DNO ASA — Investor Presentation 2016

May 4, 2016

Corporate overview and operational highlights

Corporate overview

• On track to profitability in 2016
• Financial performance bolstered by higher oil prices and seven consecutive monthly payments for oil produced in Kurdistan, the last three in line with contractual entitlements
• Normalization of payments has led to stepped up investments at the Tawke field, with production to continue to climb in 2016 following drilling of five new production wells and workover of ten existing ones
• Among three key foreign operators in Kurdistan, DNO solidifies lead as first in oil production (50 percent), oil exports (60 percent) and proven oil reserves (50 percent)
• Tawke proven oil reserves increased 21 percent last year to 387 million barrels on improved confidence about primary recovery, though probable reserves declined with partial re-categorization to contingent resources
• Continue to rationalize company portfolio to focus on core assets while evaluating growth opportunities, including new country entries

Q1 2016 operational highlights

• Total DNO operated production in Q1 2016 of 97,000 barrels of oil equivalent per day (boepd)
• Of which Tawke represented 91,700 bopd (87,200 bopd delivered for pipeline export through Turkey)
• Kurdistan production impacted by extended closure of the Turkish portion of export pipeline during second half of February and first half of March
• Once normal pipeline operations restored and following successful completion of first set of well workovers at the field, Tawke production climbed to 118,900 bopd in April (117,800 bopd delivered for export)
• Oman production averaged 5,300 boepd during Q1 2016

Q1 2016 financial highlights

• Q1 revenues of USD 50 million, of which Kurdistan share was USD 47 million
• Fourth consecutive quarter in which DNO revenues totaled USD 50 million or higher
• Planned capital investments totaling USD 100 million in 2016 funded by cash from operations
• Continue to strengthen our balance sheet
• Exited Q1 with cash balance of USD 262 million, up from USD 238 million at end-2015

Kurdistan's improving payment situation

• Since September 2015, seven monthly payments received from Kurdistan totaling USD 175 million, of which USD 128 million net to DNO
• In Q1, three payments totaling USD 65 million (USD 48 million net to DNO) received for Tawke deliveries to the domestic and export markets
• New 2016 payment arrangement based on contractual entitlements provides regularity and predictability of payments and incentivizes companies to make new investments
• Higher oil prices boost DNO monthly entitlement revenues and also improve Kurdistan's ability to pay companies
• Payments received during Q1 reduced booked receivable for DNO's share of past Tawke deliveries to the domestic market by USD 2 million; at current production, oil price and repayment terms booked receivables will drop USD 10 million a quarter
• Agreed with Kurdistan to verify all DNO receivables through a joint audit ahead of discussions to set payment terms, modality and schedule

Planned Tawke investments in 2016

• Foot back on the accelerator in Kurdistan
• At Tawke license, one rig currently active with plans to add two more by mid-year
• Completed workovers of three wells in Q1 reversing declines and adding 10,000 bopd in incremental production in 30 days and at a cost of USD 1.5 million; 10,000 bopd at current oil prices adds USD 10 million to Tawke monthly export revenues
• Five well workovers planned in Q2 and another two in Q4
• Tawke 2016 drilling program includes five new production wells, including three Cretaceous and two Jeribe, as well as one water disposal well
• New investments expected to increase production from 120,000 bopd currently to 135,000 bopd

Other drilling activity

• In Kurdistan, planning Q3 spud of Peshkabir-2 well to appraise Jurassic discovery and explore Cretaceous horizon
• Drilling to be completed by year-end and if successful, Peshkabir field to be quickly brought on production using existing infrastructure
• In Oman, drilling of Hayah-1 exploration well at Block 36 progressing and expected to reach target depth of 2,700 meters by end-May
• Located in prolific Rub al-Khali basin in southwestern Oman bordering Saudi Arabia and Yemen, with license covering surface area of more than 18,000 square kilometers

Financial review

DNO financial results – key figures

• Stable quarterly revenues at USD 50 million or higher during four consecutive quarters
• Steady netback cash flow over last three quarters

