export deliveries of 126,048 barrels and daily local sales of 114,760 barrels. The company also set a new monthly production record of 120,021 bopd for the Tawke field.

In Oman, CWI production from Block 8 was 7,691 boepd during the second quarter compared to 7,597 boepd in the previous quarter and 10,064 boepd during the corresponding period in 2013. Production at the company's assets in Yemen was 2,764 bopd CWI during the second quarter.

Net entitlement production during the second quarter was 33,938 boepd compared to 22,063 boepd in the previous quarter and 22,332 boepd during the corresponding period in 2013.

Activity overview

The company continued with high levels of drilling across its portfolio in the second quarter. Two wells (Tawke-24 and Tawke-26) were completed and two wells (Tawke-25 and Summail-2) were drilling at the end of the quarter.

Gross production

		ŏŏ1.0!. !.ġ0+ġ 0! ŏŏŏŏŏŏŏŏ1(( 5!.
boepd	Q2 2014 Q2 2013		2014	2013	2013	2012
1. %/0*	āāćČāāĂ	ăĊČćĉā	ĉćČĊćā	ĂĊČĀĀĊ	ăĊČąăă	ąĆČąĈĈ
)*	āĆČăĉĂ	ĂĀČāĂć	āĆČĂĉĊ	ĂăČąāĊ	ĂāČąĈă	āāČąĊĀ
Yemen	ĈČĀĈĆ	ĊČĉĊĉ	ćČćĆĉ	āĀČĂĉă	ĊČĈĀĉ	āĀČĂĈā
Total	138,569		69,705 108,908	62,711	70,614	67,238

\$! 0(! +2! .!ý!0/ #.+// ,.+ 10%+* ".+) 0\$! ü!( /ċ 1. %/0* ü#1.!/ %*(1 ! +0\$ (+( /(!/ * !4,+.0! 2+(1)!/ċ

Company working interest (CWI) production

	ŏŏ1.0!.		!.ġ0+ġ 0!		ŏŏŏŏŏŏŏŏ1(( 5!.
boepd	Q2 2014 Q2 2013		2014	2013	2013	2012
1. %/0*	ĈāČĂāĆ	ĂąČćĉĂ	ĆăČĆĂĈ	āĉČĀąą	ĂąČĆĂĈ	ĂĉČąćć
)*	ĈČćĊā	āĀČĀćą	ĈČćąą	āāČĈāĀ	āĀČĈăć	ĆČĈąĆ
Yemen	ĂČĈćą	ăČĊĈĆ	ĂČćăĆ	ąČāćą	ăČĊĀĈ	ąČāąă
Total	81,669	38,720	63,806	33,917	39,170	38,354

\$! 0(! +2! .!ý!0/ Ě/ 0+0( 3+.'%*# %*0!.!/0 ,.+ 10%+* %*(1 %*# %!/!(ċ 1. %/0* ü#1.!/ %*(1 ! +0\$ (+( /(!/ * !4,+.0! 2+(1)!/ċ

Net entitlement production

	ŏŏ1.0!.		!.ġ0+ġ 0!		ŏŏŏŏŏŏŏŏ1(( 5!.
boepd	Q2 2014 Q2 2013		2014	2013	2013	2012
1. %/0*	ĂĉČāĉĂ	āąČąĂĊ	ĂăČāĆĈ	āĀČĉĆā	āĂČćĈĊ	āąČĆćă
)*	ăČĊăĆ	ĆČĂĉĆ	ąČāĊą	ćČąăĈ	ĆČĈăă	ăČćĂĉ
Yemen	āČĉĂĂ	ĂČćāĈ	āČĉāĀ	ĂČćĀĊ	ĂČĆąă	ĂČąąĂ
Total	33,938	22,332	29,161		19,897 20,956	20,633

\$! 0(! +2! .!ý!0/ Ě/ *!0 !*0%0(!)!*0 ,.+ 10%+* %*(1 %*# %!/!(ċ !0 !*0%0(!)!*0 ".+) ,/0 !4,+.0/ ".+) 3'! \$/ !!* !/0%)0! /! +* 0\$! Č 10 0\$! +),*5 \$/ *+0 .!!%2! ,5)!*0/ "+. 0\$! "1(( *!0 !*0%0(!)!*0 ,.+ 10%+*ċ

Appraisal and feld development

KURDISTAN REGION OF IRAQ

Tawke license

Two horizontal production wells were completed in the second quarter as part of the company's ongoing development program. Tawke-24 and Tawke-26 were both drilled in the easternmost part of the field and the wells included a material appraisal component. Tawke-26 was completed across multiple fracture zones in the main Cretaceous reservoir. The well is currently producing at 2,400 bopd from one zone. Tawke-24 was drilled to delineate the farthest eastern compartment of the Tawke field. The reservoir was encountered deeper than anticipated and tested water in the Cretaceous reservoir. The well will be considered for future water disposal when required.

Drilling of an additional horizontal production well (Tawke-25) started in the second quarter. The well has been drilled through the Cretaceous reservoir and preparations for testing are ongoing. A further two horizontal wells will start drilling in 2014, bringing the total number of horizontal wells that are completed or in the process of being drilled to nine by year-end.

The company has also started a program to install electrical submersible pumps (ESPs) across the main production wells. This is done in order to maintain and better control the production rates at Tawke.

Work is continuing to raise the capacity of the Tawke production facilities to 200,000 bopd. To transport the increased field output, a new 24-inch pipeline will be installed along the same route as the existing 12-inch pipeline that runs from the central processing facility at the field to the Fish Khabor export facility.

Following the submission of a field development plan (FDP) for the Peshkabir oil discovery during the fourth quarter of 2013, the company plans to drill the high impact Peshkabir-2 well in 2014 to further explore the Peshkabir structure and test upside potential.

Dohuk license

At the Summail gas field, sales to the Dohuk power plant commenced in late May, initially averaging 60 million cubic feet per day (mmcfd) from the first well. The gas will help displace diesel currently used to generate electricity in the 750 MW power plant in the city of Dohuk located 40 kilometers from the field. The price of gas will range between USD 3 and USD 4 per thousand cubic feet over the life of the contract. The Gas Sales and Purchase Agreement is the first such agreement to be signed with a state buyer in Kurdistan. Gas is transported by a new 36-inch pipeline to what is intended to become the regional gas gathering and distribution network. Following the fast-track development of the Summail field, the company will shift its focus to appraising the oil potential of the Dohuk license.

Drilling of the second well Summail-3 was completed in May and the well was put into production in June. Production from the Summail-1 and Summail-3 wells averaged 83 mmcfd in June 2014. Drilling of the Summail-2 well commenced in early April and this well will be tested in the third quarter.

Erbil license

The temporary production facilities at Benenan-3 well have been installed and the first sales of oil have been made as part of the company's early production program. Testing of the Jurassic Najmeh formation in the Benenan-3 well was completed in June proving production rates of up to 1,500 bopd. The Benenan-3 well was drilled in 2012 to appraise the Najmeh formation. The well also encountered moveable oil in the Cretaceous Bekhme formation and proved an additional 210-meter oil column in the Lower Najmeh reservoir.

The Benenan-4 well was drilled in late 2013. The well has been suspended, awaiting the Benenan-3 test results. Testing of Benenan-4 is ongoing and will be incorporated into the early production program from the Benenan field.

Benenan-4 is located on the western Benenan anticline and has tested movable Najmeh oil deeper than in any of the other Benenan wells. The well has confirmed the material in–place volume estimates of the Benenan field and is very encouraging for further development of the field.

OMAN

The West Bukha-5 well has been returned to service following an extensive workover, and tested 2,600 barrels of oil and liquids per day and 10 mmcfd of gas, increasing Block 8 deliveries.

Reprocessing of West Bukha 3D seismic data and a review of the reservoir model are underway to evaluate possible new drilling targets and additional exploration opportunities in Block 8.

