DNO ASA — Earnings Release 2023

Nov 9, 2023

DNO Reports Spike in Third Quarter Production and Revenues

DNO Reports Spike in Third Quarter Production and Revenues

Oslo, 9 November 2023 - DNO ASA, the Norwegian oil and gas operator, today

reported third quarter revenue of USD 141 million, up 142 percent from the

previous quarter, on higher sales of oil and gas across its portfolio. Net

quarterly production totaled 37,200 barrels of oil equivalent per day (boepd),

up 158 percent, with Kurdistan contributing 19,500 boepd, North Sea 14,300 boepd

and West Africa the balance. Operating profit stood at USD 40 million, reversing

a loss of USD 15 million in the second quarter. Net loss of USD 55 million was

driven by an accounting adjustment of USD 45 million in the book value of the

Kurdistan Regional Government (KRG) arrears.

Following closure of the Iraq-Türkiye Pipeline last March, the Company gradually

reopened the Tawke and Peshkabir fields (DNO 75 percent and Genel Energy

International Ltd 25 percent) and stepped up deliveries to local trading

companies in Kurdistan. Production continues to increase; so far in the fourth

quarter output is averaging double the level of the third quarter.

The DNO-Genel contractual entitlement, currently around one-half of volumes

produced, is sold at prices that vary narrowly in the mid USD 30s per barrel,

and payments are made in advance before any oil is delivered.

DNO has over the last 12 months recovered around USD 15 million, including USD

8 million in October, of the accumulated KRG debt to DNO for previous oil sales

in 2022 and 2023 (in excess of USD 300 million).

"As the Middle East becomes more challenging, we continue to build up our North

Sea portfolio," said DNO Executive Chairman Bijan Mossavar-Rahmani. 'Even as we

demonstrate the resilience of DNO's business model in Kurdistan by reducing

costs and stepping up local sales, we create value in the North Sea through

exploration", he added. "It is quite a balancing act across different geographic

and geopolitical landscapes and not many of our peers can pull it off."

Offshore Norway, DNO participated last quarter in the Carmen discovery (30

percent), the country's largest in a decade, and in the DNO-operated Norma well

(30 percent interest), a play-opening discovery located near existing

infrastructure 20 kilometers northwest of the Balder hub and 30 kilometers south

of the Alvheim hub. To date this year, the Company has participated in

discoveries totaling 100 million barrels of oil equivalent net to DNO.

At the earlier discoveries, Ofelia (DNO 10 percent) and Bergknapp (DNO 30

percent), drilling of appraisal wells are currently ongoing, with coring and

logging operations underway at both wells.

Last week, the UK government's North Sea Transition Authority awarded 27 new

licences in the 33rd Offshore Licensing Round in areas prioritised because of

the potential to be brought into production more quickly than other assets. DNO

announced has been awarded a 50 percent operated interest in Blocks

9/9f, 9/10c, 9/14c and 9/15d. Aker BP UK Ltd will hold the remaining 50 percent

in the licensed area, adjacent to the Norwegian border and just west of the Aker

BP operated Alvheim hub on the Norwegian Continental Shelf.

Meanwhile, according to a recent statement by the Prime Minister of Iraq,

Baghdad and Ankara are prepared to recommence flows from Kurdistan as soon as

certain unspecified agreements between the international oil companies and Iraq

and Erbil are reached. In response, the Association of the Petroleum Industry of

Kurdistan (APIKUR), of which DNO is one of six members, has stated that the

member companies will not be in a position to produce oil for pipeline exports

until it is clear how they will be paid for their contractual entitlements of

oil already sold and delivered for export and for future sales of such oil for

export. APIKUR members are owed nearly USD 1 billion in overdue and unpaid

arrears.

Projected total 2023 operational spend across the Company is reduced by USD 40

million to USD 550 million, of which USD 418 million (76 percent) have been

incurred as of end Q3 2023. The reduction is largely due to stronger USD/NOK

exchange rate impacting NOK denominated spending in the North Sea and further

reductions in ongoing costs in Kurdistan. All operational spend in Kurdistan was

covered by revenue from local sales in Q3 2023, plus USD 20 million towards

DNO's own arrears to contractors and services companies for previously incurred

expenditures pursuant to an earlier agreed monthly payment plan. As of the end

of the quarter, USD 20 million remained to be paid.

The balance sheet remains strong with an equity ratio of 48 percent as the

Company exited the quarter with cash deposits of USD 708 million and net cash of

USD 142 million.

The Board of Directors has authorized dividend payment of NOK 0.25 per share to

be made on or about 24 November 2023, maintaining the Company's quarterly

distribution program.

A videoconference call with executive management will follow today at 10:00

(CET). Please visit www.dno.no to access the call.

Key figures

Q3 2023 Q2 2023 Full-Year 2022

Gross operated production (boepd) 25,984 65 107,637

Net production (boepd) 37,150 14,417 97,310

Revenues (USD million) 141 58 1,377

Operating profit/-loss (USD million) 40 -15 431

Net profit/-loss (USD million) -55 -19 385

Free cash flow (USD million) -6 -144 619

Net cash/-debt (USD million) 142 177 388

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For further information, please contact:

Media: media@dno.no

Investors: investor.relations@dno.no

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DNO ASA is a Norwegian oil and gas operator active in the Middle East, the North

Sea and West 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, Norway,

the United Kingdom, Côte d'Ivoire, Netherlands and Yemen.

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.