Financial summary

USD million	Q1 2016	Q4 2015	Q1 2015	2015
Sales	49.6	54.5	26.0	187.4
Cost of goods sold	-30.7	-26.7	-61.8	-197.0
Gross profit	18.9	27.9	-35.8	-9.5
Expensed exploration	-3.5	-4.1	7.0	-23.5
Administrative expenses	-6.8	-6.2	-4.3	-19.0
Other operating expenses	-0.6	-19.2	-22.9	-29.0
Impairment of oil and gas assets	-	-79.7	-13.2	-92.9
Profit/loss from operating activities	8.0	-81.3	-69.2	-174.0
Net finance	-12.2	-27.7	-3.9	-62.5
Profit/loss before income tax	-4.3	-109.0	-73.2	-236.5
Income tax expense	-0.7	25.8	-1.0	24.1
Net profit/loss	-4.9	-83.3	-74.2	-212.4

• Q1 cost of goods sold down year-on-year due to significant reduction in lifting costs
• Depreciation method for Tawke PSC changed from 2P to 1P reserves from 1 January 2016
• Reduction in DNO net Tawke booked receivable by USD 2 million during Q1

Investment program

Capex and capitalized exploration USD million

Kurdistan Oman Yemen UAE Tunisia Other

• Capex spending in Q1 of USD 5.6 million split between Tawke and Block 36 exploration well

• Additional USD 3.5 million exploration expensed, primarily from Tunisia activity
• Planned capital investments totaling USD 100 million in 2016, mainly on stepped up drilling in Kurdistan

Q1 2016 cash flow

• Solid Q1 operational cash flow of USD 31.7 million
• Trade and other payables reduced by USD 3.3 million in Q1
• Tawke local sales receivable reduced to USD 117.3 million

Capital structure

Equity ratio Percent

• Solid balance sheet with low leverage
• Increase in cash reduces net interest bearing debt to USD 138 million
• Increase in financial asset value to USD 20 million

This presentation (the "Presentation") has been prepared and delivered by DNO ASA ("DNO" or the "Company"). Copyright of all published material including photographs, drawings and images in this document remains vested in DNO and third party contributors as appropriate. Accordingly, neither the whole nor any part of this document shall be reproduced in any form nor used in any manner without express prior permission and applicable acknowledgements. No trademark, copyright or other notice shall be altered or removed from any reproduction.

The Presentation contains certain forward-looking statements relating to the business, financial performance and results of the Company and/or industry and markets in which it operates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words "believes", "expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. Any forward-looking statements and other information contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources are solely opinions and forecasts based on the current expectations, estimates and projections of the Company or assumptions based on information currently available to the Company, which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development.

Although the Company believes that its expectations and the Presentation are based upon reasonable assumptions, neither the Company, nor any of its subsidiary undertakings or any such person's officers or employees provides any assurance that the assumptions underlying such forward-looking information and statements are free from errors nor does any of them accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the actual occurrence of the forecasted developments. The Company assumes no obligation, except as required by law, to update any forwardlooking statements or to conform these forward-looking statements to our actual results.

Any investment involves risks, and several factors could cause the actual results, performance or achievements of the Company as described herein to be materially different from any future results, performance or achievements that may be expressed or implied by statements and information in this Presentation, including, among others, risks or uncertainties associated with the Company's business, segments, development, growth management, financing, market acceptance and relations with customers. More generally an investment will involve risks related to general economic and business conditions, changes in domestic and foreign laws and regulations, taxes, changes in competition and pricing environments, fluctuations in currency exchange rates and interest rates and other factors. Should one or more of such risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this Presentation.

DNO is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither DNO nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use.

The Presentation speaks and reflects prevailing conditions and views as of 4 May 2016. It may be subject to corrections and change at any time without notice except as required by law. The delivery of this Presentation - or any further discussions of the Company with any recipient - shall not, under any circumstances, create any implication that the Company assumes any obligation to update or correct the information herein, nor any implication that there has been no change in the affairs of the Company since such date.