DNO ASA — Earnings Release 2017

Feb 8, 2018

DNO Ramping Up Kurdistan Investments; Reports Strong 2017 Results

DNO Ramping Up Kurdistan Investments; Reports Strong 2017 Results

Oslo, 8 February 2018 - DNO ASA, the Norwegian oil and gas operator, today

announced a 50 percent hike in 2018 spending in the Kurdistan region of Iraq to

USD 250 million net to the Company on the back of higher revenues and regular

export payments. Annual 2017 revenues stood at USD 347 million, up 72 percent

from 2016, bolstered by fourth quarter revenues of USD 116 million, the highest

quarterly level in more than three years.

The Company fast tracked the development of the Peshkabir field with two wells

currently producing a total of 16,000 barrels of oil per day (bopd) and

commingled for export with another 97,000 bopd from the other DNO-operated

field, Tawke, on the same license.

"We made the Peshkabir Cretaceous discovery early in 2017, initiated early

production in June, tripled output by year's end and already have exported two

million barrels with an estimated value of USD 100 million - more than twice the

investment to date," said DNO's Executive Chairman Bijan Mossavar-Rahmani. "And

we have only started to appraise and develop this field which continues to

surprise to the upside," he added.

A total of six Peshkabir wells will be drilled this year with field production

expected to reach 30,000 bopd by summer and continue to ramp up in the second

half of the year.

At the Tawke field, plans are being finalized with partner Genel Energy plc to

drill four wells in 2018, in addition to the currently drilling Tawke-48 well

slated for completion by end-February.

Elsewhere in Kurdistan, DNO has re-entered and sidetracked the Hawler-1 well to

appraise the Benenan heavy oil field in the Erbil license, achieving a technical

milestone with the first ever multilateral well and the first ever dual

completion in Kurdistan. Testing will commence shortly, and if successful, will

be followed by additional wells.

The Company received 12 monthly Kurdistan export payments during 2017 totaling

USD 380 million net to DNO. The landmark August 2017 receivables settlement

agreement, which increased DNO's stake in the Tawke and Peshkabir fields from

55 percent to 75 percent plus three percent of gross license revenues over five

years, contributed to higher export payments.

Operational cash flow more than tripled to USD 339 million in 2017 and DNO

exited the year with a net cash position of USD 30 million versus net debt of

USD 139 million at end-2016.

--

For further information, please contact:

Media: media@dno.no

Investors: investor.relations@dno.no

Tel: +47 911 57 197

--

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

Africa region and the North Sea. 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, Norway, Oman, Somaliland, Tunisia, Yemen and the United Kingdom.

--

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.