DNO ASA — Earnings Release 2020

Jul 30, 2020

DNO Steps Up Activity; Releases Second Quarter 2020 Results

DNO Steps Up Activity; Releases Second Quarter 2020 Results

Oslo, 30 July 2020 - DNO ASA, the Norwegian oil and gas operator, today reported

stepped up investments across its portfolio on the back of higher production and

significantly improved liquidity outlook as the Company recovers from the oil

market turmoil that upended the second quarter of 2020.

Operated production in July at the Company's flagship Tawke license in the

Kurdistan region of Iraq is up 15,000 barrels of oil per day (bopd) month-on-

month to 115,000 bopd following a well intervention campaign fast tracked in

June with the stabilization of oil prices and improved export payment terms. In

the North Sea segment, DNO projects receipt of USD 215 million in tax refunds in

the second half of the year, including USD 70 million from the recently

announced temporary changes to petroleum taxation in Norway.

"The worst of the coronavirus pandemic hit to our business is behind us and DNO

is back identifying and capturing opportunities," said Bijan Mossavar-Rahmani,

DNO's Executive Chairman. "Still, we are prepared to act quickly, as we did in

March, if a strong second wave comes," he added.

Second quarter Company Working Interest (CWI) production stood at 89,700 barrels

of oil equivalent per day (boepd) of which Kurdistan contributed 71,900 bopd and

the North Sea 17,800 boepd.

Gross operated Tawke license production averaged 102,000 bopd, including 58,100

bopd from the Tawke field and 43,900 bopd from the Peshkabir field, together

down 11 percent from the first quarter as development activity dropped off to

preserve cash at a time of historically low and uncertain oil prices.

Second quarter revenues slid to USD 72 million and operating losses climbed to

USD 81 million, both driven by weak commodity prices across the portfolio and

lower cargo liftings of produced oil in the North Sea.

At the Baeshiqa license in Kurdistan, DNO continued drilling the third

exploration well on a second structure (Zartik) some 15 kilometers southeast of

the Baeshiqa-2 discovery well. The rig has been released and testing will

commence in August in Lower Jurassic and Upper Triassic zones intersected by the

well and expected to last three months. Evaluation of the Baeshiqa-2 results is

ongoing to determine commerciality.

During the first half of 2020 DNO received a total of USD 224 million in

payments from the Kurdistan Regional Government. In addition, the Company

received a USD 23 million June entitlement payment after the end of the

reporting period. Discussions are ongoing to reach an agreement on acceptable

terms and timing of payment of arrears totaling USD 240 million due to DNO for

the November 2019-February 2020 entitlements and November 2019-June 2020

override payments. Notwithstanding the interruption of these payments and DNO's

repayment of the remaining USD 138.5 million of the DNO01 bond at maturity on

18 June 2020, the Company exited the first half of 2020 with a strong cash

balance of USD 427 million. Net debt at the end of the second quarter stood at

USD 537 million, down from USD 559 million at the end of the first quarter.

Last month, DNO commissioned the Peshkabir-to-Tawke gas reinjection project, the

first enhanced oil recovery project in Kurdistan, to unlock additional oil

volumes at Tawke while significantly reducing gas flaring and CO(2 )discharges

at Peshkabir.

Prompted by the tax changes in Norway, the Company is working with partners to

accelerate infill drilling at the Ula, Tambar and Brage producing fields,

revisit development options for the Brasse field and actively evaluate the

Iris/Hades, Fogelberg and Trym South discoveries.

DNO will remain an active explorer in the North Sea, targeting 4-6 wildcat wells

a year.

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For further information, please contact:

Media: media@dno.no

Investors: investor.relations@dno.no

Tel: +47 23 23 84 80

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

Kingdom, Netherlands, Ireland and Yemen.

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.