RAS AL KHAIMAH

The Saleh-8 well is producing into existing infrastructure to enable production and pressure monitoring. Artificial lift studies have continued on the partially depleted upper Wasia reservoir.

YEMEN

At Block 47, the company expects to commence production at the Yaalen field from one well in the second quarter of 2015, subject to unrestricted access to the Yaalen site. Following production startup, the company will gather well performance, reservoir and fluid properties data to assist in subsequent development activities.

Exploration

KURDISTAN REGION OF IRAQ

Tawke license

A new 3D seismic survey is planned for the Tawke field. The purpose is to get better coverage of the north flank, including the Tertiary Jeribe and Euphrates reservoirs, and to improve data quality of the Tawke deep prospect levels.

Another Jurassic well at Tawke is planned for towards the end of 2014. On the Peshkabir structure, a new well is planned for the second half of 2014. The main goal is to appraise the Jurassic discovery made in Peshkabir-1 and also to prove additional oil in Cretaceous.

OMAN

In Block 8 ofshore Oman, a remapping of the West Bukha field has identified a new prospect adjacent to the West Bukha field. Further analysis for drilling a development well is in progress.

Block 36 is located in the prolific Rub Al Khali basin and covers a surface area of approximately 18,000 square kilometers. Two of the three exploration wells previously drilled on the block have confirmed the presence of source rock in the basal Silurian hot shale, organic rich shale that has sourced the majority of the oil and gas fields discovered in the Arabian Peninsula and North Africa. All three wells have hydrocarbon shows. Multiple stacked reservoir units have been identified and mapped on the existing seismic data, comprising approximately 10,000 kilometers of 2D seismic complemented by high-resolution gravity and aeromagnetic surveys. An extensive compilation of several vintages of 2D seismic and reprocessing have been executed this year. The company is planning to acquire new 2D and 3D seismic data over areas of identified prospectivity and a drilling campaign is planned in 2015.

The company actively pursues new opportunities in Oman, primarily onshore.

YEMEN

In 2013, the Salsala-1 exploration well in Block 32 led to a new oil discovery on the Meshgha structure. The well was directionally drilled to a total depth of 4,147 meters and encountered oil shows in the Shuqra formation which was perforated over a 32-meter interval, acidized and tested. The well flowed naturally at a rate of 5,900 bopd of 36º API oil before being choked back to 3,400 bopd due to limited surface storage capacity. The plan is to perform an extended well test this year, and also to drill a second well on the structure to appraise the field, recently renamed Meshgha. If successful, a new fast-track development of Meshgha may be feasible. Due to civil unrest in Yemen current conditions are leading to delays in the company's drilling and development programs.

TUNISIA

The Sfax Ofshore Exploration Permit and the Ras El Besh Concession are located in the prolific Gulf of Gabes and cover 3,296 square kilometers, mostly ofshore in shallow waters. To date, three discoveries have been made by previous operators. These assets also ofer significant exploration potential.

In the Sfax permit, the company completed preparations for a 3D seismic program with planned start-up in the third quarter. The company also completed preparations to drill the Jawhara-3 exploration well, expected to spud in the third quarter of 2014.

At the Fkirine license onshore Tunisia, reprocessing and interpretation of 2D seismic and field data are ongoing.

RAS AL KHAIMAH

The company has farmed down its working interest in the RAK Onshore license to 70 percent. A detailed technical study of the block has commenced, including re-processing of 600 kilometers of vintage seismic data. The study will take approximately 15 months to complete and is designed to mature drillable prospects.

SOMALILAND

Block SL18 onshore Somaliland covers a surface area of 12,000 square kilometers and adds substantial exploration acreage to the company's portfolio in a high potential area that is both prospective and undrilled. Having been active across the Gulf of Aden in Yemen since the late 1990s, the opportunity falls within the company's geographical and geological sphere of expertise. The government is in the process of implementing an Oil Protection Unit (OPU) to support further seismic acquisitions by DNO and other international oil companies operating in Somailand. The OPU is expected to be operational in 2015. The company has completed field survey and environmental assessment studies over the block. A gravity/ aeromagnetic survey is planned to be acquired during the fall of 2014, while seismic acquisition will be carried out after the OPU has been set up by the government.

Health, safety, security and environment

In the second quarter the company's HSSE performance remained within satisfactory levels with no major cases recorded.

Financial review

Revenues, profts and cash fow

Sales revenues in the second quarter were USD 143.4 million, compared to USD 112.8 million in the previous quarter.

A portion of oil produced from the Tawke field in the Kurdistan region of Iraq was delivered to Fish Khabur for onward transfer to Ceyhan. No revenues have been recorded for these volumes, which amounted to approximately 2.2 million barrels of oil net to DNO on a CWI basis in the second quarter. However, the company continued to sell production from the field into the local market throughout the quarter. Domestic sales contributed to a revenue of USD 103.1 million in the quarter.

Revenues from oil and gas production at Block 8 ofshore Oman amounted to USD 23.7 million in the second quarter, and revenues from the company's producing assets onshore Yemen amounted to USD 16.6 million.

Operating profit during the second quarter was USD 54.6 million and net profit USD 44.4 million. Total investments during the second quarter (excluding the purchase of financial assets) were USD 97.4 million.

The company has continued to maintain a conservative capital structure. At the end of the second quarter, the company's free cash position was USD 195.1 million.

Cost of goods sold

In the second quarter, the cost of goods sold was USD 78.9 million compared with USD 57.0 million in the corresponding period last year.

LIFTING COSTS

Lifting costs were USD 23.1 million in the second quarter, compared with USD 32.0 million in the corresponding period last year. The decrease is related to changes in workovers, maintenance and cost estimates during the period. Total and unit lifting costs per country are presented in the accompanying table.

Lifting costs

		ŏŏŏŏŏŏ1.0!.		!.ġ0+ġ 0!	ŏŏŏŏŏŏŏŏŏŏ1(( 5!.
USD million	Q2 2014	Q2 2013	2014	2013	2013	2012
1. %/0*	ĉċĈ	āąċĆ	ĂăċĈ	ĂăċĈ	ąćċĊ	ăĀċĂ
)*	ćċĀ	ąċā	Ċċĉ	ĉċć	āĊċĀ	ăăċĆ
Yemen	ĉċă	āăċą	ĂĀċă	ĂĆċĂ	ąąċĈ	ăĉċć
Total	23.1	32.0	53.8	57.4	110.6	102.3
Including export volumes
USD million	Q2 2014	Q2 2013	2014	2013	2013	2012
1. %/0*	āċăĆ	ćċĆā	ĂċąĆ	Ĉċăć	ĆċĂĊ	ĂċĊĂ
)*	ĊċĆć	ąċĈĆ	ĈċĉĈ	ąċĂĊ	ĆċāĈ	āĈċăĂ
Yemen	ăĈċĂĂ	ăĊċĊĊ	ąĈċăā	ăĆċĊă	ăăċĈą	ĂĈċĂā
Average	3.16	9.35	4.75	9.69	7.96	7.48

DEPRECIATION, DEPLETION AND AMORTIZATION (DD&A)

DD&A amounted to USD 55.5 million in the second quarter compared to USD 24.7 million in the corresponding period last year. The higher charge is due to a combination of increased production volumes and the revision and reclassification of certain reserves following the most recent independent review by DeGolyer & MacNaughton.

