THIS FINAL OFFER DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt about the Final Offer or the action you should take, you are recommended to seek your own personal financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial advisers authorised under the Financial Services and Markets Act 2000 if you are resident in the UK or, if not, from another appropriately authorised independent financial adviser.

If you have sold or otherwise transferred all your Faroe Shares, please send this Document, the First Offer Document and the accompanying documentation as soon as possible to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected, for delivery to the purchaser or transferee. However, these documents should not be forwarded, distributed or transmitted in, into or from any jurisdiction where to do so would violate the laws of that jurisdiction. If you have sold or otherwise transferred only part of your holding of Faroe Shares, you should retain these documents and contact the bank, stockbroker or other agent through whom the sale or transfer was effected.

The release, publication or distribution of the First Offer Document, this Document, the First Form of Acceptance and the accompanying Final Form of Acceptance, and/or any other accompanying documents (in whole or in part), in jurisdictions other than the UK or the US may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the UK or the US should inform themselves about, and observe, any applicable legal or regulatory requirements. Failure to comply with any such restrictions may constitute a violation of the securities laws of any such jurisdiction.

The Final Offer is not being made, directly or indirectly, in or into or by use of the mails or any other means or instrumentality (including, without limitation, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Final Offer will not be capable of acceptance by any such use, means, instrumentality or facilities or from within any such jurisdiction.

Faroe Shareholders who have previously accepted the Offer will automatically be deemed to have accepted the terms of the Final Offer by virtue of their prior acceptances and therefore need not take any further action.

This document should be read as a whole and in conjunction with the Final Form of Acceptance (if you hold Faroe Shares in certificated form).

The procedure for acceptance of the Final Offer is set out on pages 12 to 15 of this Document, in parts D and E of Appendix I of the First Offer Document and, in respect of certificated Faroe Shares, in either of the Forms of Acceptance. To accept the Final Offer in respect of certificated Faroe Shares, you must complete and return either the First Form of Acceptance or the Final Form of Acceptance as soon as possible and, in any event, so as to be received by Equiniti Limited, Corporate Actions, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA by no later than 1.00 p.m. (London time) on 23 January 2019. Acceptances in respect of uncertificated Faroe Shares should be made electronically through CREST so that the TTE instruction settles no later than 1.00 p.m. (London time) on 23 January 2019. If you are a CREST sponsored member, you should refer to your CREST sponsor as only your CREST sponsor will be able to send the necessary TTE instruction to Euroclear.

Lambert Energy Advisory Ltd, which is authorised and regulated by the FCA in the UK, is acting for DNO and no one else in connection with the Offer and the Final Offer and will not be responsible to anyone other than DNO for providing the protections afforded to its clients, or for giving advice in connection with the Offer and the Final Offer or any matter referred to herein.

Pareto Securities AS is acting exclusively for DNO and no one else in connection with the Offer and the Final Offer and will not be responsible to anyone other than DNO for providing the protections afforded to its clients or for providing advice in relation to the Offer and the Final Offer or any other matters referred to herein.

IMPORTANT NOTICES

OVERSEAS JURISDICTIONS

The availability of the Final Offer to Faroe Shareholders who are not resident in and citizens of the UK or the US may be affected by the laws of the relevant jurisdictions in which they are located or of which they are citizens. Persons who are not resident in the UK or the US should inform themselves of and observe, any applicable legal or regulatory requirements of their jurisdictions.

The release, publication or distribution of this announcement in or into jurisdictions other than the UK or the US may be restricted by law and therefore any persons who are subject to the law of any jurisdiction other than the UK or the US should inform themselves about, and observe, any applicable requirements. Any failure to comply with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Final Offer disclaim any responsibility or liability for the violation of such restrictions by any person. This document has been prepared for the purposes of complying with English law and the Code and the information disclosed may not be the same as that which would have been disclosed if this Document had been prepared in accordance with the laws of jurisdictions outside of England.

The Final Offer is not being made, directly or indirectly, in, into or from any jurisdiction where to do so would violate the laws in that jurisdiction. Accordingly, copies of this Document and any other documentation relating to the Final Offer will not be and must not be, mailed or otherwise forwarded, distributed or sent in, into or from any jurisdiction where to do so would violate the laws of that jurisdiction.

NOTICE TO US FAROE SHAREHOLDERS

The Final Offer is being made for the securities of an English company and is subject to UK disclosure requirements, which are different from those of the US. The financial information included in this Document has been prepared in accordance with IFRS and thus may not be comparable to financial information of US companies or companies whose financial statements are prepared in accordance with generally accepted accounting principles in the US.

The Final Offer will be made in the US pursuant to an exemption from the US tender offer rules provided by Rule 14d-1I under the US Exchange Act and otherwise in accordance with the requirements of the Code. Accordingly, the Final Offer will be subject to disclosure and other procedural requirements, including with respect to withdrawal rights, offer timetable, settlement procedures and timing of payments, that are different from those applicable under US domestic tender offer procedures and law.

The receipt of cash pursuant to the Final Offer by a US Faroe Shareholder will likely be a taxable transaction for US federal income tax purposes and under applicable state and local, as well as foreign and other tax laws. Each holder of Faroe Shares is urged to consult his/her independent professional advisor immediately regarding the tax consequences of acceptance of the Final Offer.

It may be difficult for US Faroe Shareholders to enforce their rights and any claim arising out of the US federal securities laws, since DNO is located in a country other than the US, and some or all of their officers and directors may be residents of countries other than the US. US Faroe Shareholders may not be able to sue a non-US company or its officers or directors in a non-US court for violations of the US securities laws. Further, it may be difficult to compel a non-US company and its affiliates to subject themselves to a US court's judgement.

In accordance with normal UK practice, DNO or its nominees, or its brokers (acting as agents), may from time to time make certain purchases of, or arrangements to purchase, Faroe Shares outside the US, other than pursuant to the Final Offer, before or during the period in which the Final Offer remains open for acceptance. These purchases may occur either in the open market at prevailing prices or in private transactions at negotiated prices. Any information about such purchases will be disclosed as required in the UK, will be reported to a Regulatory Information Service and will be available on the London Stock Exchange website, www.londonstockexchange.com.

FORWARD-LOOKING STATEMENTS

This document (including information incorporated by reference in this Document), oral statements made regarding the Final Offer, and other information published by DNO contain statements which are, or may be deemed to be, "forward-looking statements". Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of DNO about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forwardlooking statements. The forward-looking statements contained in this Document include statements relating to the expected effects of the Final Offer on DNO and Faroe, the expected timing and scope of the Final Offer and other statements other than historical facts.

Often, but not always, forward-looking statements can be identified by the use of forward-looking words such as "plans", "expects" or "does not expect", "is expected", "is subject to", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", "believes" or variations of such words and phrases or statements that certain actions,

IMPORTANT NOTICES

events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Although DNO believes that the expectations reflected in such forward-looking statements are reasonable, DNO can give no assurance that such expectations will prove to be correct. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These factors include the satisfaction of the Condition, as well as additional factors, for example, oil and gas operations, particularly those relating to development stage assets which are subject to varying inputs that may impact timing, including, inter alia, permitting; environmental regulation; changes to regulators and regulation; third party manufacturers and service providers; the weather and asset partner and operator actions. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements. Such forward-looking statements should therefore be construed in the light of such factors. DNO, its associates, directors, officers and advisers provide no representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this Document will actually occur. You are cautioned not to place undue reliance on these forward-looking statements. Other than in accordance with its legal or regulatory obligations DNO is under no obligation, and DNO expressly disclaims any intention or obligation, to update or revise any forwardlooking statements, whether as a result of new information, future events or otherwise.

NO PROFIT FORECASTS OR QUANTIFIED BENEFITS STATEMENT

No statement in this Document is intended as a profit forecast, profit estimate or qualified benefits statement and no statement in this Document should be interpreted to mean that earnings per Faroe Share or DNO share for the current or future financial years would necessarily match or exceed the respective historical published earning per Faroe Share or DNO share or to mean that the enlarged group's earnings in the first 12 months following the Final Offer, or in any subsequent period, would necessarily match or be greater than those of Faroe or DNO for the relevant preceding financial period or any other period.

