DNO ASA — Earnings Release 2019

Jan 14, 2020

DNO Operations Update: 2019 Production Climbs 29 Percent on the Back of Acquisitions, Record Drilling

DNO Operations Update: 2019 Production Climbs 29 Percent on the Back of Acquisitions, Record Drilling

Oslo, 14 January 2020 - DNO ASA, the Norwegian oil and gas operator, today

announced a 29 percent year-on-year increase in its net Company Working Interest

(CWI) production in 2019 to 104,800 barrels of oil equivalent per day (boepd) on

the back of acquisitions and a record drilling campaign.

In the Kurdistan region of Iraq, production from the two fields in the Tawke

license climbed from 113,100 barrels of oil per day (bopd) in 2018 (79,700 bopd

CWI) to 124,000 bopd in 2019 (87,400 bopd CWI). Production of 122,800 bopd in

the fourth quarter of 2019 was up 3,000 bopd from the previous quarter. The

Company is operator of the Tawke license with a 75 percent interest.

With the acquisition of Faroe Petroleum plc, which gave the Company a foothold

offshore Norway and the United Kingdom, production from the North Sea added

another 17,400 boepd in 2019 (19,000 boepd in the fourth quarter was up from

14,900 boepd in the previous quarter). DNO currently holds 87 licenses in Norway

and 15 in the United Kingdom, The Netherlands and Ireland; of these 28 are on

production (13 fields) and the balance in various stages of evaluation,

exploration and development.

Last year, the Company delivered the largest annual drilling program in its 48-

year history with 36 wells drilled or spudded across its portfolio, including

24 development/infill and 12 exploration/appraisal wells. The level of drilling

activity is expected to remain high in 2020.

At Tawke, 2019 production stood at 68,800 bopd, with wells drilled last year

contributing 13 percent of field production at yearend. At Peshkabir, 2019

production stood at 55,200 bopd, with wells drilled in 2019 contributing 40

percent of field production at yearend.

"Even though Tawke is now a mature field, we are continuously finding ways to

slow its decline while teasing additional production from the newer Peshkabir

field, all the while probing for other opportunities in Kurdistan," said DNO's

Executive Chairman Bijan Mossavar-Rahmani.

Elsewhere in Kurdistan, DNO reported a discovery in the Baeshiqa-2 exploration

well last November after flowing variable rates of light oil and sour gas to

surface from the upper part of Triassic Kurra Chine B reservoir following acid

stimulation. Further testing of this and several other Jurassic and Triassic

zones will determine the next steps towards appraisal and assessment of

commerciality. DNO holds a 32 percent interest and operatorship of the Baeshiqa

license.

Meanwhile, the Peshkabir-to-Tawke gas injection project designed to increase oil

recovery rates at Tawke while eliminating flaring at Peshkabir will be completed

in March 2020. Once completed, CO(2) emissions from DNO's operated fields will

average 7 kilograms per barrel of oil equivalent (boe) produced, compared to an

average of 9 kilograms per boe on the Norwegian Continental Shelf and a global

average of 18 kilograms per boe.

DNO retained a strong cash balance of USD 480 million at yearend 2019 plus USD

144 million in marketable securities. Following a delay in export payments last

month from the Kurdistan Regional Government to oil operators, DNO has since

yearend received payment for its August oil sales totaling USD 52 million net to

the Company.

The Company has drawn on its cash balances to buy back outstanding bonds and to

return money to shareholders through a combination of share buybacks and

dividend distributions.

During 2019, DNO bought back USD 64.6 million in nominal value of FAPE01 bonds

originally issued by Faroe Petroleum. The bonds were purchased at a weighted

average price of 107.41. Following the buybacks and USD 14.2 million in

cancellations due to put option exercises, USD 21.2 million in nominal value of

the FAPE01 bonds remain outstanding.

In August 2018, DNO announced its first dividend distribution to shareholders in

13 years. Since then, DNO has paid three semi-annual dividends of NOK 0.20 per

share (total dividend distribution to date of NOK 620.5 million or USD 72

million). The next semi-annual distribution is expected to be made in the spring

following approval by the Board of Directors.

At the 2019 Annual General Meeting shareholders authorized a share buyback

program which was completed on 10 January 2020 and increased the number of own

shares held by the Company from 35 million to 108,381,415 shares to reach the

total authorized level of 10 percent. Altogether DNO has spent NOK 1.15 billion

(USD 129 million) on this share buyback program since 2015. The weighted average

price for the 10 percent own shares acquired by the Company is NOK 10.61 per

share.

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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.