DD&A

	ŏŏŏŏŏŏ1.0!.		!.ġ0+ġ 0!		ŏŏŏŏŏŏŏŏŏŏ1(( 5!.
USD million	Q2 2014	Q2 2013	2014	2013	2013	2012
1. %/0*	ăĆċą	āĀċĀ	Ćāċą	āĆċĀ	ăĆċĆ	Ćąċā
)*	āćċĀ	Ċċă	ăćċĀ	Ăăċą	ąāċĀ	ăĆċā
Yemen	ąċĀ	Ćċą	ĉċā	āĀċć	ĂĀċĂ	āćċą
Total DD&A	55.5	24.7	95.5	49.0	96.8	105.6

Including export volumes

USD/boe	Q2 2014	Q2 2013	2014	2013	2013	2012
1. %/0*	āăċĉą	ĈċćĈ	āăċćć	ĈċĈĀ	ĈċĈĊ	āĀċĂĉ
)*	ąąċĈĈ	āĊċąĂ	ąĈċăć	ĂĀċĀĈ	āĊċąĉ	ĂćċĀĂ
Yemen	ĂĈċĆĆ	ĂąċąĈ	ĂĈċĆć	ĂąċĂĉ	ĂăċćĈ	āĊċĆĈ
Average DD&A	18.11	12.33	19.01	13.80	12.83	14.90

Exploration and capital expenditure

EXPLORATION COSTS EXPENSED

Expensed exploration costs in the second quarter were USD 4.0 million, and relate mainly to activities in Tunisia.

Exploration costs expensed

	ŏŏŏŏŏŏ1.0!.		!.ġ0+ġ 0!		ŏŏŏŏŏŏŏŏŏŏ1(( 5!.
USD million	Q2 2014	Q2 2013	2014	2013	2013	2012
1. %/0*	Āċā	Āċā	ĀċĂ	Āċā	Āċą	ąċā
)*	āċĀ	ĀċĂ	ĂċĂ	ĀċĈ	āċć	āċĂ
Yemen	Āċā	ĀċĂ	ġĀċā	Āċă	Āċć	āċā
	ĀċĂ	Āċā	Āċă	ĀċĂ	Āċą	Āċą
1*%/%	Ăċą	āċĉ	ĆċĀ	ăċĀ	ćċă	ćċĆ
0\$!.	ĀċĂ	ġ	āċć	ĀċĂ	ĀċĊ	ġ
Total	4.0	2.4	9.3	4.3	10.3	13.4

ACQUISITION AND DEVELOPMENT COSTS (INCL. INTANGIBLE ASSETS)

Capital expenditures in the second quarter were USD 97.4 million compared with USD 79.9 million in the corresponding period last year. Costs associated with development projects at the Tawke field amounted to USD 40 million. Costs associated with the Summail field development amounted to USD 52 million and costs associated with appraisal and development work at the Erbil license amounted to USD 5 million

In Yemen, corrections of previous estimates for drilling in Block 43 and facilities at Block 47 explain the negative net investment in the second quarter. The capitalized costs in Block 32 amounted to USD 0.2 million in the quarter, investments in Block 53 were USD 0.5 million and investments in Block 47 were USD 0.1 million. No investments were made in Block 43. Costs associated with the West Bukha-5 workover offshore Oman amounted to USD 1.2 million in the quarter. Investments related to the Sfax permit in Tunisia amounted to USD 0.5 million

Acqusition and development costs

		Quarter	Year-to-date			Full year
USD million	Q2 2014	Q 2 2013	2014	2013	2013	2012
Kurdistan	96.5	42.4	155.5	81.5	167.8	103.7
Oman	1.2	6.4	15.3	25.8	31.7	75.0
Yemen	$-1.7$	6.8	4.3	12.6	26.7	17.0
UAE	$-0.2$	23.3	$-0.5$	24.1	59.9	1.2
Tunisia	0.5	$\overline{\phantom{a}}$	6.5	$\overline{\phantom{a}}$
Other	1.1	O.9	1.7	1.1	2.2	0.3
Total	97.4	79.9	182.7	145.1	288.3	197.2

Responsibility statement

We confirm to the best of our knowledge that the condensed set of financial statements for the period 1 January to 30 June 2014 has been prepared in accordance with IAS 34 Interim Financial Reporting and gives a true and fair view of DNO's and the Group's assets, liabilities, financial position and result for the period viewed

Oslo, 21 August 2014

Shelley Watson

Board Member

Bijan Mossavar-Rahmani Executive Chairman

Lars A. Takla Deputy Chairman

Ellen K. Dyvik Board Member

in their entirety, and that the interim management report includes a fair review of any significant events that arose during the six-month period and their effect on the half-yearly report, any significant related parties' transactions, and a description of the significant risks and uncertainties for the remaining six months of the year.

Gunnar Hirsti Board Member

Bjørn Dale President/Managing Director

Consolidated statements of comprehensive income

		Quarter		Year-to-date		Full year
USD million	Note	Q2 2014	Q2 2013	2014	2013	2013
Sales	2, 3	143.4	130.9	256.2	234.2	503.0
Cost of goods sold	$\overline{4}$	$-78.9$	$-57.0$	$-150.0$	$-106.8$	$-208.3$
Gross profit		64.5	74.0	106.2	127.3	294.7
Other operating income		2.5	O.1	2.6	O.2	0.3
Tariffs and transportation		$-1.0$	$-1.5$	$-1.3$	$-2.4$	$-4.2$
Administrative expense/Other operating expenses		$-7.4$	$-7.2$	$-14.4$	$-10.8$	$-30.2$
Impairment oil and gas assets	$\overline{7}$	$\mathbf{L}$	$\overline{\phantom{a}}$	$\blacksquare$	$\overline{\phantom{a}}$	$-182.3$
Exploration cost expensed	5	$-4.0$	$-2.4$	$-9.3$	$-4.3$	$-10.3$
Net gain/-loss from sale of PP&E	$\overline{7}$	$\overline{\phantom{a}}$	$\centerdot$	0.4	$\frac{1}{2}$	$-0.1$
Profit from operating activities		54.6	62.9	84.2	110.0	67.9
Financial income		3.7	1.1	6.3	2.0	2.6
Financial expenses		$-11.6$	$-3.9$	$-17.8$	$-8.0$	$-12.3$
Profit before income tax		46.6	60.1	72.8	104.0	58.2
Income tax expense	6	$-2.2$	$-12.1$	$-4.7$	$-25.8$	$-31.3$
Net profit		44.4	48.0	68.1	78.1	27.0
Other comprehensive income
Currency translation differences		$-0.2$	4.1	$-0.2$	9.6	10.6
Fair value changes available-for-sale financial assets		0.6		6.4	$\overline{\phantom{a}}$
Other comprehensive income that may be reclassified to profit or loss in subsequent periods		0.4	4.1	6.2	9.6	10.6
Other comprehensive income that will not be reclassified to profit or loss in subsequent periods		$\overline{\phantom{a}}$	$\blacksquare$	÷,	$\blacksquare$
Total other comprehensive income, net of tax	6	0.4	4.1	6.2	9.6	10.6
Total comprehensive income, net of tax		44.8	52.1	74.3	87.8	37.6
Net profit attributable to:
Equity holders of the parent		44.4	48.0	68.1	78.1	27.0
Total comprehensive income attributable to:
Equity holders of the parent		44.8	52.1	74.3	87.8	37.6
Earnings per share, basic		0.04	0.05	0.07	0.08	0.03
Earnings per share, diluted		0.04	0.05	0.07	0.08	0.03