ROUNDING

Certain figures included in this Document have been subjected to rounding adjustments. Accordingly, figures shown in the same category presented in different tables may vary slightly and figures shown as totals in certain tables may not be an arithmetic aggregation of the figures that precede them.

ELECTRONIC COMMUNICATIONS

Please be aware that addresses, electronic addresses and certain other information provided by Faroe Shareholders, persons with information rights and other persons for the receipt of communications from Faroe may be provided to DNO during the Offer Period as required under Section 4 of Appendix 4 to the Code.

PUBLICATION ON WEBSITE AND AVAILABILITY OF HARD COPIES

A copy of this Document and the documents required to be published by Rule 26 of the Code is and will be available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on DNO's website https://www.dno.no/en/investorrelations/offer_announcement_26November. For the avoidance of doubt, save as expressly referred to in this Document, the contents of the websites referred to in this Document are not incorporated into and do not form part of this Document.

You may request a hard copy of this Document and all information incorporated into this Document by reference to another source by contacting Equiniti Limited on 0333 207 6399 or +44 121 415 0973 (if calling from outside the UK) or by submitting a request in writing to Equiniti Limited, Corporate Actions, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA. Lines are open from 8.30 a.m. to 5.30 p.m. (London time) Monday to Friday (excluding English and Welsh public holidays). Calls to the helpline from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. Please note that Equiniti Limited cannot provide advice on the merits of the Final Offer nor give financial, tax, investment or legal advice. If you have received this Document in electronic form, copies of this Document and any document or information incorporated by reference into this Document will not be provided unless such a request is made.

DEALING DISCLOSURE REQUIREMENTS

Under Rule 8.3(a) of the Code, any person who is interested in 1 percent or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 p.m. (London time) on the

IMPORTANT NOTICES

10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 p.m. (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1 percent or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 p.m. (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0) 20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

The date of publication of this Document is 8 January 2019.

TO ACCEPT THE FINAL OFFER:

1. If you do not hold your Faroe Shares in CREST, complete either the First Form of Acceptance or the Final Form of Acceptance in accordance with paragraph 15(b) of the letter from DNO (see page 13), and Part D of Appendix I of the First Offer Document. Return a completed, signed and (where applicable) witnessed Form of Acceptance (along with any appropriate documents of title) using the first class reply-paid envelope provided as soon as possible and, in any event, so as to be received by 1.00 p.m. (London time) on 23 January 2019.
2. If you hold your Faroe Shares in CREST, you should follow the procedures set out in paragraph 15(g) 15(j) of the letter from DNO (see pages 14 to 15), and Part E of Appendix I of the First Offer Document.

If you have any questions relating to this Document, or the completion and return of the First Form of Acceptance or the Final Form of Acceptance, please telephone Equiniti Limited between 8.30 a.m. and 5.30 p.m. (London time) Monday to Friday (excluding English and Welsh public holidays) on 0333 207 6399 or +44 121 415 0973 (if calling from outside the UK). Calls to the helpline from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. Please note that Equiniti Limited cannot provide advice on the merits of the Final Offer nor give financial, tax, investment or legal advice.

THE FINAL CLOSING DATE OF THE FINAL OFFER IS 1.00 P.M. LONDON TIME ON 23 JANUARY 2019.

PART I	LETTER FROM DNO
	1.	Introduction	7
	2.	The Final Offer	7
	3.	Final Closing Date for the Final Offer	8
	4.	Background to and reasons for the Final Offer	8
	5.	Information relating to DNO	9
	6.	Information relating to Faroe	9
	7.	Financing of the Final Offer	10
	8.	Intentions of DNO for the management, employees and locations	10
	9.	Existing rights and pensions	11
	10.	Faroe Share Schemes	11
	11.	Time pro-rating	11
	12.	Disclosure of interests in Faroe relevant securities	11
	13.	UK taxation	12
	14.	Overseas Shareholders	12
	15.	Procedure for acceptance of the Final Offer	12
	16.	Settlement	15
	17.	Delisting and compulsory acquisition	16
	18.	Further information	16
	19.	Dividends	16
	20.	Action to be taken	16

APPENDIX I		CONDITION AND FURTHER TERMS OF THE FINAL OFFER	18
		PART A CONDITION OF THE FINAL OFFER	18
		PART B FURTHER TERMS OF THE FINAL OFFER	19
APPENDIX II		FINANCIAL INFORMATION	20

	APPENDIX III ADDITIONAL INFORMATION 21
	1.	Responsibility	21
	2.	Responsible Persons	21
	3.	Market quotations	21
	4.	No material changes	21
	5.	Bases of calculations and sources of information	23
	6.	Financing arrangements and cash confirmation	24
	7.	General	24
	8.	Documents available for inspection	24

		APPENDIX IV DEFINITIONS	26

DNO ASA

(Incorporated and registered in Norway with registered number 921 526 121)

Directors: Registered Office: Bijan Mossavar-Rahmani (Executive Chairman) Dokkveien 1, Lars Arne Takla (Deputy Chairman) 0250 Oslo, Norway Elin Karfjell (Director) Gunnar Hirsti (Director) Shelley Watson (Director)

8 January 2019

To Faroe Shareholders and for information only, to participants in the Faroe Share Schemes and persons with information rights Dear Shareholder,

CASH OFFER FOR FAROE BY DNO

1. INTRODUCTION

On 12 December 2018, DNO published the First Offer Document containing the full terms and conditions of its cash offer for the entire issued and to be issued share capital of Faroe not already owned by DNO at 152 pence per share. On 3 January 2019, DNO announced that it had acquired more than 30 percent of the Faroe Shares and as such, the Offer became mandatory pursuant to Rule 9 of the Code.

On 8 January 2019, DNO announced the terms of an increased and final cash offer for the entire issued and to be issued share capital of Faroe at a price of 160 pence in cash for each Faroe Share (other than the Faroe Shares already held by DNO).

This Document, Appendix I of the First Offer Document (as amended or supplemented by this Document) and, if you hold certificated Faroe Shares, the Forms of Acceptance, together contain the formal Final Offer (including its terms and conditions).

Please read carefully paragraph 15 below which sets out the procedures for acceptance of the Final Offer. Your attention is drawn, in particular, to the conditions and further terms of the Final Offer set out in Appendix I to this Document, Parts D and E of Appendix I of the First Offer Document and, if you hold certificated Faroe Shares, in the Forms of Acceptance.

2. THE FINAL OFFER

We are offering to acquire, on the terms and conditions set out in this Document and, in respect of certificated Faroe Shares, the Forms of Acceptance, all of the Faroe Shares (other than those already held by DNO) on the following basis:

for each Faroe Share 160 pence in cash

The Final Offer values Faroe's existing issued and to be issued share capital at approximately £641.7 million.

Of the Final Offer value of approximately £454 million (\$580 million) approximately £53 million (\$67 million) is payable to Faroe directors, management and employees in respect of various options, matching share schemes (on the basis of full vesting) and ordinary shares held by directors. The balance of approximately £402 million (\$513 million) is payable to the remaining Faroe Shareholders (other than shares held by DNO and the Faroe Employee Benefit Trust).

The Final Offer price represents a premium of 52.4 percent to Faroe's share price of 105 pence at the close of business on 3 April 2018, the last Business Day before DNO announced its first acquisition of shares in Faroe, and a premium of 27.2 percent to Faroe's share price of 125.8 pence at the close of business on 23 November 2018, the last Business Day before the announcement of the Offer.

The Final Offer extends to all Faroe Shares unconditionally allotted or issued and fully paid on the date of the Final Offer and any Faroe Shares which are unconditionally allotted or issued and fully paid (including pursuant to the vesting and/or exercise of options and awards under the Faroe Share Schemes) before the date on which the Final Offer closes or such earlier date as DNO may, subject to the Code, decide, not being earlier than the date on which the Final Offer becomes unconditional as to acceptances (excluding any treasury shares except to the extent these cease to be held as treasury shares before such date as DNO may determine).

