DNO ASA — Investor Presentation 2017

Nov 9, 2017

Third Quarter 2017 Interim results presentation

Corporate overview and operational highlights

Corporate overview – Q3 2017 and year-to-date

• DNO's operations and investment activity in Kurdistan region of Iraq continue uninterrupted
• Company is most active driller in Kurdistan with three rigs deployed and 15 wells in 2017 across three operated fields in various stages of production, development and appraisal
• Received Kurdistan export payments net to DNO totaling USD 297 million year-to-date 2017 (of which USD 264 million through Q3 2017), up from USD 210 million during full-year 2016
• With continuing export payments, will step up investments at Tawke and Peshkabir in 2018
• Recent Kurdistan receivables settlement raises DNO's Tawke license stake to 75 percent
• Strengthening balance sheet and increasing Company's equity ratio to 60 percent at end-Q3 2017

Q3 2017 operational highlights

• Of operated production of 115,200 barrels of oil equivalent per day (boepd) in Q3 2017, Kurdistan represented 110,500 barrels of oil per day (bopd) and Oman 4,700 boepd
• Company Working Interest (CWI) production averaged 74,800 boepd during Q3 2017
• Completed drilling of Peshkabir-3 well, now undergoing extended production testing
• Hawler-1A multilateral well appraising Benenan heavy oil field in Kurdistan's Erbil license
• In Tunisia, exploration well at Sfax Offshore Exploration Permit scheduled in first half of 2018
• Val d'Isere prospect on UK Continental Shelf to be spud by operator Apache by end-2017

Q3 2017 financial highlights

• Revenues of USD 73 million in Q3 2017
• USD 556 million recognized as other income in Q3 2017 following Kurdistan receivables settlement
• Resulting in operating profit of USD 469 million in Q3 2017
• Exited Q3 2017 with cash balance of USD 399 million (USD 261 million at year-end 2016) and USD 68 million in treasury shares and marketable securities (USD 22 million at year-end 2016)
• Forecast 2017 capex of USD 130 million, of which USD 102 million spent through Q3 2017

Kurdistan receivables settlement

• Receivables settlement agreed with Kurdistan Regional Government in August 2017 covering past unpaid exports
• Following which DNO was assigned Government's 20 percent interest in Tawke license, raising Company's stake to 75 percent
• DNO also to receive three percent of gross license revenues each month over five-year period
• Released from USD 175 million in payment obligations and other liabilities
• Company's equity increased by USD 556 million, resulting in equity ratio of 60 percent at end-Q3 2017 (up from 35 percent at end-Q2 2017)

Peshkabir update

• Peshkabir-3 well drilled and undergoing extended production tests across horizontal section of more than 1.2 kilometers of Cretaceous and Jurassic reservoir
• First oil zone at toe of well flowed more than 3,000 bopd on a 64-inch choke
• Nine other oil zones and one gas zone identified for testing
• Previously drilled Peshkabir-2 well continues to produce at steady rate of 4,700 bopd from one of four production zones
• Installing early production facility at field for start-up by year-end

North Sea activity

• DNO holds stakes in 11 exploration and appraisal licenses, of which seven on Norwegian Continental Shelf (NCS) and four on UK Continental Shelf (UKCS)
• Actively pursuing additional NCS stakes, including producing assets
• Applied for Norway's Awards in Predefined Areas (APA) licensing round in September
• Targeting participation in five exploration wells per year
• Val d'Isere prospect on UKCS (22.5 percent working interest) to be spud by end-2017 by operator Apache at cost of USD 12 million net to DNO

Financial review

DNO financial results – key figures

• Revenues through Q3 2017 stood at USD 231 million, up from USD 202 million during full-year 2016
• Kurdistan receivables settlement reflected in Q3 2017 operating profit of USD 469 million

Financial summary

USD million	Q3 2017	Q2 2017	Q3 2016	YTD 2017	YTD 2016
Revenue	73.0	81.7	48.8	231.3	159.6
Cost of goods sold	-79.4	-35.7	-29.1	-145.1	-91.8
Gross profit	-6.4	45.9	19.8	86.2	67.9
Expensed exploration	-5.9	-1.5	0.6	-8.9	-19.0
Administrative expenses	-12.0	-6.9	-6.9	-23.9	-21.6
Other operating income/expenses	553.7	-1.6	-2.3	548.9	2.1
Impairment of oil and gas assets	-60.6	-37.2	-2.0	-108.4	4.0
Profit/loss from operating activities	468.8	-1.2	9.1	495.4	33.3
Net finance	-11.2	-11.9	-11.5	-35.3	-34.8
Profit/loss before income tax	457.6	-13.2	-2.4	460.2	-1.6
Income tax expense	5.0	0.3	-0.8	4.3	-2.5
Net profit/loss	462.7	-12.9	-3.2	464.5	-4.1

• Increasing YTD revenues driven by higher oil prices and Kurdistan payments
• Increase in Q3 2017 cost of goods sold due to inventory charge and higher DD&A

Investment program

Annual operational spend USD million

Capex Expex Lifting

• Operational spend at end-Q3 2017 stood at USD 186 million, of which USD 102 million was capex, USD 75 million lifting costs and USD 9 million exploration expenses
• Capex for 2017 remains on track with previous forecast of USD 130 million

YTD Q3 2017 cash flow

USD million

• Strong operational cash flow of USD 270 million through end-Q3 2017 (USD 99 million during full-year 2016)
• Cash balance increase of USD 138 million since end-2016

Capital structure

• Solid balance sheet with low leverage
• Net debt reduced to USD 1 million
• Equity strengthened by Kurdistan receivables settlement

Important notice

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 9 November 2017. 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.