Condensed consolidated statements of fnancial position

ASSETS		Quarter		Full year
USD million	Note	Q2 2014	Q2 2013	2013
Non-current assets ++ 3%((		ġ	ąćċą	ġ
!"!! %*+)! 04 //!0/	ć	ĈċĈ	ĈċĈ	ĈċĈ
0\$!. %0#%(! //!0/	Ĉ	āćĀċă	āĆĈċĉ	āĆĉċă
.+,!.05Č ,(0 * !-1%,)!0	Ĉ	ĉĀĊċă	ĈććċĊ	ĈĂĆċĂ
2%((! "+. /(! %2!/0)!0/	ĉ	ĆăċĆ	ġ	āĀċĉ
0\$!. +ġ1!*0 //!0/		Ćċā	ġ	Ăċą
Total non-current assets		1,035.9	978.7	904.4
Current assets
2!0+.%!/	4	ććċă	ąāċĆ	ĆĀċĉ
. ! * +0\$!. .!!%2(!/		āĂćċĀ	āĀĀċă	āāąċĀ
/\$ * /\$ !-1%2(!*0/		āĊĆċā	ĂĈăċą	ĂćĆċĊ
Total current assets		387.5	415.3	430.7
TOTAL ASSETS		1,423.3	1,394.0	1,335.1
EQUITY AND LIABILITIES		Quarter		Full year
USD million	Note	Q2 2014	Q2 2013	2013
Equity
\$.! ,%0(		ăăċć	ăăċć	ăăċć
0\$!. .!/!.2!/		āĉĀċĊ	āĈăċĉ	āĈąċĈ
!0%! !.%*#/		ćāĉċă	ćĀāċą	ĆĆĀċĂ
Total equity		832.8	808.7	758.5
Non-current liabilities
0!.!/0ġ!.%# (%%(%0%!/	Ċ	ĂĂĊċĉ	ĂăĀċĉ	ĂăĀċą
!"!! %*+)! 04 (%%(%0%!/	ć	ĉĈċć	āĂĉċĈ	āĀāċĆ
.+2%/%+*/ "+. +0\$!. (%%(%0%!/ * \$.#!/	10	āāĆċĉ	ăćċć	ĊăċĀ
Total non-current liabilities		433.2	396.1	424.9
Current liabilities
. ! * +0\$!. ,5(!/		ćăċā	ąăċą	ĆćċĆ
*+)! 04!/ ,5(!	ć	āąċĆ	āąċą	āĆċĆ
.+2%/%+*/ "+. +0\$!. (%%(%0%!/ * \$.#!/	10	ĈĊċĈ	āăāċă	ĈĊċĈ
Total current liabilities		157.4	189.2	151.7
TOTAL EQUITY AND LIABILITIES		1,423.3	1,394.0	1,335.1

Condensed consolidated cash fow statements

		Quarter			Year-to-date	Full year
USD million	Note	Q2 2014	Q2 2013	2014	2013	2013
Operating activities
.+ü0ĥġ(+// !"+.! %*+)! 04		ąćċć	ćĀċā	ĈĂċĉ	āĀąċĀ	ĆĉċĂ
Adjustments to add (deduct) non-cash items:
Ňĥġ !0 %0!.!/0 !4,!/! Ĩġ%*+)!ĩ		āĀċĉ	āċć	āĂċĈ	ăċĊ	ĈċĂ
.!2%+1/(5 ,%0(%6! !4,(+.0%+ * !2(10%+ !4,!*/!/		ġ	ġ	ġ	ġ	ġ
!,.!%0%+* +" Ē	4	ĆĆċĊ	ĂĆċĀ	ĊćċĂ	ąĊċĆ	ĊĈċĉ
),%.)!*0 (+//	Ĉ	ġ	ġ	ġ	ġ	āĉĂċă
%ĥ(+// +	Ĉ	ġ	ġ	ġĀċą	ġ	Āċā
0\$!. ĵ		ăċĈ	ġāċĆ	āĉċă	ġĊċą	ĆĂċă
Changes in working capital:
ġ 2!0+.%!/		ġāĀċă	ġāċĉ	ġāĆċĆ	ġĀċć	ġĊċĊ
ġ . ! * +0\$!. .!!%2(!/		ġĂăċĈ	ġĂćċĀ	ġāąċĈ	Ăăċą	Ĉċą
ġ . ! * +0\$!. ,5(!/		ġāăċĂ	ĊċĂ	ćċć	ăċą	āćċĆ
ġ .+2%/%+*/ "+. +0\$!. (%%(%0%!/ * \$.#!/		Ăċā	ġĆċĉ	Āċā	ġĈċą	ġĆĊċā
/\$ #!!.0! ".+) +,!.0%+/		ĈāċĈ	ćĀċĉ	āĈćċā	āććċć	ăĆĂċĉ
*+)! 04!/ ,%		ġĊċĆ	ġāąċā	ġāĊċć	ġăĀċć	ġćĂċā
*0!.!/0 ,%		ġąċĉ	ġĆċĀ	ġĊċĊ	ġāĀċĂ	ġĂĀċă
Net cash from operating activities		57.5	41.7	146.6	125.8	270.4
Investing activities
1.\$/!/ +" %0#%(! //!0/	Ĉ	āċā	ġāąċĂ	ġĆċĀ	ġĂĈċĊ	ġăĆċĊ
.+!! / ".+) /(! +" %0#%(! //!0/		ġ	ġ	Āċă	ġ	ġ
1.\$/!/ +" 0*#%(! //!0/	Ĉ	ġĊĉċą	ġćĆċĈ	ġāĈĈċĈ	ġāāĈċĂ	ġĂĆĂċĆ
.+!! / ".+) /(! +" 0*#%(! //!0/		ġ	ġ	ĀċĆ	ġ	ġ
1.\$/!/ +" 2%((!ġ"+.ġ/(! ü**%( //!0/		ġĈċĉ	ġ	ġăćċă	ġ	ġāĀċĉ
.+!! / ".+) /(! +" 2%((!ġ"+.ġ/(! ü**%( //!0/		ġ	ĀċĆ	ġ	ĀċĆ	ĀċĆ
*0!.!/0 .!!%2!		Āċā	Āċā	ĀċĂ	ĀċĂ	Āċć
Net cash from/-used in investing activities		-105.0	-79.3	-217.9	-144.4	-298.1
Financing activities
!,5)!0 +" ++3%#/		ġ	ġ	ġ	ġ	ġ
1.\$/! +" 0.!/1.5 /\$.!/Č %(1 %# +,0%+*/		ġ	ġ	ġ	ġ	ġ
Net cash from/-used financing activities		-	-	ġ	ġ	-
Net increase/-decrease in cash and cash equivalents		-47.5	-37.6	-71.4	-18.6	-27.7
/\$ * /\$ !-1%2(!0/ 0 !#%%# +" 0\$! ,!.%+		ĂąĂċĂ	ăĀāċă	ĂćĆċĊ	ĂĈĀċĊ	ĂĈĀċĊ
4\$#! #%ĥġ(+//!/ + /\$ * /\$ !-1%2(!0/		ĀċĆ	Ċċĉ	ĀċĆ	Ăāċā	ĂĂċĈ
Cash and cash equivalents at end of the period		195.1	273.4	195.1	273.4	265.9

ĵŏŏ *(1 ! %* 0\$! (%*! 0\$!. 1* !. ,!.0%*# 0%2%0%!/ .! "+.!%#* 1..!*5 !û!0/ .!(0! 0+ %*0!.!/0ġ!.%*# (+*/ * !-1%05Č -1%/%0%+*ĥ %/,+/(/ +" Ē 3%0\$ *+*ġ/\$ !û!0Č \$*#! %* .1(/ +" (+*#ġ0!.) (%%(%0%!/ 3%0\$ *+*ġ/\$ !û!0 * +0\$!. *+*ġ/\$ %0!)/ ".+) %*2!/0%*# * ü**%*# 0%2%0%!/ċ

