DNO ASA — Earnings Release 2016

Feb 9, 2017

DNO ASA Reports 2016 Interim Results and Annual Statement of Reserves; Announces Stepped Up Drilling Campaign in Kurdistan and Oman

DNO ASA Reports 2016 Interim Results and Annual Statement of Reserves; Announces Stepped Up Drilling Campaign in Kurdistan and Oman

Oslo, 9 February 2017 - DNO ASA, the Norwegian oil and gas operator, today

announced a stepped up drilling campaign in the Kurdistan region of Iraq and the

Sultanate of Oman on the back of 2016 operating profits and improved payments

for exports from its flagship Tawke field in Kurdistan. The Company also

released its annual reserves report which showed an increase in combined proven

and probable reserves (2P) and contingent resources (2C) following the new oil

discovery at the Peshkabir field in Kurdistan.

DNO reported interim 2016 operating profits of USD 6 million, reversing an

operating loss of USD 174 million in 2015. Following two years of cost cutting

and asset rationalization, the Company is restarting investments to replenish

its oil and gas reserves and restore production across its portfolio.

Planned 2017 capital investments are estimated at USD 100 million, and include

four new production wells at Tawke. Elsewhere in Kurdistan, the Company plans to

drill a third well at Peshkabir and an appraisal/production well at the Benenan

field in the Erbil license. In Oman, two wells will be brought back onstream at

Block 8 offshore with plans to nearly double output at the West Bukha and Bukha

fields.

The Company is considering three additional wells at Tawke to raise production

above current levels of around 115,000 barrels of oil per day (bopd) contingent

on regular and predictable export payments from the Kurdistan Regional

Government.

During 2016, DNO received ten payments totaling USD 210 million net to the

Company for Tawke exports and outstanding receivables. Three additional payments

totaling USD 59 million net to DNO have been received to date in the first

quarter.

"These payments create momentum as we move into 2017," said DNO's Executive

Chairman Bijan Mossavar-Rahmani.

Early production from Peshkabir and transport of oil to the Company's gathering,

processing and export facilities at Fish Khabur 12 kilometers away is under

assessment.

"The Peshkabir field positions us for production and reserves growth in our

Kurdistan portfolio," said Mr. Mossavar-Rahmani, indicating that the Cretaceous

discovery added 47.9 million barrels of oil equivalent (MMboe) of gross 2C

resources.

As of 31 December 2016, DNO's Company Working Interest (CWI) 2P reserves and 2C

resources were estimated at 529.6 MMboe, up from 523.1 MMboe at year-end 2015.

CWI 2P reserves were estimated at 368.3 MMboe, down from 391.5 MMboe at year-end

2015 after adjusting for CWI production of 25.3 MMboe during the year and a

positive technical revision of 2.1 MMboe. CWI 2C resources were estimated at

161.3 MMboe, up from 131.6 MMboe at year-end 2015.

At Tawke, 2P reserves and 2C resources stood at 604.0 million barrels (MMbbls)

at year-end 2016, down from 643.2 MMbbls at year-end 2015. Gross proven (1P)

reserves stood at 347.7 MMbbls, down from 387.0 MMbbls at year-end 2015. Gross

2P reserves stood at 503.8 MMbbls, down from 543.0 MMbbls at year-end 2015. The

reduction in each category reflected total production of 39.3 MMbbls from the

field during the year.

International petroleum consultants DeGolyer and MacNaughton carried out the

annual independent assessment of the Tawke field. DNO internally evaluated the

remaining assets.

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DNO ASA presents its 2016 interim results in Oslo at 10:00 CET today. A live

webcast of the presentation and the 2016 Annual Statement of Reserves will be

available on the Company website (www.dno.no).

For further information, please contact:

Media: media@dno.no

Investors: investor.relations@dno.no

Tel: +47 911 57 197

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DNO ASA is a Norwegian oil and gas operator focused on the Middle East and North

Africa. Founded in 1971 and listed on the Oslo Stock Exchange, the Company holds

stakes in onshore and offshore licenses at various stages of exploration,

development and production in the Kurdistan region of Iraq, Yemen, Oman, Tunisia

and Somaliland.

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This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.