Subject to the reservation set out below, and in accordance with the Code, DNO will not be permitted to increase the Final Offer.

DNO reserves the right to set aside its no increase statement following a competitive situation arising, including if there is a public announcement of the existence of a third-party offeror or potential offeror (whether publicly identified or not) for Faroe.

Should DNO wish to set aside its no increase statement as a result of the above circumstance having arisen, DNO will make an announcement to that effect within four Business Days of such circumstances arising and send a notice to Faroe Shareholders and persons with information rights at the earliest opportunity.

The Final Offer is subject to the Condition, set out in full in Appendix I to this Document, being:

"Valid acceptances being received (and not, where permitted, withdrawn) by not later than 1.00 p.m. (London time) on the Final Closing Date of the Final Offer (or such later time(s) and/or date(s) as DNO may, subject to the rules of the Code, decide) in respect of such number of Faroe Shares as, together with any Faroe Shares acquired or agreed to be acquired (whether pursuant to the Final Offer or otherwise), will result in DNO and any person acting in concert with it holding Faroe Shares carrying more than 50 percent of the voting rights then normally exercisable at a general meeting of Faroe, including for this purpose (to the extent, if any, required by the Panel) any voting rights attaching to Faroe Shares that are unconditionally allotted or issued before the Final Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding subscription rights or conversion rights or otherwise.

For the purpose of this condition:

(a) Faroe Shares which have been unconditionally allotted but not issued shall be deemed to carry the voting rights which they will carry upon issue; and
(b) valid acceptances shall be deemed to have been received in respect of Faroe Shares which are treated for the purposes of the Companies Act 2006 as having been acquired or contracted to be acquired by DNO whether by virtue of acceptances of the Final Offer or otherwise."

3. FINAL CLOSING DATE FOR THE FINAL OFFER

The Final Offer will remain open for acceptance until 1.00 p.m. (London time) on 23 January 2019. Subject to the reservation set out below, and in accordance with the Code, DNO will not be permitted to extend the Final Closing Date unless the Final Offer is wholly unconditional at such time.

DNO reserves the right to set aside its no extension statement following a competitive situation arising, including if there is a public announcement of the existence of a third-party offeror or potential offeror (whether publicly identified or not) for Faroe.

Should DNO wish to set aside its no extension statement as a result of the above circumstance having arisen, DNO will make an announcement to that effect within four Business Days of such circumstance arising and send a notice to Faroe Shareholders and persons with information rights at the earliest opportunity.

4. BACKGROUND TO AND REASONS FOR THE FINAL OFFER

The justification for acquiring Faroe remains unchanged and is as set out in paragraph 3 of the letter from DNO in Part I of the First Offer Document.

Since its 26 November 2018 announcement, DNO has maintained that its original 152 pence per share Offer price was full and fair, even generous, especially in the light of weaknesses in the equity and commodity markets and recent newsflow from Faroe itself. DNO has studied the various defence documents published by the Faroe Board and found nothing to change this opinion.

Even Faroe's hastily revised and released report "Independent Expert's Report on the Oil and Gas Assets of Faroe Petroleum plc" left important questions unanswered, as DNO highlighted in its 2 January 2019 announcement, such as, still bullish oil price assumptions, exclusion of the much heralded Equinor swap, no accounting for corporate costs when converting the asset valuation to a company valuation, and optimistic interpretation of value from the highly uncertain categories of contingent resources and "near term prospects", among others.

We remain concerned about Faroe's ability to deliver its longed for "transformational growth" in light of continuing risks surrounding the Brasse development, recent exploration disappointments in the Brasse East and Rungne wells in the Brasse area and also the Cassidy prospect, and note with disappointment the disclosure by the Norwegian Petroleum Directorate ("NPD") on 7 January 2019 of a substantial downgrade of the reserves in the Oda field.

Having thought long and hard about the situation, DNO has decided to increase its Offer price and close out the Offer, and focus now on putting Faroe on a firm operations and commercial footing.

We are pleased that starting with our first acquisition of shares, shareholders holding 43.8 percent of Faroe's shares have voted with their feet by selling shares to DNO or with their hands by accepting our Offer.

Although DNO would prefer to achieve its 50 percent acceptance level and acquire additional shares, DNO is nonetheless comfortable with the possibility of its Offer lapsing, leaving DNO with less than a majority shareholding in Faroe. In the latter case, DNO has already stated that it will intensify its efforts to ensure that Faroe is managed for the benefit of all shareholders.

5. INFORMATION RELATING TO DNO

5.1 Business description

DNO is a Norwegian oil and gas operator focussed on the Middle East and North Sea. Founded in 1971 and listed on the Oslo Stock Exchange, DNO holds participating interests in onshore and offshore licences at various stages of exploration, development and production in the Kurdistan region of Iraq, Norway, the UK and Yemen.

5.2 Current trading and prospects

On 1 November 2018, DNO released its unaudited third quarter trading statement for the nine months ended 30 September 2018. The following has been extracted without material adjustment from the unaudited third quarter results:

Revenues of \$460.5 million for the nine months ended 30 September 2018 are up from \$231.3 million in the first nine months of 2017 on the back of solid production, regular export payments and higher oil prices.
Net profit of \$124 million for the nine months ended 30 September 2018 compared to \$464.5 million in the first nine months of 2017, which included the accounting recognition of the receivables settlement agreement with the Kurdistan Regional Government in the third quarter of 2017 (see paragraph 9.1(b) of Appendix III of the First Offer Document).
DNO is currently operating gross production in excess of 125,000 bopd. As at 31 December 2017, DNO had 2P reserves of 384.1 MMboe and 2C resources of 98.9 MMboe (both figures on a CWI basis).

Certain financial information relating to DNO is incorporated by reference into this Document as set out in Appendix II.

5.3 Financial effects of the Final Offer

DNO believes that on completion, assuming full acceptance of the Final Offer, there will be no material impact on DNO's consolidated earnings, but the Final Offer will result in DNO's consolidated balance sheet being increased by an amount equal to the fair value of the net assets acquired in Faroe accounted for in accordance with IFRS 3 (step acquisition). In addition, DNO's consolidated assets would also be decreased to reflect the cash used to fund the Final Offer. DNO's consolidated earnings after completion of the Final Offer will be affected by Faroe's earnings and the effects of treatment of items recognised as part of the purchase price allocation in accordance with IFRS 3. Details of the financing of the Final Offer are set out in paragraph 7 of this letter.

6. INFORMATION RELATING TO FAROE

6.1 Business description

Faroe is an independent oil and gas company admitted to trading on AIM since 2003 and focused on exploration, appraisal and production activities in Norway and the UK. As at 31 December 2017, Faroe has stated 2P reserves of 97.7 MMboe and 2C resources of 78.6 MMboe; 2017 daily production averaged 14,349 boepd.

6.2 Current trading and prospects

On 18 September 2018, Faroe released its notice of interim results, an extract of which is set out below together with extracts from Faroe's Annual Report 2017 and other operational updates and presentations by Faroe in November and December 2018 and January 2019 without material adjustment:

Average H1 2018 production totalled 12,402 boepd from existing portfolio (H1 2017: 14,800 boepd) with full year 2018 production guidance of approximately 12,000 boepd.
Adjusted H1 2018 revenue totalled £102.2 million (H1 2017: £95.5 million), reflecting higher commodity prices, partially offset by lower production during this period. Statutory revenue in H1 2018 of £67.8 million (H1 2017: £80.1 million), excluding produced but not lifted hydrocarbons (underlift) of £37.3 million (H1 2017: £15.6 million).
Operating profit in H1 2018 of £82.5 million (H1 2017: loss £0.3 million) and profit after tax of £42.5 million (H1 2017: loss £2.9 million) – reflecting higher EBITDAX and £24.5 million post-tax gain on Fenja part-divestment.
Net Faroe Group capital expenditure for 2018 is estimated at approximately £225 million pre-tax.
Rungne well, operated by Faroe, announced as a technical discovery on 14 November 2018 but no hydrocarbons were encountered in the main Oseberg target. The preliminary gas and condensate recoverable volume range for the discovery in the Ness formation is likely to be in the range of 2.7-17.0 MMboe and therefore unlikely to be commercial in isolation.
Agar appraisal well announced on 15 November 2018 has recoverable resources estimated between 3.8 and 12.5 MMboe net to Faroe.
Plantain announced as a discovery although no resource estimates were disclosed.
Spud of Brasse East well was announced on 21 November 2018 and the Cassidy well on 5 December 2018.
Trym is scheduled to temporarily shut in production from the second half of 2019 according to Faroe's Annual Report 2017.
Production from Schooner and Ketch ceased on 15 August 2018 following the planned closure of the Conocooperated Theddlethorpe onshore host facility.
An agreement was entered into with Equinor to swap its interests in the Njord, Hyme redevelopment and Bauge development assets in return for interests in four production assets on the Norwegian Continental Shelf (Alve, Marulk, Ringhorne East and Vilje) on a cashless basis. The transaction has an effective date of 1 January 2019 and is subject only to consent from the Norwegian authorities.
The Cassidy exploration well within the Oda licence was announced as a dry well on 27 December 2018.
The Brasse East exploration well was announced as a dry well on 2 January 2019. Brasse East targeted a separate structure located to the east of the Brasse field, encountering 48 metres of gross Jurassic reservoir which was found to be water wet. At the same time a subsequent appraisal side-track into the Brasse field was announced to have met pre-drill expectations.
In a statement on 7 January 2019 by the Norwegian Petroleum Directorate ("NPD") it was announced that reserves at the Oda field were estimated at 32.7 MMboe down from NPD's previous estimate of 47.2 MMboe.

Certain financial information relating to Faroe is incorporated by reference into this Document as set out in Appendix II.

7. FINANCING OF THE FINAL OFFER

The consideration payable by DNO under the terms of the Final Offer will be funded from cash resources available to the DNO Group.

Lambert Energy Advisory Ltd is satisfied that resources available to DNO are sufficient to satisfy in full the cash consideration payable to Faroe Shareholders under the terms of the Final Offer.

8. INTENTIONS OF DNO FOR THE MANAGEMENT, EMPLOYEES AND LOCATIONS

DNO attaches great importance to retaining the skills, knowledge and expertise of Faroe's operational management and employees.

If the transaction completes, DNO foresees changes to representation on the Faroe Board in order to strengthen corporate governance. In addition, due to Norwegian regulations, DNO expects that it may be required to combine its interest in its Norwegian operating subsidiary with Faroe's Norwegian operating subsidiary. In any such combination Faroe and DNO shareholders' interests will be protected as the transaction will be carried out on an arms-length valuation basis and employees' interests will be protected by applicable labour law.

If the Final Offer results in DNO acquiring all of the Faroe Shares, or otherwise leads to a subsequent de-listing, there will be limited overlap of the DNO and Faroe businesses. Faroe has its head office in Aberdeen and also has offices in London, Great Yarmouth and Stavanger. DNO foresees limited rationalisation, mainly targeted at corporate and support functions, notably PLCrelated functions, which may result in associated headcount reductions but DNO intends to retain Faroe's head office in Aberdeen and each of its other offices. DNO has not yet developed specific proposals as to how any potential reductions in headcount would be implemented as it has not yet had access to detailed information from management on the Faroe business, but it will draw up detailed plans within three months of completion. Any individual potentially impacted will be treated in accordance with applicable law and in a manner consistent with prudent practices.

Owing to the nature of its business, Faroe does not have a research and development function.

DNO does not intend to make any material change in the conditions of employment, or the balance of skills and functions, of the employees and management of Faroe.

Any oil and gas exploration and production company will, from time to time in the ordinary course of its business, relinquish, trade or high-grade participating interests in licences. Save in such circumstances, DNO has no intention to redeploy the fixed assets of Faroe.

The Final Offer is not expected to have any impact on DNO's existing business.

DNO has not had any discussions with Faroe's management regarding ongoing incentivisation arrangements following completion of the Final Offer.

9. EXISTING RIGHTS AND PENSIONS

The existing individual and statutory employment rights of Faroe employees, including in relation to the existing pensions obligations under Faroe's defined contribution pension scheme in respect of which DNO will ensure that the level of employer contribution into defined contribution schemes is not reduced, will be safeguarded in accordance with applicable law.

According to Faroe's Annual Report 2017, there is no defined benefit pension scheme in Faroe.

10. FAROE SHARE SCHEMES

The Final Offer extends to any Faroe Shares which are issued or unconditionally allotted (including to satisfy the exercise of options and vesting of awards granted and awards made under the Faroe Share Schemes) whilst the Final Offer remains open for acceptance (or prior to such earlier time and/or date as DNO may, subject to the Code, determine).

Full details on the effect of the Final Offer on outstanding options and awards granted and awards made pursuant to the Faroe Share Schemes and on the choices available to Faroe Share Scheme participants will be set out in separate letters to be sent by DNO to such participants in due course.

11. TIME PRO-RATING

According to information provided by Faroe and their financial advisors to DNO, DNO believes that outstanding options and awards over 28,148,753 Faroe Shares have been granted under the Faroe Incentive Plan, the Faroe Co-Investment Plan and the Faroe Legacy Co-Investment Plan.

Under applicable plan rules, the Faroe remuneration committee has discretion to apply time pro-rating reductions to options and awards under each of these plans following a change of control to reflect the fact that options and awards are vesting early. DNO believes it is appropriate that the Faroe remuneration committee should exercise its discretion to pro-rate options and awards and ensure that any applicable performance conditions for awards are complied with.

DNO has prepared estimates to understand the likely impact of time pro-rating, taking into account the data provided by Faroe and their financial advisors on the date of grant and scheduled vesting date for outstanding options and awards under the Faroe Incentive Plan, the Faroe Co-Investment Plan and the Faroe Legacy Co-Investment Plan. On the assumption that options and awards vest and/or become exercisable on 23 January 2019, and any performance conditions applicable to the awards are satisfied in full, options and awards under these three plans can be expected to vest or become exercisable in respect of all 28,148,753 Faroe Shares referred to above if a time pro-rating reduction is not applied. Were time pro-rating to be applied to options and awards in these circumstances, and on the assumption that relevant performance periods began on the date of grant of the relevant option or award, DNO estimates that options and awards would vest or become exercisable over 18,664,067 Faroe Shares (which includes outstanding awards over 4,788,745 Faroe Shares that DNO believes are currently, or will have become, exercisable by 23 January 2019 and will not therefore be subject to time pro-rating).

12. DISCLOSURE OF INTERESTS IN FAROE RELEVANT SECURITIES

As at the Latest Practicable Date, save as disclosed below, neither DNO, nor any of the Directors of DNO or any member of the DNO Group, nor, so far as the Directors of DNO are aware, any person acting in concert with DNO for the purposes of the Final Offer had any interest in, right to subscribe for, or had borrowed or lent any Faroe Shares or securities convertible or exchangeable into Faroe Shares, nor did any such person have any short position (whether conditional or absolute and whether in the money or otherwise), including any short position under a derivative, any agreement to sell or any delivery obligation or right to require another person to take delivery, or any dealing arrangement of the kind referred to in Note 11 of the definition of acting in concert in the Code, in relation to Faroe Shares or in relation to any securities convertible or exchangeable into Faroe Shares.

As at the Latest Practicable Date, DNO had a beneficial interest in 114,288,128 Faroe Shares, representing 30.6 percent of Faroe's issued share capital.

13. UK TAXATION

The following statements are intended only as a general guide to certain UK tax considerations and do not purport to be a complete analysis of all potential UK tax consequences of acceptance of the Final Offer. They are based on current UK law and what is understood to be the current practice of HMRC as at the date of this Document, both of which may change, possibly with retroactive effect. They apply only to Faroe Shareholders who are resident and, in the case of individuals domiciled, for tax

purposes in (and only in) the UK, who hold their Faroe Shares as an investment (other than in an individual savings account or pension arrangement) and who are the absolute beneficial owner of both the Faroe Shares and any dividends paid on them. The tax position of certain categories of Faroe Shareholders who are subject to special rules (such as persons who hold or acquired their Faroe Shares in connection with employment, dealers in securities, insurance companies and collective investment schemes) or who benefit from special reliefs or exemptions is not considered.