Condensed consolidated statements of changes in equity

USD million	Share capital	Other reserves	Retained earnings	Total equity
Balance at 1 January 2013	33.6	164.2	523.2	721.0
Fair value gains, net of tax:
ġ 2%((!ġ"+.ġ/(! ü**%( //!0/	ġ	ġ	ġ	ġ
1!5 0./(0%+ %û!.!!/	ġ	Ċċć	ġ	Ċċć
0\$!. +),.!\$!/%2! %+)!ĥġ(+//	ġ	Ċċć	ġ	Ċċć
.+ü0 "+. 0\$! ,!.%+	ġ	ġ	Ĉĉċā	Ĉĉċā
+0( +),.!\$!/%2! %+)!	ġ	Ċċć	Ĉĉċā	ĉĈċĉ
//1! +" /\$.! ,%0(	ġ	ġ	ġ	ġ
1.\$/! +" 0.!/1.5 /\$.!/	ġ	ġ	ġ	ġ
(! +" 0.!/1.5 /\$.!/	ġ	ġ	ġ	ġ
	ġ	ġ	ġ	ġ
Balance at 30 June 2013	33.6	173.8	601.4	808.7

USD million	Share capital	Other reserves	Retained earnings	Total equity
Balance at 1 January 2014	33.6	174.7	550.2	758.5
Fair value gains, net of tax:
ġ 2%((!ġ"+.ġ/(! ü**%( //!0/	ġ	ćċą	ġ	ćċą
1!5 0./(0%+ %û!.!!/	ġ	ġĀċĂ	ġ	ġĀċĂ
0\$!. +),.!\$!/%2! %+)!ĥġ(+//	ġ	ćċĂ	ġ	ćċĂ
.+ü0 "+. 0\$! ,!.%+	ġ	ġ	ćĉċā	ćĉċā
+0( +),.!\$!/%2! %+)!	ġ	ćċĂ	ćĉċā	Ĉąċă
//1! +" /\$.! ,%0(	ġ	ġ	ġ	ġ
1.\$/! +" 0.!/1.5 /\$.!/	ġ	ġ	ġ	ġ
(! +" 0.!/1.5 /\$.!/	ġ	ġ	ġ	ġ
	ġ	ġ	ġ	ġ
Balance at 30 June 2014	33.6	180.9	618.3	832.8

Notes to the interim condensed consolidated financial accounts

Note $1 \parallel$ Basis of preparation and accounting policies

The condensed consolidated financial statements have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting and IFRS standards issued and effective at date of reporting as adopted by the EU. The interim report has also been prepared in accordance with Stock Exchange regulations.

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the group's annual financial statements as at 31 December 2013. The interim financial information for 2014 and 2013 is unaudited

The condensed consolidated financial statements have been prepared on a historical cost basis, with the following exemption: * All derivatives, all financial assets and liabilities held for trading, liabilities related to share-based payments and all financial assets that are classified as available-for-sale, are recognized at fair value.

A detailed description of the accounting policies applied is included in the DNO annual financial statements for 2013. The accounting policies response to the preparation of the interim consolidated financial statements are consistent with those followed in the preparation of the group's annual financial statements for the year ended 31 December 2013. For information about the standards and interpretations effective from 1 January 2014, please refer to Note 1 in the group's annual financial statements for 2013. The group has adopted the following new standards with effect from 1 January 2014:

IFRS 10 Consolidated Financial Statements IFRS 11 Joint Arrangements IFRS 12 Disclosure of Interests in Other Entities

The implementation of these standards has no effect on the group's financial position or performance.

DNO changed the presentation currency for the consolidated accounts from NOK to USD with effect from 1 January 2014. See note 11 for restated historical figures.

Note 2 || Segment information

DNO is reporting five (5) operating segments; Yemen (YEM), Kurdistan (KUR), Oman (OMAN), Ras Al Khaimah (UAE) and Tunisia (TUN). The operating segments equal the reportable segments.

Three months ended 30 June 2014 USD million	Note	TUN	YEM	KUR	OMAN	UAE	OTHER	Total report. segm.	Unalloc./ elimin.	GROUP
Income statement information
External sales	3	$\overline{\phantom{a}}$	16.6	103.1	23.7	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	143.4	$\overline{\phantom{a}}$	143.4
Inter-segment sales		0.3	O.2	1.0	2.0	O.1	O.1	3.8	$-3.8$	$\overline{\phantom{a}}$
Cost of goods sold	4	$\overline{\phantom{a}}$	$-12.4$	$-44.2$	$-22.1$	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	$-78.7$	$-0.2$	$-78.9$
Gross profit		0.3	4.4	59.9	3.7	O.1	O.1	68.5	$-4.0$	64.5
Segment operating result		$-2.2$	2.3	57.2	0.9	2.1	$-1.1$	59.2	$-1.8$	57.4
Interest - net										$-10.8$
Gain/-loss on sale of shares
Income tax expense		$\overline{\phantom{a}}$	$-1.2$	$\overline{\phantom{a}}$	$-1.0$	$\overline{\phantom{a}}$	$\overline{\phantom{a}}$	$-2.2$	$\overline{\phantom{a}}$	$-2.2$
Net profit/-loss										44.4
Segment assets		45.1	114.9	827.9	172.0	48.2	1.0	1,209.1	214.2	1,423.3

Three months ended 30 June 2013

USD million	Note	TUN	YEM	KUR	OMAN	UAE	OTHER	report. segm.	elimin.	GROUP
Income statement information
40!.*( /(!/	ă	ġ	ĂĂċĈ	ĈăċĊ	ăąċă	ġ	ġ	āăĀċĊ	ġ	130.9
0!.ġ/!#)!0 /(!/		Āċă	ĀċĈ	āċĉ	ĀċĊ	āċą	Āċā	Ćċā	ġĆċā	-
+/0 +" #++ / /+(	4	ġ	ġāĉċĉ	ġĂąċć	ġāăċą	ġ	ġ	ġĆćċĉ	ġĀċā	-57.0
Gross profit		0.3	4.6	51.2	21.7	1.4	0.1	79.2	-5.3	74.0
Segment operating result		-1.7	-0.2	46.7	20.1	-0.6	0.7	65.0	-3.4	61.6
0!.!/0 ġ !0										-1.6
%ĥġ(+// + /(! +" /\$.!/										-
+)! 04 !4,!/!		ġ	ġĀċą	ġ	ġāāċĈ	ġ	ġ	ġāĂċā	ġ	-12.1
Net profit/-loss										48.0
Segment assets		9.8	124.5	582.4	290.6	113.9	4.1	1,125.3	268.7	1,394.0
Six months ended 30 June 2014 USD million	Note	TUN	YEM	KUR	OMAN	UAE	OTHER	Total report. segm.	Unalloc./ elimin.	GROUP
Income statement information
40!.*( /(!/	ă	ġ	ăĂċĈ	āĈāċĉ	ĆāċĈ	ġ	ġ	ĂĆćċĂ	ġ	256.2
0!.ġ/!#)!0 /(!/		Āċă	Āċĉ	āċĈ	ąċă	ĀċĂ	Āċă	Ĉċć	ġĈċć	-
+/0 +" #++ / /+(	4	ġ	ġĂĉċą	ġĈĆċă	ġąĆċĉ	ġ	ġ	ġāąĊċć	ġĀċą	-150.0
Gross profit		0.3	5.0	98.2	10.2	0.2	0.3	114.2	-8.0	106.2
Segment operating result		-4.8	1.3	92.5	4.4	1.9	-2.4	93.0	-7.5	85.5
0!.!/0 ġ !0										-12.7
%ĥġ(+// + /(! +" /\$.!/										-
+)! 04 !4,!/!		ġ	ġāċă	ġ	ġăċą	ġ	ġ	ġąċĈ	ġ	-4.7
Net profit/-loss										68.1
Segment assets		45.1	114.9	827.9	172.0	48.2	1.0	1,209.1	214.2	1,423.3
Six months ended 30 June 2013 USD million	Note	TUN	YEM	KUR	OMAN	UAE	OTHER	Total report. segm.	Unalloc./ elimin.	GROUP
Income statement information
40!.*( /(!/	ă	ġ	ąćċĈ	āāąċĆ	ĈĂċĊ	ġ	ġ	ĂăąċĂ	ġ	234.2
0!.ġ/!#)!0 /(!/		Āċć	āċă	ĂċĈ	ĂċĀ	āċą	Āċā	ĉċā	ġĉċā	-
+/0 +" #++ / /+(	4	ġ	ġăĆċĉ	ġăĉċĉ	ġăĂċĀ	ġ	ġĀċā	ġāĀćċć	ġĀċĂ	-106.8
Gross profit		0.6	12.3	78.4	42.9	1.4	0.1	135.7	-8.3	127.3
Segment operating result		-2.7	5.2	72.4	40.2	-0.8	0.5	114.7	-6.9	107.8
0!.!/0 ġ !0										-3.9
%ĥġ(+// + /(! +" /\$.!/										-
+)! 04 !4,!/!		ġ	ġĂċĉ	ġ	ġĂăċā	ġ	ġ	ġĂĆċĉ	ġ	-25.8
Net profit/-loss										78.1
Segment assets		9.8	124.5	582.4	290.6	113.9	4.1	1,125.3	268.7	1,394.0

Total report.

