DNO ASA — Investor Presentation 2019

May 8, 2019

DNO ASA First Quarter 2019 Interim Results

Corporate overview and operational highlights

Corporate overview

• DNO has transformed into a more balanced company, continuing to generate significant cash flow from ultra-low cost, short-cycle, highly prolific fields in Kurdistan – but now with a strong, second leg in the North Sea
• Following recent transactions, proven and probable (2P) reserves climbed to 465 million barrels of oil equivalent (MMboe), of which around 20 percent in the North Sea
• In 2019, current North Sea assets expected to contribute around 20 percent of DNO's production, 30 percent of revenues and 20 percent of operational cash flow
• Planned capital expenditure in 2019 of USD 375 million, including USD 225 million in Kurdistan and USD 150 million in the North Sea
• Nimble, fast-track operator with strong balance sheet and reputation for bold strategy execution and resilience

Q1 2019 operational highlights

• Company Working Interest (CWI) production averaged 107,600 barrels of oil equivalent per day (boepd) in Q1 2019, up 36 percent from 79,100 boepd a year earlier in Q1 2018
• Of which in Q1 2019, 89,400 barrels of oil per day (bopd) in Kurdistan and 18,200 boepd in the North Sea
• Operated production in Kurdistan averaged 126,800 bopd, up from 109,400 bopd in Q1 2018
• Oda field in Norway came onstream in mid-March of this year below budget and ahead of schedule and forecast to reach 30,000 boepd of gross production (4,500 boepd CWI) by yearend 2019

Q1 2019 financial highlights

• Q1 2019 revenues of USD 204 million, up from USD 142 million in Q1 2018
• Of which USD 169 million in Kurdistan and USD 35 million in the North Sea
• Exited the quarter with cash balance of USD 254 million plus USD 109 million in treasury shares and marketable securities
• Distributed second dividend payment of NOK 0.20 per share to shareholders in March 2019
• Received USD 46 million payment from Equinor reflecting settlement of previously announced asset swap transaction from 1 January 2019 to completion on 30 April 2019

DNO driving Kurdistan's oil sector ramp up

• Kurdistan's security, financial and oil sector conditions have normalized and Kurdistan remains one of the most exciting onshore oil provinces anywhere
• Leading international operator in Kurdistan measured in active rigs, wells drilled, production and oil reserves
• Soon to mobilize fifth drilling rig to support largest drilling campaign in Kurdistan's history, including up to 20 DNOoperated exploration, appraisal and production wells this year
• Tawke production currently averaging around 73,000 bopd and Peshkabir around 54,000 bopd
• Peshkabir has generated USD 1 billion in gross revenue, or four times the spend to date, of which USD 300 million net to DNO
• Testing ongoing at first exploration well at Baeshiqa license targeting Cretaceous reservoir
• Second Baeshiqa well targeting deeper Jurassic and Triassic on same structure drilling ahead at 1,982 meters

Fast-track growth strategy in Norway

• Completed acquisition of Faroe Petroleum plc and integration of teams and assets on track
• Faroe acquisition brings 18,000 boepd to DNO portfolio less than two years after re-entering the North Sea
• Acquisition represents not a pivot away from Kurdistan but a pivot to Norway and the UK
• DNO leapfrogs to ranks of top five companies in total licenses held in Norway (90 of which 22 are operated)
• With greater financial capacity, DNO to take larger stakes in permits and ramp up activity on operated projects
• Opens new financing opportunities for the Company and expected to lower our weighted average cost of capital (WACC)
• Targeting 50,000 boepd by our 50th anniversary on our home turf, or in this case, our home surf

Active 2019 program

• At USD 70 per barrel Brent price, expect revenues to exceed USD 1 billion, with the North Sea contributing around 30 percent of the total
• Active drilling program of 36 wells (25 development/infill and 11 exploration/appraisal) across portfolio, representing the highest number of wells in DNO's 48-year history
• Project 2019 capital expenditure and exploration expenditure at USD 440 million, of which USD 250 million in Kurdistan and USD 190 million in the North Sea
• Targeting new acquisitions in the North Sea and Kurdistan

Financial overview

DNO financial results – key figures

• In Q4 2018, Kurdistan export revenue recognition changed from cash to accrual basis, resulting in one-off booking of an additional USD 183 million in Q4 accounts
• Increase in revenues of USD 18 million from Q4 2019 net of the accounting change

Financial summary

USD million	Q1 2019	Q4 2018	Q1 2018	2018
Revenue	204.1	368.8	142.3	829.3
Cost of goods sold	-117.0	-106.8	-75.4	-350.6
Gross profit	87.1	262.0	66.9	478.7
Expensed exploration	-32.8	-19.6	-26.9	-64.7
Administrative expenses	-15.4	-13.0	-9.8	-36.7
Other operating income/expenses	-1.1	0.6	-3.7	1.4
Impairment of oil and gas assets	-	-	-1.5	-1.9
Profit/-loss from operating activities	37.9	230.0	25.0	376.8
Net finance	-22.2	-15.3	-10.5	-54.3
Profit/-loss before income tax	15.7	214.6	14.6	322.5
Tax income/-expense	35.4	15.6	3.8	31.8
Net profit/-loss	51.1	230.3	18.4	354.3

• Nearly 20 percent of revenues in Q1 2019 from North Sea
• Net profit of USD 51.1 million in Q1 2019

Investment program

Annual operational spend USD million

Capex Expex Lifting

• Operational spend projected at USD 680 million in 2019, of which USD 340 million in Kurdistan and USD 340 million in the North Sea (after exploration tax refund)
• Projected annual capex of USD 375 million, up from USD 140 million in 2018

2019 capital and exploration expenditure outlook

• Planned capital expenditure in 2019 of USD 375 million, of which USD 225 million in Kurdistan and USD 150 million in the North Sea
• Around 50 percent of North Sea capital expenditure focused on Ula and Fenja
• North Sea exploration expenditure of USD 40 million (post-tax)
• Kurdistan capital expenditure of USD 225 million primarily relates to drilling activity at Tawke and Peshkabir and the gas reinjection project
• Tawke license terms provide for rapid cost recovery
• DNO Baeshiqa exploration expenditure of USD 25 million

Q1 2019 cash flow

USD million

• Funded Faroe acquisition from cash balance
• Investment activities mainly relates to Faroe acquisition (USD 429 million net of cash acquired)
• Capital expenditure stood at USD 92 million during Q1 2019

Capital structure

Faroe shares Financial assets excluding Faroe shares

• Cash balance of USD 254 million at end-Q1 2019
• Faroe share value of USD 209 million in Q4 2018
• Solid balance sheet with low leverage

Conservative financial strategy

• DNO maintains solid cash position and conservative leverage
• At 6 May 2019, cash balance of USD 259 million plus USD 112 million in treasury shares and marketable securities
• DNO01 USD 200 million bond outstanding with maturity in June 2020
• DNO02 USD 400 million bond outstanding with maturity in May 2023
• FAPE01 USD 86 million bond outstanding with maturity in April 2023
• USD 245 million reserve based lending (RBL) facility currently undrawn

Capital structure as of 6 May 2019

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 8 May 2019. 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.