The statements summarise the current position and are intended as a general guide only. Faroe Shareholders who are in any doubt as to their tax position or who may be subject to tax in a jurisdiction other than the UK are strongly recommended to consult their own professional advisers.

13.1 UK taxation of chargeable gains

A Faroe Shareholder's liability to UK tax on chargeable gains in respect of a sale of Faroe Shares pursuant to the Final Offer will depend on that shareholder's individual circumstances.

For a Faroe Shareholder who is resident for tax purposes in the UK, the receipt of cash pursuant to the Final Offer will constitute consideration for a disposal, or part disposal, of that shareholder's Faroe Shares. Depending upon the Faroe Shareholder's circumstances, and subject to any available exemption or relief, that disposal may give rise to a chargeable gain or an allowable loss for the purposes of UK taxation of capital gains.

There are various reliefs which could apply to reduce or eliminate a chargeable gain, including the annual exempt amount for individuals and the indexation allowance for Faroe Shareholders within the charge to UK corporation tax.

13.2 UK Stamp Duty and SDRT

No UK Stamp Duty or SDRT should be payable by Faroe Shareholders as a result of accepting the Final Offer.

14. OVERSEAS SHAREHOLDERS

The attention of Overseas Shareholders (and any person, including without limitation, any custodian, nominee or trustee who may have an obligation to forward any document in connection with the Final Offer outside the UK) is drawn to paragraph 7 of Part C and to paragraph (c) of Part D of Appendix I of the First Offer Document (for holders of Faroe Shares in certificated form) and to paragraphs (b), (c) and (d) of Part E of Appendix I of the First Offer Document (for holders of Faroe Shares in uncertificated form) and, in respect of certificated Faroe Shares, to the relevant provisions of either of the Forms of Acceptance.

In addition, the release, publication or distribution of this Document and/or any other documentation in relation to the Final Offer in or into or from jurisdictions other than the UK or the US may be restricted by law and therefore any persons who are subject to the laws of any jurisdiction other than the UK or the US should inform themselves about, and observe, any applicable legal or regulatory requirements.

The Final Offer may not be made, directly or indirectly, in or into or by use of the mails or any other means or instrumentality (including, without limitation, facsimile, e-mail or other electronic transmission, telex or telephone) of interstate or foreign commerce of, or any facility of a national, state or other securities exchange of any Restricted Jurisdiction and the Final Offer will not be capable of acceptance by any such use, means, instrumentality or facilities or from within any Restricted Jurisdiction. Accordingly, copies of this Document will not be and must not be, mailed or otherwise forwarded, distributed or sent in, into or from any Restricted Jurisdiction or any jurisdiction where to do so would violate the laws of that jurisdiction and persons receiving such documents (including custodians, nominees and trustees) must not mail or otherwise forward, distribute or send them in or into or from any Restricted Jurisdiction.

15. PROCEDURE FOR ACCEPTANCE OF THE FINAL OFFER

This section should be read in conjunction with Appendix I of the First Offer Document and, in respect of certificated Faroe Shares, the notes on either of the Forms of Acceptance.

Holders of Faroe Shares in certificated form (i.e. not in CREST) may only accept the Final Offer in respect of such shares by completing and returning the Form of Acceptance in accordance with the procedure set out in paragraphs 15(a) to 15(f) below. Holders of Faroe Shares held in certificated form, but under different designations, should complete a separate Form of Acceptance for each designation. Additional Forms of Acceptance are available from the Receiving Agent at the address set out below.

Holders of Faroe Shares in uncertificated form (i.e. in CREST) may only accept the Final Offer in respect of such shares by TTE instruction in accordance with the procedure set out in paragraphs 15(g) to (j) below. If those Faroe Shares are held under different member account IDs, you should send a separate TTE instruction for each member account ID.

If you are in any doubt as to the procedure for acceptance, please telephone Equiniti Limited between 8.30 a.m. and 5.30 p.m. (London time) Monday to Friday (excluding English and Welsh public holidays) on 0333 207 6399 from within the UK or +44 121 415 0973 if calling from outside the UK. Calls to the helpline from outside the UK will be charged at

applicable international rates. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. Please note that Equiniti Limited cannot provide advice on the merits of the Final Offer nor give financial, tax, investment or legal advice. You are reminded that, if you are a CREST sponsored member, you should contact your CREST sponsor before taking any action.

OFFEREE SHARES HELD IN CERTIFICATED FORM (I.E. NOT IN CREST)

(a) To accept the Final Offer

To accept the Final Offer in respect of Faroe Shares held in certificated form, you must complete either the First Form of Acceptance or the Final Form of Acceptance in accordance with the instructions set out below and on either of the Forms of Acceptance. The instructions printed on the First Form of Acceptance and Final Form of Acceptance are deemed to form part of the terms of the Final Offer. You should complete a separate Form of Acceptance for Faroe Shares held in certificated form but under different designations.

Additional Forms of Acceptance are available from the Receiving Agent at the address set out above. The instructions for completing a Form of Acceptance below apply, where relevant, to each separate Form of Acceptance to be completed by you.

(b) Completing the Form of Acceptance

To accept the Final Offer in respect of your Faroe Shares, you must complete box 2 and box 3 on the Form of Acceptance. Moreover, if the details in box 1 are incorrect you must place a cross in box 6A and add the correct details in box 6 on the Form of Acceptance. In all cases you must sign box 4A or 4B on the Form of Acceptance. If you are an individual, the signature shall be made in the presence of a witness, who should also sign in accordance with the instructions printed on it. Any Faroe Shareholder which is a company should execute the Form of Acceptance in accordance with the instructions printed on it. If you do not insert a number in box 3, or insert a number greater than your registered holding of Faroe Shares, or box 3 contains the word "ALL" or any other work or marking, your acceptance will be deemed to be in respect of all Faroe Shares held by you in certificated form.

(c) To accept the Final Offer in respect of less than all of your Faroe Shares held in certificated form

To accept the Final Offer in respect of less than all your Faroe Shares held in certificated form, you must insert in box 3 of the Form of Acceptance such lesser number of Faroe Shares in respect of which you wish to accept the Final Offer in accordance with the instructions printed on it. You should then follow the procedure set out in paragraph 15(b) above in respect of such lesser number of Faroe Shares.

(d) Return of Form of Acceptance

To accept the Final Offer, the completed, signed and (where applicable) witnessed Form of Acceptance must be returned, together with your share certificate(s) and/or other document(s) of title for your Faroe Shares, to Equiniti Limited, Corporate Actions, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA by post or (if between 8.30 a.m. and 5.30 p.m. (London time) Monday to Friday (excluding English and Welsh public holidays)) by hand as soon as possible and in any event so as to be received by no later than 1.00 p.m. (London time) on 23 January 2019. A first reply paid envelope is provided for your convenience and may be used by Faroe Shareholders for returning a Form of Acceptance from within the UK. No acknowledgement of receipt of documents will be given.

Any Form of Acceptance received in an envelope post-marked in a Restricted Jurisdiction or otherwise appearing to DNO or its agents to have been sent from a Restricted Jurisdiction may be rejected as an invalid acceptance of the Final Offer. For further information on Overseas Shareholders, see paragraph 14 above.

(e) Share certificates not readily available or lost

If your share certificate(s) and/or other document(s) of title is/are not readily available or is/are lost, the Form of Acceptance should still be completed, signed, (where applicable) witnessed and returned as stated above so as to arrive by no later than 1.00 p.m. (London time) on 23 January 2019. You should send any share certificate(s) and/or other document(s) of title that you have available, accompanied by a letter stating that the remaining documents will follow as soon as possible or that you have lost one or more of your share certificate(s) and/or other document(s) of title. You should submit the relevant share certificate(s) and/or other document(s) of title as soon as possible. No acknowledgement of receipt of document(s) will be given.