Unalloc./

.!,+.0/ %0/ +,!.0%+*/ #+2!.*! 5 .+ 10%+* \$.%*# #.!!)!*0/ĥ.+ 10%+* \$.%*# +*0.0/ Ĩĥĩ +. %*# 0+ 0\$! *!0 !*0%0(!)!*0 )!0\$+ ċ

	Quarter		Year-to-date	Full year
USD million	Q2 2014	Q2 2013	2014	2013	2013
(! +" ,!0.+(!1) ,.+ 10/	āąăċą	āăĀċĊ	ĂĆćċĂ	ĂăąċĂ	ĆĀăċĀ
Total sales	143.4	130.9	256.2	234.2	503.0

\$!.! 3!.! *+ !4,+.0 /(!/ ".+) 0\$! 3'! ü!( %* 0\$! 1. %/0* .!#%+* +" .- %* Ă ĂĀāąČ +*(5 (+( /(!/ċ

Note 4 || Cost of goods sold/inventory

	Quarter		Year-to-date	Full year
USD million	Q2 2014	Q2 2013	2014	2013	2013
%"0%*# +/0/ ĵ	ġĂăċā	ġăĂċĀ	ġĆăċĉ	ġĆĈċą	ġāāĀċć
!,.!%0%+Č !,(!0%+ * )+.0%60%+*	ġĆĆċĊ	ġĂĆċĀ	ġĊćċĂ	ġąĊċą	ġĊĈċĉ
Total cost of goods sold	-78.9	-57.0	-150.0	-106.8	-208.3

ĵŏŏ?%"0%*# +/0/ +*/%/0 +" !4,!*/!/ .!(0%*# 0+ 0\$! ,.+ 10%+* +" +%( * #/Č %*(1 %*# +,!.0%+* * )%*0!**! +" %*/0((0%+*/Č 3!(( %*0!.2!*0%+* * 3+.'+2!. 0%2%0%!/Č %*/1.*! * +/0/ %* +3* +.#*%60%+*ċ

	Quarter
USD million	Q2 2014	Q2 2013	2013
,.! ,.0/	Ćąċā	ĂĂċā	ăćċĊ
0\$!. %2!0+.5	āĂċĂ	āĊċą	āąċĀ
Total inventory	66.3	41.5	50.8

,.! ,.0/ .!(0! )%*(5 0+ 0\$! 3'! ü!( %* 0\$! 1. %/0* .!#%+* +" .-ċ 0\$!. %*2!*0+.5 .!(0!/ 0+ .%((%*# * +),(!0%+* )0!.%(/ "+. 0\$! +û/\$+.! (+'/ %* )* * ċ

Note 5 || Exploration cost

	Quarter		Year-to-date	Full year
USD million	Q2 2014	Q2 2013	2014	2013	2013
4,(+.0%+ !4,!/!/ ĨĒ * ü!( /1.2!5/ĩ	ġĂċĂ	ġāċĀ	ġĆċă	ġāċą	ġăċą
!%/)% +/0/	ġ	ġĀċā	ġĀċĂ	ġĀċă	ġĀċą
4,(+.0%+* +/0/ ,%0(%6! 0\$%/ 5!. %! 0+ +/0	ġ	ġ	Āċā	ġ	ġ
0\$!. !4,(+.0%+ +/0 !4,!/!	ġāċĉ	ġāċă	ġăċĊ	ġĂċć	ġćċć
Total exploration cost expensed *	-4.0	-2.4	-9.3	-4.3	-10.3

ĵ +. !0%(/ +* #!+#.,\$% /,.! +" !4,(+.0%+* +/0 !4,!*/! Č /!! 0\$! %**%( .!2%!3 /!0%+*ċ

Note 6 || Income taxes

	Quarter		Year-to-date		Full year
USD million	Q2 2014	Q2 2013	2014	2013	2013
!"!! 04!/	ĊċĀ	Ćċą	āăċĉ	āāċĉ	ăĊċĀ
+)!04!/,5(!.!(0! 0+.+ 10%+\$.%##.!!)!0/ Ĩ/ĩ %!)! )	ġāāċĂ	ġāĈċĆ	ġāĉċć	ġăĈċć	ġĈĀċĂ
Total income tax expense	-2.2	-12.1	-4.7	-25.8	-31.3

*+)! 04!/ ,5(! )+1*0%*# 0+ āąċĆ )%((%+* .!(0!/ !*0%.!(5 0+ 0\$! +),*5 04 !(!)!*0 %* +1. .+ 10%+* \$.%*# #.!!)!*0/ %* !)!* * )*ċ \$! 04!/ ,5(! 3%(( ! /!00(! %* '%* ċ

\$! %*0!.%) ,!.%+ %*+)! 04 !4,!*/! .!(0!/ 0+ 0\$! !)!* * )* +,!.0%+*/ * %/ (1(0! 5 ,,(5%*# 0\$! 04 .0! ,,(%(! 0+ 0\$! !4,!0! 0+0( **1( !.*%*#/ċ +. %*# 0+ 0\$! *!0 !*0%0(!)!*0 )!0\$+ Č %*+)! 04!/ ,5(! .!(0! 0+ / +*/%/0 +" 0\$! +.,+.0! 04 .0! ,,(%(! 1* !. 0\$! #.!!)!*0/ċ + 04 %/ ,,(%(! 0+ 0\$! +,!.0%+*/ %* ŏ0\$! 1. %/0* .!#%+* +" .- / 0\$!.! %/ 1..!*0(5 *+ !/0(%/\$! 04 .!#%)!ċ

\$!.! .! *+ 04 +*/!-1!*!/ 00\$! 0+ %0!)/ .!+. ! %* +0\$!. +),.!\$!*/%2! %*+)!ċ

	Quarter		Year-to-date		Full year
USD million	Q2 2014	Q2 2013	2014	2013	2013
-1%/%0%+*/ +" Ē ĵ	Ċĉċą	ćĆċĈ	āĈĈċĈ	āāĈċĂ	ĂĆĂċĆ
-1%/%0%+/ +" %0*#%(! //!0/ ĵĵ	ġāċā	āąċĂ	ĆċĀ	ĂĈċĊ	ăĆċĊ
Net book amount PP&E	809.3	766.9	809.3	766.9	725.2
Net book amount intangible assets	160.3	157.8	160.3	157.8	158.3
Sale of PP&E
.+!! /	ġ	ġ	ġ	ġ	ĀċĈ
5%*# 2(1!	ġ	ġ	ġ	ġ	Āċĉ
!0 #%*ĥġ(+//	ġ	ġ	ġ	ġ	ġĀċā
),%.)!*0 +" Ē	ġ	ġ	ġ	ġ	āĉĂċă

