DNO ASA — Interim / Quarterly Report 2020

May 7, 2020

DNO Reports 35 Percent Cut in 2020 Spend, Bolstering Cash Position

DNO Reports 35 Percent Cut in 2020 Spend, Bolstering Cash Position

Oslo, 7 May 2020 - DNO ASA, the Norwegian oil and gas operator, today reported

that it had identified and implemented 2020 budget cuts of USD 350 million or

35 percent across all spend categories as the Company moved early and quickly to

protect its personnel and operations and preserve its cash position in response

to the the devastating impact of the coronavirus pandemic. The Company exited

the first quarter of 2020 with a cash balance of USD 543 million, up from USD

486 million at yearend 2019.

In releasing its interim first quarter results, DNO reported revenues of USD

206 million largely driven by lower oil prices and a net loss of USD 40 million

on the back of impairments of its North Sea assets, again driven by lower oil

prices. Notwithstanding the turmoil in the oil industry, DNO delivered strong

operational metrics with production split 80:20 between the Kurdistan region of

Iraq and the North Sea.

DNO's Company Working Interest (CWI) production averaged 99,857 barrels of oil

equivalent per day (boepd) in the quarter, of which Kurdistan contributed

81,221 barrels of oil per day (bopd) and the North Sea 18,636 boepd.  Gross

production at the DNO-operated Tawke and Peshkabir fields averaged 61,493

barrels and 53,714 bopd, respectively, as DNO hit the brakes on spending.  After

completing five development wells in the license during the quarter, DNO

released four drilling rigs in Kurdistan but continues to utilize the Company-

operated workover rig to service production wells, some of which have been shut

in given current oil prices and payment delays. A drilling rig has been cold

stacked at each field and can quickly be mobilized if conditions warrant.

The Company has had recent successes with the drill bit. In the North Sea, the

Bergknapp exploration well (DNO 30 percent) discovered hydrocarbons in multiple

formations of poor to good reservoir quality with recoverable resources ranging

26-97 million barrels of oil equivalent (MMboe); the near-field discovery is

Norway's largest to date in 2020 and with high probability of commerciality.

In Kurdistan, the Company has reported a discovery in its operated Baeshiqa-2

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

surface from three Triassic aged reservoirs. Evaluation of test results will

determine next steps towards further appraisal and assessment of commerciality.

Additionally, a third well on the license will spud mid-month, with its primary

target a shallower Jurassic formation on a separate structure (Zartik).

Meanwhile, the Peshkabir-to-Tawke gas capture, transport and reinjection project

to effectively end CO(2 )emissions at Peshkabir (and therefore in DNO's

Kurdistan operations) and boost oil recovery at Tawke is completed and

undergoing commissioning.

To achieve budget reductions, DNO has deferred most discretionary drilling and

capital projects across the portfolio and continues to identify and capture cost

savings. In the United Kingdom, no drilling is planned and the balance of the

Schooner and Ketch decommissioning program has been suspended and deferred to

2021/2022. The Company has renegotiated service contracts for savings and

extended payment terms where it operates, and is in continuous discussions with

partners in the North Sea to reduce operating and other costs and defer non-

critical projects where it does not operate. DNO's 2020 North Sea drilling

campaign has been scaled back and wells deferred, but firm plans remain in place

for wells in five licenses over the balance of the year, including two

exploration, one appraisal, two infill and two development/geopilot wells.

To further strengthen its cash position, the Company has also drawn USD 115

million from its reserve-based lending facility to fund North Sea operations and

has suspended its dividend program.

Last month, DNO received USD 90 million for Kurdistan oil exports, not included

in the end of first quarter cash balances. Entitlement and override payments for

November 2019 through February 2020 (total USD 233 million) remain outstanding,

which the Kurdistan Regional Government has proposed to defer together with

override payments commencing March 2020, given the deterioration of its own

fiscal position with the collapse in oil prices. DNO is following up to agree

acceptable terms for such deferment and also timing of payments of the sums in

arrears.

"One of the first to hit the brakes, DNO is positioned to be one of the first to

press down on the accelerator with signs of sustained market recovery, notably

through short-cycle drilling in Kurdistan," said Bijan Mossavar-Rahmani, DNO's

Executive Chairman. "Lifting costs below USD 5 per barrel in Kurdistan give DNO

competitive advantage when oil prices are weak and strong cash flow when oil

prices recover," he added.

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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 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.