In the case of loss, you should write as soon as possible to Faroe's registrars, Link Asset Services, for a letter of indemnity for lost share certificate(s) and/or other document(s) of title which, when completed in accordance with the instructions given, should be returned to the Receiving Agent as set out in paragraph 15(d) above.

(f) Validity of acceptances

Without prejudice to Part C and Part D of Appendix I of the First Offer Document, subject to the provisions of the Code, DNO reserves the right to treat as valid in whole or in part any acceptance of the Final Offer which is not entirely in order or which is not accompanied by the relevant share certificate(s) and/or other document(s) of title. In that event, no payment of cash under the Final Offer will be made until after the relevant share certificate(s) and/or other document(s) of title or indemnities satisfactory to DNO have been received.

OFFEREE SHARES HELD IN UNCERTIFICATED FORM (I.E. IN CREST)

(g) General

If your Faroe Shares are in uncertificated form, to accept the Final Offer you should take (or procure the taking of) the action set out below to transfer the Faroe Shares in respect of which you wish to accept the Final Offer to the appropriate escrow balance(s), specifying the Receiving Agent (in its capacity as a CREST participant under the Escrow Agent's participant ID referred to below) as the Escrow Agent, as soon as possible and in any event so that the TTE instruction settles not later than 1.00 p.m. (London time) on 23 January 2019. Note that settlement cannot take place on weekends or bank holidays (or other times at which the CREST system is non-operational) you should therefore ensure you time the input of any TTE instructions accordingly.

The input and settlement of a TTE instruction in accordance with this paragraph 15(g) will (subject to satisfying the requirements set out in Part C and Part E of Appendix I of the First Offer Document) constitute an acceptance of the Final Offer in respect of the number of Faroe Shares so transferred to escrow.

If you are a CREST sponsored member, you should refer to your CREST sponsor before taking any action. Only your CREST sponsor will be able to send the TTE instruction(s) to Euroclear in relation to your Faroe Shares.

After settlement of a TTE instruction, you will not be able to access the Faroe Shares concerned in CREST for any transaction or charging purposes. If the Final Offer becomes or is declared unconditional in all respects, the Escrow Agent will transfer the Faroe Shares concerned to itself in accordance with paragraph (f) of Part E of Appendix I of the First Offer Document.

You are recommended to refer to the CREST manual published by Euroclear for further information on the CREST procedures outlined below.

You should note that Euroclear does not make available special procedures in CREST for any particular corporate action. Normal system timings and limitations will therefore apply in connection with a TTE instruction and its settlement. You should therefore ensure that all necessary action is taken by you (or by your CREST sponsor) to enable a TTE instruction relating to your Faroe Shares to settle prior to 1.00 p.m. (London time) on 23 January 2019. In this connection you are referred in particular to those sections of the CREST manual concerning practical limitations of the CREST system and timings.

(h) To accept the Final Offer

To accept the Final Offer in respect of Faroe Shares held in uncertificated form, you should send (or if you are a CREST sponsored member, procure that your CREST sponsor sends) to Euroclear a TTE instruction in relation to such shares. A TTE instruction to Euroclear must be properly authenticated in accordance with Euroclear's specifications for transfers to escrow and must contain the following details:

(i) the ISIN number for the Faroe Shares (this is GB0033032904);
(ii) the number of Faroe Shares (in uncertificated form) in respect of which you wish to accept the Final Offer (i.e. the number of Faroe Shares to be transferred to escrow);
(iii) your member account ID;
(iv) your participant ID;
(v) the participant ID of the Escrow Agent (this is 2RA71);
(vi) the member account ID of the Escrow Agent for the Final Offer (this is DNOFAR01);
(vii) the intended settlement date. This should be as soon as possible and in any event not later than 1.00 p.m. (London time) on 23 January 2019;
(viii) the corporate action numbers of the Final Offer. This is allocated by Euroclear and will be available on screen from Euroclear;
(ix) input with a standard delivery instruction priority of 80; and

(x) the contact name and telephone number in the shared note field.

(i) Validity of acceptances

A Form of Acceptance which is received in respect of Faroe Shares held in uncertificated form will not constitute a valid acceptance and will be disregarded. Holders of Faroe Shares in uncertificated form who wish to accept the Final Offer should note that a TTE instruction will only be a valid acceptance of the Final Offer as at the Final Closing Date if it has settled on or before 1.00 p.m. (London time) on that date.

(j) Overseas shareholders

The attention of Faroe Shareholders holding Faroe Shares in uncertificated form and who are citizens or residents of jurisdictions outside the UK is drawn to paragraph 7 of Part C and paragraphs (b), (c) and (d) of Part E of Appendix I of the First Offer Document.

GENERAL

DNO will make an appropriate announcement if any of the details contained in this paragraph 15 alter for any reason.

Normal CREST procedures (including timings) apply in relation to any Faroe Shares that are, or are to be, converted from uncertificated to certificated form, or from certificated to uncertificated form, during the course of the Final Offer (whether any such conversion arises as a result of a transfer of Faroe Shares or otherwise). Holders of Faroe Shares who are proposing so to convert any such shares are recommended to ensure that the conversion procedures are implemented in sufficient time to enable the person holding or acquiring the shares as a result of the conversion to take all necessary steps in connection with an acceptance of the Final Offer (in particular, as regards delivery of share certificate(s) or other documents of title or transfers to an escrow balance as described above) prior to 1.00 p.m. (London time) on 23 January 2019.

If you are in any doubt as to the procedure for acceptance, please telephone Equiniti Limited, between 8.30 a.m. and 5.30 p.m. (London time) Monday to Friday (excluding English and Welsh public holidays) on 0333 207 6399 from within the UK or +44 121 415 0973 if calling from outside the UK. Calls to the helpline from outside the UK will be charged at applicable international rates. Different charges may apply to calls from mobile telephones and calls may be recorded and randomly monitored for security and training purposes. Please note that Equiniti Limited cannot provide advice on the merits of the Final Offer nor give financial, tax, investment or legal advice. You are reminded that, if you are a CREST sponsored member, you should contact your CREST sponsor before taking any action.

16. SETTLEMENT

Subject to the Final Offer becoming or being declared unconditional in all respects (except as provided in paragraph 7 of Part C of Appendix I of the First Offer Document in the case of certain Overseas Shareholders) settlement of the consideration to which any Faroe Shareholder is entitled under the Final Offer will be effected (i) in the case of acceptances received, complete in all respects, by the date on which the Final Offer becomes or is declared unconditional in all respects, within 14 days of such date; or (ii) in the case of acceptances of the Final Offer received, complete in all respects, after the date on which the Final Offer becomes or is declared unconditional in all respects but while it remains open for acceptance, within 14 days of such receipt, in the following manner:

(a) Faroe Shares in certificated form (i.e. not in CREST)

Where an acceptance relates to Faroe Shares in certificated form, settlement of any cash due will be despatched by first class post (or by such other method as may be approved by the Panel) to accepting Faroe Shareholders or their appointed agents (but not into a Restricted Jurisdiction). All such cash payments will be made in pounds sterling by cheque drawn on a branch of a UK clearing bank.

(b) Faroe Shares in uncertificated form (i.e. in CREST)

Where an acceptance relates to Faroe Shares in uncertificated form, the cash consideration to which the accepting Faroe Shareholder is entitled will be paid by means of a CREST payment in favour of the accepting Faroe Shareholder's payment bank in respect of the cash consideration due, in accordance with CREST payment arrangements. DNO reserves the right to settle all or any part of the consideration referred to in this paragraph 16(b) for all or any accepting Faroe Shareholder(s), in the manner referred to in paragraph 16(a), if, for any reason, it wishes to do so.