ĵ -1%/%0%+*/ .!(0! 0+ !2!(+,)!*0 //!0/Č //!0/ %* +,!.0%+* * +0\$!. Ē

ĵĵ -1%/%0%+*/ .!(0! 0+ ,%0(%6! !4,(+.0%+* +/0/ * (%!*/! %*0!.!/0/

),%.)!*0 \$.#! +" āĉĂċă )%((%+* %* ĂĀāă 3/ .!(0! 0+ 0\$! //!0/ %* Ĩ(!\$ * ĩ * -(+' ĉ * -(+' ăā %* )*ċ

Note 8 || Available-for-sale fnancial assets

2%((!ġ"+.ġ/(! ü**%( //!0/ .! .!2(1! 0 "%. 2(1! Ĩ).'!0 ,.%!Č 3\$!.! 2%((!ĩ 0 0\$! !* +" !\$ ,!.%+ Č 3%0\$ \$*#!/ \$.#! 0+ +0\$!. +),.!\$!*/%2! %*+)!ċ ),%.)!*0 3%(( ! \$.#! 0+ ,.+ü0 +. (+//Č 3\$%(! .!2!./( +" %),%.)!*0 3%(( ! 0'!* 0\$.+1#\$ +0\$!. +),.!\$!*/%2! %*+)!ċ ŏŏŏŏŏŏ

	Quarter		Year-to-date		Full year
USD million	Q2 2014	Q2 2013	2014	2013	2013
!#%*%# +" 0\$! ,!.%+	ąĆċĂ	Āċă	āĀċĉ	Āċă	ĀċĆ
%0%+*/	Ĉċĉ	ġ	ăćċă	ġ	āĀċĊ
(!/	ġ	ġĀċă	ġ	ġĀċă	ġĀċĆ
!2(10%+ /1.,(1/ĥ !ü%0 0./"!. 0+ !-1%05	Āċć	ġĀċā	ćċą	ġ	ġ
),%.)!*0	ġ	ġ	ġ	ġ	ġ
4\$#! %û!.!!/	ġ	ġ	ġ	ġ	ġĀċā
End of the period 1)	53.5	-	53.5	-	10.8
+ġ1!0 ,+.0%+*	ĆăċĆ	ġ	ĆăċĆ	ġ	āĀċĉ
1!0 ,+.0%+	ġ	ġ			ġ

1) Available-for-sale financial assets include the following:

	Quarter	Full year
USD million	Q2 2014	Q2 2013	2013
Listed securities:
- Other securities	ġ	ġ	ġ
Unlisted securities:
- RAK Petroleum PCL	ĆăċĆ	ġ	āĀċĉ
1) Total available-for-sale financial assets	53.5	-	10.8

* 0\$! "+1.0\$ -1.0!. ĂĀāăČ -1%.! ăĊČĊĊćČĈĀĉ /\$.!/ %* !0.+(!1) ?ċ * 0\$! ü./0 \$(" +" ĂĀāąČ \$/ -1%.! "1.0\$!. āāāČāĆąČĉăĂ /\$.!/ * *+3 \$/ 0+0( +" āĆāČāĆāČĆąĀ /\$.!/ ĨąċĈ ,!.!*0 +" +10/0* %*# /\$.!/ĩċ (( /\$.!/ \$2! !!* -1%.! %* +,!* ).'!0 0.*/0%+*/ċ

	Quarter		Full year
USD million	Q2 2014	Q2 2013	2013
Non-current
+* /	ĂĂĊċĉ	ĂăĀċĉ	ĂăĀċą
Total non-current interest-bearing liabilities	229.8	230.8	230.4
Current
1!0 ,+.0%+ +" +* /	ġ	ġ	ġ
Total current interest-bearing liabilities	-	-	-
Total interest-bearing liabilities	229.8	230.8	230.4

					Balance
USD million	Currency	Amount	Interest	Maturity	Q2 2014	Q1 2014
Non-current
+ (+ Ĩ ĀĀāĀćĀćāĊĈĩ		ĆćĀċĀ	%+. Ň ĈċĆŃ	āāĥĀąĥĂĀāć	ĊāċĀ	ĊăċĆ
+ (+ Ĩ ĀĀāĀćĀćāĉĊĩ		āąĀċĀ	%+. Ň ĈċĆŃ	āāĥĀąĥĂĀāć	āąĀċĀ	āąĀċĀ
++3%*# %//1! +/0/					ġāċă	ġāċĆ
Total interest-bearing liabilities					229.8	232.0

Note 10 || Provisions for other liabilities and charges

	Quarter	Full year
USD million	Q2 2014	Q2 2013	2013
Non-current
//!0 .!0%.!)!0 +(%#0%+/	āąċĂ	ăċą	ăċć
0\$!. (+#ġ0!.) +(%#0%+/	āĀāċć	ăăċĂ	ĉĊċĆ
Total non-current provisions for other liabilities and charges	115.8	36.6	93.0
Current
0\$!. ,.+2%/%+*/ * \$.#!/	ĈĊċĈ	āăāċă	ĈĊċĈ
Total current provisions for other liabilities and charges	79.7	131.3	79.7
Total provisions for other liabilities and charges	195.5	167.9	172.7

*(1 ! %* ,.+2%/+* "+. +0\$!. (%%(%0%!/ * \$.#!/ %/ ,.+2%/%+* "+. 0\$! 0!. 1.%ü0%+* .+&!0 Ĩĩ %* 0\$! 1. %/0* .!#%+* +" .-ċ \$! 3/ ,%0(%6! %* ĂĀĀĊ * %/ !,.!%0! +2!. 0\$! ,!.%+ +" ,.+ 10%+*ċ \$! (%%(%05 3%(( *+0 ! ,5(! 1*0%( ,5)!*0 )!\$*%/) %/ %* ,(! * ,.+!! / ".+) !4,+.0 /(! .! .!!%2! +* .!#1(. /%/ċ \$! )+*0\$(5 %*/0(()!*0/ .! +*0%*#!*0 +* !ü*! #.+// .!2!*1! (!2!(/ * 3%(( ! "1((5 .!+2!.! 0\$.+1#\$ +/0 +%(ċ \$! (%%(%05 %/ .!+. ! 0 *!0 ,.!/!*0 2(1!Č 3\$!.! 0\$! 1*3%* %*# +" %*0!.!/0 %/ \$.#! 0+ ,.+ü0 +. (+//ċ .0 +" 0\$! (%%(%05 \$/ !!* (//%ü! / /\$+.0ġ0!.) 0 ăĀ 1*! ĂĀāą * %*(1 ! %* +0\$!. ,.+2%/%+*/ * \$.#!/ Ĩ1..!*0ĩċ

.+2%/%+* "+. ,.+ 10%+* +*1/!/ "+. 0\$! 3'! * .%( (%!*/!/ %* 0\$! 1. %/0* .!#%+* +" .- %/ (/+ %*(1 ! %* ,.+2%/%+* "+. +0\$!. (%%(%0%!/ * \$.#!/ċ .+ 10%+* +*1/!/ .!(0! 0+ ,5)!*0/ /! +* %û!.!*0 ,.+ 10%+* (!2!(/ċ

With effect from 1 January 2014, DNO changed its presentation currency from Norwegian kroner (NOK) to US Dollars (USD) for the consolidated
financial statements. The change was made to better reflect the profile of an indu

The tables below show restated condensed financial statements for the DNO group as if the change were effective since 1 January 2005 (IFRS transition):

