DNO ASA — Earnings Release 2023

Aug 17, 2023

DNO Opens Taps at Tawke; Reports Second Quarter 2023 Results

DNO Opens Taps at Tawke; Reports Second Quarter 2023 Results

Oslo, 17 August 2023 - DNO ASA, the Norwegian oil and gas operator, today

reported that production from its flagship Tawke field in Kurdistan has been

restarted following a four-month shut-in triggered by the closure of the Iraq-

Turkey Pipeline export route. Production was restarted last month to conduct

well integrity tests and synchronize reservoir models but has continued in

response to strong demand for Tawke oil. Field output is currently averaging

40,000 barrels of oil per day (bopd). The nearby Peshkabir field, on the same

license, remains closed.

One-half of Tawke production is delivered to the Kurdistan Regional Government

and the balance is sold by DNO on behalf of the contractors (DNO 75 percent and

Genel Energy International Limited 25 percent) to local trading companies and

the oil transported by road tanker. Prices vary by contract and average around

50 percent of pre-closure levels but payments now are made promptly and directly

to DNO.

"While there is no light at the end of the export pipeline, we are seeing the

headlights of more and more incoming tanker trucks loading up our Tawke cargoes

on a cash-and-carry basis," said DNO Executive Chairman Bijan Mossavar-Rahmani.

"Meanwhile, our strategy of broadening DNO's portfolio beyond Kurdistan is

bearing beautiful fruit," he added.

A total of 100 million barrels of oil equivalent (MMboe) have been discovered

net to DNO offshore Norway since 2021, of which 78 MMboe have been added so far

this year, driven importantly by DNO's 30 percent stake in Norway's largest

discovery in a decade (Carmen). Previous discoveries are moving towards

development. In June, the development of the Andvare discovery (DNO 32 percent)

and the Berling discovery (DNO 30 percent) received government approvals,

targeting gross volumes of 11 MMboe (start-up in 2024) and 45 MMboe (start-up in

2028), respectively. DNO also recently announced a fast-track development

concept for the Brasse discovery (DNO 50 percent) as a low-cost tieback to Brage

production facilities (DNO 14 percent) with main terms agreed ahead of final

investment decision early next year.

"All barrels of oil or molecules of gas are not created equal," said Mr.

Mossavar-Rahmani. "Our recent discoveries have high net present value as DNO's

offshore Norway drilling campaign is deliberately designed to target lower risk

prospects near existing infrastructure," he added. "We thought such low-risk

prospects would also be small to medium in size, but Carmen happily proved us

wrong."

The Company's Côte d'Ivoire assets, which were acquired last year, deliver

stable production and further upside potential. A gas sales contract

renegotiation with the government is ongoing to raise the price ceiling,

allowing for increased investment in Block CI-27 (DNO nine percent). On nearby

Block CI-12 (DNO eight percent) a rig has been secured for two exploration wells

plus one optional well, to be drilled back-to-back commencing in the fourth

quarter of 2023.

In the second quarter of 2023, net production across DNO's portfolio hit the

lowest level in 13 years at 14,400 barrels of oil equivalent per day (boepd), of

which the North Sea contributed 10,800 boepd, West Africa 3,500 boepd and

Kurdistan the balance. Driven by the Kurdistan export closure and a significant

North Sea production cut from a shutdown of third-party facilities that has now

ended, DNO reported a 78 percent quarter-on-quarter revenue drop to USD 58

million. Net loss amounted to USD 19 million, down from a net profit of USD 87

million in the previous quarter.

The balance sheet remains strong with an unchanged equity ratio of 50 percent as

the Company exited the quarter with cash deposits of USD 743 million and net

cash of USD 177 million. Given uncertain timing of pipeline export resumption

and continued delays in payments by the Kurdistan Regional Government for

previous oil sales, DNO has cut back new investment spend and staffing levels.

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

be made on or about 1 September 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

Q2 2023 Q1 2023 Full-Year 2022

Gross operated production (boepd) 65 94,720 107,637

Net production (boepd) 14,417 89,399 97,310

Revenues (USD million) 58 269 1,377

Operating profit/-loss (USD million) -15 155 431

Net profit/-loss (USD million) -19 87 385

Free cash flow (USD million) -144 35 619

Net cash/-debt (USD million) 177 344 388

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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.