(c) General

If the Final Offer does not become or is not declared unconditional in all respects:

(i) in the case of Faroe Shares held in certificated form, the relevant Form of Acceptance, share certificate(s) and/or other document(s) of title will be returned by post (or by such other method as may be approved by the Panel) within 14 days of the Final Offer lapsing to the person or agent whose name and address (outside a Restricted

Jurisdiction) is set out in box 1 or, if appropriate, box 6 on the Form of Acceptance or, if none is set out, to the firstnamed holder at his/her registered address (provided that no such documents will be sent to an address in a Restricted Jurisdiction); and

(ii) in the case of Faroe Shares held in uncertificated form, the Escrow Agent will, immediately after the lapsing of the Final Offer (or within such longer period as the Panel may permit, not exceeding 14 days of the lapsing of the Final Offer), give TFE instructions to Euroclear to transfer all Faroe Shares held in escrow balances and in relation to which it is the Escrow Agent for the purposes of the Final Offer to the original available balances of the Faroe Shareholders concerned.

All remittances, communications, notices, certificates and documents of title sent by, to or from Faroe Shareholders or their appointed agents will be sent at their own risk.

17. DELISTING AND COMPULSORY ACQUISITION

If the Final Offer becomes or is declared unconditional in all respects, and DNO acquires or agrees to acquire (taken together with the Faroe Shares already held by it) 75 percent of the voting rights attached to the Faroe Shares, DNO intends to procure that Faroe will make an application to the London Stock Exchange for the cancellation of the admission to trading of the Faroe Shares on AIM.

It is anticipated that the application for cancellation of admission to trading of the Faroe Shares on AIM will take effect no earlier than the date that is 20 Business Days after DNO has acquired or agreed to acquire 75 percent of the voting rights attaching to the Faroe Shares.

The cancellation of admission to trading of the Faroe Shares on AIM would significantly reduce the liquidity and marketability of any Faroe Shares not assented to the Final Offer at that time.

If DNO receives acceptances under the Final Offer in respect of, or otherwise acquires, 90 percent or more of the Faroe Shares to which the Final Offer relates, DNO will exercise its rights pursuant to the provisions of Chapter 3 of Part 28 of the Companies Act to acquire compulsorily the remaining Faroe Shares in respect of which the Final Offer has not been accepted.

It is also intended that, following the cancellation of the admission to trading of the Faroe Shares on AIM, Faroe would be re-registered as a private company under the relevant provisions of the Companies Act.

18. FURTHER INFORMATION

The terms and conditions of the Final Offer are set out in full in this Document and Appendix I of the First Offer Document (as amended or supplemented by this Document). Your attention is drawn to the further information in the Appendices, which form part of this Document, and, if your Faroe Shares are in certificated form, to the First Form of Acceptance and Final Form of Acceptance which should be read in conjunction with this Document.

A copy of this Document (and all information incorporated into this Document by reference to another source), the Final Form of Acceptance, the First Offer Document and the First Form of Acceptance are and will be available, subject to certain restrictions relating to Overseas Shareholders in Restricted Jurisdictions, for inspection on DNO's website at https://www.dno.no/en/investor-relations/offer_announcement_26November.

19. DIVIDENDS

If, after the Final Offer Announcement, any dividend and/or other distribution and/or other return of capital is declared, made or paid or becomes payable in respect of the Faroe Shares, DNO will (except with the consent of the Panel) reduce the consideration payable under the terms of the Final Offer at such date by an amount equal to such dividend and/or distribution and/or return of capital. If any such dividend and/or distribution and/or return of capital occurs, any references in this Document to the consideration payable under the Final Offer will be deemed to be a reference to the consideration as so reduced.

20. ACTION TO BE TAKEN

To accept the Final Offer in respect of certificated Faroe Shares you must complete either the First Form of Acceptance or the Final Form of Acceptance in accordance with the instructions printed on it and return it together with your share certificate(s) or other document(s) of title to Equiniti Limited, Corporate Actions, Aspect House, Spencer Road, Lancing, West Sussex BN99 6DA by post or by hand (between 8.30 a.m. and 5.30 p.m. (London time) Monday to Friday (excluding English and Welsh public holidays)), as soon as possible, but in any event so as to arrive by no later than 1.00 p.m.

(London time) on 23 January 2019. Acceptances in respect of uncertificated Faroe Shares should be made electronically through CREST so that the TTE instruction settles not later than 1.00 p.m. (London time) on 23 January 2019.

Sincerely,

Bijan Mossavar-Rahmani Executive Chairman for and on behalf of DNO

APPENDIX I CONDITION AND FURTHER TERMS OF THE FINAL OFFER

PART A CONDITION OF THE FINAL OFFER

In accordance with Rule 9 of the Code, all of the conditions set out in Part A of Appendix I to the First Offer Document have ceased to apply and have been replaced by the following Condition:

Valid acceptances being received (and not, where permitted, withdrawn) by not later than 1.00 p.m. (London time) on the Final Closing Date of the Final Offer (or such later time(s) and/or date(s) as DNO may, subject to the rules of the Code, decide) in respect of such number of Faroe Shares as, together with any Faroe Shares acquired or agreed to be acquired (whether pursuant to the Final Offer or otherwise), will result in DNO and any person acting in concert with it holding Faroe Shares carrying more than 50 percent of the voting rights then normally exercisable at a general meeting of Faroe, including for this purpose (to the extent, if any, required by the Panel) any voting rights attaching to Faroe Shares that are unconditionally allotted or issued before the Final Offer becomes or is declared unconditional as to acceptances, whether pursuant to the exercise of any outstanding subscription rights or conversion rights or otherwise.

For the purpose of this condition:

(a) Faroe Shares which have been unconditionally allotted but not issued shall be deemed to carry the voting rights which they will carry upon issue; and
(b) valid acceptances shall be deemed to have been received in respect of Faroe Shares which are treated for the purposes of the Companies Act 2006 as having been acquired or contracted to be acquired by DNO whether by virtue of acceptances of the Final Offer or otherwise.

PART B

FURTHER TERMS OF THE FINAL OFFER

1. The Final Offer is a revision of the Offer, which was made by way of the First Offer Document and subsequently revised by way of the Mandatory Offer Announcement, and it shall be construed accordingly.
1. The Final Offer is, save as set out in this Document, made on and subject to the further terms set out in Parts C, D and E of Appendix I of the First Offer Document, which shall be deemed to be incorporated into, and form part of, this Appendix I.
1. Unless the context requires otherwise, any reference in the First Offer Document, including in particular Parts C, D and E of Appendix I of the First Offer Document, and in the First Form of Acceptance to:
(a) "acceptances(s) of the Offer" includes acceptances and deemed acceptances of the Offer and the Final Offer, as the case may be;
(b) "Acceptance Condition" or "acceptance condition" means the Condition set out in Part A of Appendix 1 of the Final Offer Document;
(c) "Form of Acceptance" means the form of acceptance and authority relating to the Offer which accompanied the First Offer Document, or the form of acceptance and authority relating to the Final Offer which accompanied the Final Offer Document, either of which may only be completed by holders of Faroe Shares in certificated form;
(d) "Offer" means the offer being made by DNO to acquire the Faroe Shares on the terms and subject to the conditions set out in the First Offer Document, as amended and supplemented by the Mandatory Offer Announcement and the Final Offer Document (and which shall include the Final Offer), including, where the context so requires, any subsequent revision, variation, extension or renewal of such offer;
(e) "this Document" shall, where the context requires, mean the First Offer Document and/or the Final Offer Document, including all of its parts, schedules and appendices and/or any subsequent document containing the Offer and/or the Final Offer (including the Mandatory Offer Announcement); and
(f) "2 January 2019" shall be replaced by 23 January 2019 except in respect of (i) paragraph 10 of Part 1; (ii) paragraph 1(a) and paragraph 6(k) of Part C of Appendix 1; and (iii) the defined term First Closing Date which shall continue to be defined as "1.00 p.m. (London time) on 2 January 2019".
1. If, after the Final Offer Announcement, any dividend and/or other distribution and/or other return of capital is declared, made or paid or becomes payable in respect of the Faroe Shares, DNO will (except with the consent of the Panel) reduce the consideration payable under the terms of the Final Offer for the Faroe Shares by an amount up to the amount of such dividend and/or distribution and/or return of capital, in which case any reference in this Document to the consideration payable under the terms of the Final Offer will be deemed to be a reference to the consideration as so reduced. To the extent that any such dividend and/or distribution and/or other return of capital is declared, made or paid or is payable and it is: (i) transferred pursuant to the Final Offer on a basis which entitles DNO to receive the dividend or distribution and to retain it; or (ii) cancelled, the consideration payable under the terms of the Final Offer will not be subject to change in accordance with this paragraph. Any exercise by DNO of its rights referred to in this paragraph shall be the subject of an announcement and, for the avoidance of doubt, shall not be regarded as constituting any revision or variation of the Final Offer.
1. Acceptances of the Offer which have already been given during the Offer Period shall be deemed to be acceptances of the Final Offer. Therefore, if you have already validly accepted the Offer, you are not required to take any further action in respect of the Final Offer. Further, an executed Form of Acceptance or TTE Instruction in respect of the Offer which is received (or dated) on or after the date of this Document shall be treated as a valid acceptance of the Final Offer.