Consolidated statements of comprehensive income

						Hull year
USD million	Q4 2013	Q3 2013	Q2 2013	Q1 2013	2013	2012
Sales	133.6	135.2	130.9	103.3	503.0	524.5
Cost of goods sold	$-48.4$	$-53.1$	$-57.0$	$-49.9$	$-208.3$	$-208.4$
Gross profit	85.1	82.2	74.0	53.4	294.7	316.1
Other operating income	O.1	O.1	0.1	0.2	O.3	1.7
Tariffs and transportation	$-0.6$	$-1.2$	$-1.5$	$-0.9$	$-4.2$	$-2.7$
Administrative expense/Other operating expenses	$-9.3$	$-10.1$	$-7.2$	$-3.6$	$-30.2$	$-27.0$
Impairment/Reversal of impairment oil and gas assets	$-177.2$	$-5.1$			$-182.3$
Exploration cost expensed	$-3.9$	$-2.0$	$-2.4$	$-1.9$	$-10.3$	$-13.4$
Net gain/-loss from sale of PP&E	$\overline{a}$	$-0.1$	$\overline{a}$	$\overline{\phantom{a}}$	$-0.1$	$-4.8$
Profit/-loss from operations	$-105.7$	63.6	62.9	47.1	67.9	270.0
Financial income	0.2	0.4	1.1	0.9	2.6	2.8
Financial expenses	$-1.4$	$-2.9$	$-3.9$	$-4.1$	$-12.3$	$-24.8$
Profit/-loss before income tax	$-106.9$	61.1	60.1	43.9	58.2	248.0
Income tax expense	8.8	$-14.2$	$-12.1$	$-13.8$	$-31.3$	$-49.9$
Net profit/-loss	$-98.1$	47.0	48.0	30.1	27.0	198.1
Net profit/-loss attributable to:
Equity holders of the parent	$-98.1$	47.0	48.0	30.1	27.0	198.1
Earnings per share	$-0.10$	0.05	0.05	0.03	0.03	0.20

Note 11 || Change of presentation currency continues

Condensed consolidated statements of financial position

USD million	2013	2012
Non-current assets
Goodwill	$\overline{\phantom{a}}$	46.4
Deferred income tax assets	7.7	7.7
Other intangible assets	158.3	130.9
Property, plant and equipment	725.2	698.1
Available for sale investments	10.8	0.4
Other non-current assets	2.4	$\overline{\phantom{a}}$
Total non-current assets	904.4	883.6
Current assets
Inventories	50.8	40.9
Trade and other receivables	114.0	123.7
Cash and cash equivalents	265.9	270.9
Total current assets	430.7	435.6
TOTAL ASSETS	1,335.1	1,319.2
EQUITY AND LIABILITIES USD million	2013	2012
Equity
Share capital	33.6	33.6
Other reserves	174.7	164.2
Retained earnings	550.2	523.2
Total equity	758.5	721.0
Non-current liabilities
Interest-bearing liabilities	230.4	238.0
Deferred income tax liabilities	101.5	140.4
Retirement benefit obligations	0.5	0.5
Provisions for other liabilities and charges	92.5	33.1
Total non-current liabilities	424.9	412.0
Current liabilities
Trade and other payables	56.5	40.0
Income taxes payable	15.5	7.4
Provisions for other liabilities and charges	79.7	138.7
Total current liabilities	151.7	186.2
TOTAL EQUITY AND LIABILITIES	1,335.1	1,319.2

Note 11 || Change of presentation currency continues

Condensed consolidated cash flow statements

					Full year
USD million	Q4 2013	Q3 2013	Q2 2013	Q1 2013	2013
Operating activities
.+ü0ĥġ(+// !"+.! %*+)! 04	ġāĀćċĊ	ćāċā	ćĀċā	ąăċĊ	ĆĉċĂ
Adjustments to add (deduct) non-cash items:
Ňĥġ !0 %0!.!/0 !4,!/! Ĩġ%*+)!ĩ	Āċć	Ăċć	āċć	Ăċă	ĈċĂ
.!2%+1/(5 ,%0(%6! !4,(+.0%+ * !2(10%+ !4,!*/!/	ġ	ġ	ġ	ġ	ġ
!,.!%0%+* +" Ē	Ăăċą	ĂąċĊ	ĂĆċĀ	ĂąċĆ	ĊĈċĉ
),%.)!0 (+//ĥ!2!./( +" %),%.)!0 +* Ē	āĈĈċĂ	Ćċā	ġ	ġ	āĉĂċă
Ĩ%ĩĥ(+// +	ġ	Āċā	ġ	ġ	Āċā
Ĩ%ĩĥ(+// + /\$.!/	ġ	ġ	ġ	ġ	ġ
0\$!.	Ćĉċą	ăċă	ġāċĆ	ġĈċĊ	ĆĂċă
Changes in working capital:
ġ 2!0+.%!/	ġāĂċĉ	ăċĆ	ġāċĉ	āċĂ	ġĊċĊ
ġ . ! * +0\$!. .!!%2(!/	ġĂĀċĉ	ąċĈ	ġĂćċĀ	ąĊċą	Ĉċą
ġ . ! * +0\$!. ,5(!/	ăĆċă	ġĂĂċā	ĊċĂ	ġĆċĉ	āćċĆ
ġ .+2%/%+*/ "+. +0\$!. (%%(%0%!/ * \$.#!/	ġĆăċā	āċą	ġĆċĉ	ġāċć	ġĆĊċā
/\$ #!!.0! ".+) +,!.0%+/	āĀāċă	ĉąċĉ	ćĀċĉ	āĀĆċĉ	ăĆĂċĉ
*+)! 04!/ ,%	ġāąċĉ	ġāćċĈ	ġāąċā	ġāćċĆ	ġćĂċā
*0!.!/0 ,%	ġĆċĀ	ġĆċā	ġĆċĀ	ġĆċĂ	ġĂĀċă
Net cash from operating activities	81.5	63.0	41.7	84.1	270.4
Investing activities
1.\$/!/ +" %0#%(! //!0/	ġąċĊ	ġăċĀ	ġāąċĂ	ġāăċĈ	ġăĆċĊ
.+!! / ".+) /(! +" %0#%(! //!0/	ġ	ġ	ġ	ġ	ġ
1.\$/!/ +" 0*#%(! //!0/	ġćĆċĂ	ġĈĀċĀ	ġćĆċĈ	ġĆāċĆ	ġĂĆĂċĆ
.+!! / ".+) /(! +" 0*#%(! //!0/	ġ	ġ	ġ	ġ	ġ
1.\$/!/ +" 2%((!ġ"+.ġ/(! ü**%( //!0/	ġāĀċĉ	ġ	ġ	ġ	ġāĀċĉ
.+!! / ".+) /(! +" 2%((!ġ"+.ġ/(! ü**%( //!0/	ġ	ġ	ĀċĆ	ġ	ĀċĆ
*0!.!/0 .!!%2!	ĀċĂ	ĀċĂ	Āċā	Āċā	Āċć
0\$!. %2!/0%# 0%2%0%!/	ġ	ġ	ġ	ġ	ġ
Net cash from/-used in investing activities	-80.9	-72.8	-79.3	-65.1	-298.1
Financing activities
!,5)!0 +" ++3%#/	ġ	ġ	ġ	ġ	ġ
1.\$/! +" 0.!/1.5 /\$.!/Č %(1 %# +,0%+*/	ġ	ġ	ġ	ġ	ġ
Net cash from/-used financing activities	-	-	-	-	-
Net increase/-decrease in cash and cash equivalents	0.7	-9.8	-37.6	19.0	-27.7
/\$ * /\$ !-1%2(!0/ 0 !#%%# +" 0\$! ,!.%+	ĂćĂċą	ĂĈăċą	ăĀāċă	ĂĈĀċĊ	ĂĈĀċĊ
4\$#! #%ĥġ(+//!/ + /\$ * /\$ !-1%2(!0/	ăċĀ	ġāċĂ	Ċċĉ	āāċă	ĂĂċĈ
Cash and cash equivalents at end of the period	265.9	262.4	273.4	301.2	265.9

www.dno.no

DNO ASA Bryggegata 9, Aker Brygge N-0250 Oslo Norway

Phone: (+47) 23 23 84 80 Fax: (+47) 23 23 84 81