APPENDIX II FINANCIAL INFORMATION

FINANCIAL INFORMATION RELATING TO FAROE

The following table sets out financial information in respect of Faroe as required by Rule 24.3 of the Code. The documents referred to below, the contents of which have previously been announced through a Regulatory Information Service, are incorporated into this Document by reference pursuant to Rule 24.15 of the Code. For the avoidance of doubt, only those sections of the sources specifically referred to below are incorporated by reference into, and form part of, this Document.

Document	Website address	Page numbers of the information incorporated by reference
Unaudited results for the six months	https://www.fp.fo/investors/results-centre/	1 – 26 (inclusive)
ended 30 June 2018	Go to the tab for "Presentations" and click on the link entitled "Download pdf" next to the Faroe Interim Results 2018
Annual report and accounts for the	https://www.fp.fo/investors/results-centre/	69 – 131 (inclusive)
financial year ended 31 December 2017	Go to the tab for "Financial Reports" and click on the link entitled "Download pdf" next to the Annual Report 2017
Annual report and accounts for the	https://www.fp.fo/investors/results-centre/	63 – 120 (inclusive)
financial year ended 31 December 2016	Go to the tab for "Financial Reports", click on 2017 and click on the link entitled "Download pdf" next to the Annual Report 2016

FINANCIAL INFORMATION RELATING TO DNO

The following table sets out the financial information in respect of DNO required by Rule 24.3 of the Code. The documents referred to below are incorporated into this Document by reference pursuant to Rule 24.15 of the Code. For the avoidance of doubt, only those sections of the sources specifically referred to below are incorporated by reference into, and form part of, this Document.

Document	Website address	Page numbers of the information incorporated by reference
Unaudited results for the nine months ended 30 September 2018	https://www.dno.no/en/investor-relations/ reports-and-presentations/	1 – 23 (inclusive)
	Click on "Q3 2018 Interim Results Report"
Annual report and accounts for the financial year ended 31 December	https://www.dno.no/en/investor-relations/ reports-and-presentations/	18 – 78 (inclusive)
2017	Click on "Annual Report 2017"
Annual report and accounts for the financial year ended 31 December	https://www.dno.no/en/investor-relations/ reports-and-presentations/	18 – 74 (inclusive)
2016	Click on "Annual Report 2016"

NO INCORPORATION OF WEBSITE INFORMATION

Save as expressly referred to herein, neither the content of Faroe's or DNO's websites, nor the content of any website accessible from hyperlinks on Faroe's or DNO's websites, is incorporated into, or forms part of, this Document.

APPENDIX III

ADDITIONAL INFORMATION

1. RESPONSIBILITY

1.1 The DNO Responsible Persons, whose names are set out in paragraph 2.1 below, accept responsibility for the information contained in this Document (including any expressions of opinion), except that the only responsibility accepted by them in respect of information relating to Faroe, the Wider Faroe Group and the Faroe Directors, which has been compiled from previously published sources, is to ensure that such information is correctly and fairly reproduced and presented. To the best of the knowledge and belief of the DNO Responsible Persons, who have taken all reasonable care to ensure that such is the case, the information contained in this Document for which they accept responsibility is in accordance with the facts and does not omit anything likely to affect the import of such information.

2. RESPONSIBLE PERSONS

2.1 The names of the DNO Responsible Persons and their respective functions are as follows:

Name	Position
Bijan Mossavar-Rahmani	Executive Chairman
Lars Arne Takla	Deputy Chairman
Elin Karfjell	Director
Gunnar Hirsti	Director
Shelley Watson	Director
Bjørn Dale	Managing Director
Haakon Sandborg	Chief Financial Officer

DNO's registered office and the business address of each of the DNO Responsible Persons is Dokkveien 1, 0250 Oslo, Norway.

3. MARKET QUOTATIONS

3.1 The following table shows the Closing Price for Faroe Shares on the following dates:
(a) 23 November 2018, being the last Business Day before the commencement of the Offer Period;
(b) the first Business Day of each of the six months immediately before the Latest Practicable Date; and
(c) the Latest Practicable Date.

Date Price per Faroe Share (pence) 7 January 2019 155.0 2 January 2019 146.0 10 December 2018 152.4 3 December 2018 157.2 23 November 2018 125.8 1 November 2018 146.4 1 October 2018 170.6 3 September 2018 150.0 1 August 2018 142.0 2 July 2018 144.2 1 June 2018 147.6

4. NO MATERIAL CHANGES

4.1 The contents of the First Offer Document shall be deemed to be incorporated into and form part of this Document, save to the extent amended or superseded in the Mandatory Offer Announcement and this Document. Save as set out in this Document, DNO confirms there have been no changes in information detailed in any previously published document relating to the Final Offer or the Offer which are material in the context of the Offer.
4.2 For the purposes of Rule 27.2 of the Code, DNO is required to provide details of any material changes to the matters listed in Rule 27.2(b) of the Code which have occurred since publication of the First Offer Document on 12 December 2018 (or a statement that there have been no such material changes). Accordingly, DNO confirms that, save as described in paragraph 4.3 of this Appendix III, there have been no material changes to the following matters as set out in the First Offer Document:
(a) DNO's intentions with regards to the business, employees and pension scheme(s) of Faroe as detailed in Rule 24.2 of the Code;
(b) DNO's or its subsidiaries' material contracts as detailed in Rule 24.3(a)(vii) of the Code;
(c) ratings or outlooks publicly accorded to DNO and Faroe (of which there continue to be none) prior to the commencement of the Offer Period, and any changes to previous ratings during the Offer Period, as detailed in Rule 24.3(c) of the Code;
(d) the terms of the Offer (other than as set out in the Mandatory Offer Announcement and this Document);
(e) any agreements or arrangements to which DNO is a party which relate to the circumstances in which it may or may not invoke or seek to invoke a condition of the Final Offer as detailed in Rule 24.3(d)(ix) of the Code (of which there were none provided for in the First Offer Document);
(f) any irrevocable commitments and letters of intent which DNO or any person acting in concert with it has procured in relation to relevant securities of Faroe as detailed in Rule 24.3(d)(x) of the Code (of which there were none provided for in the First Offer Document);
(g) post-offer undertakings as detailed in Rule 24.3(d)(xv) of the Code (of which there were none provided for in the First Offer Document);
(h) any offer-related arrangements or other agreements, arrangements or commitments permitted under, or excluded from, Rule 21.2 of the Code as detailed in Rule 24.3(d)(xvi) of the Code (of which there were none provided for in the First Offer Document);
(i) any profit forecasts and quantified financial benefits statements required by Rule 28 of the Code as detailed in Rule 24.3(d)(xviii) of the Code (of which there were none provided for in the First Offer Document);
(j) its financing arrangements and sources of finance in respect of the Final Offer as detailed in Rule 24.3(f) of the Code;
(k) any interests and dealings in relevant securities by, amongst others, DNO, the DNO Responsible Persons and persons acting in concert with DNO, as detailed in Rule 24.4 of the Code;
(l) any agreement, arrangement or understanding (including any compensation arrangement) between DNO or any person acting in concert with it and any of the directors, recent directors, shareholders or recent shareholders of Faroe, or any person interested or recently interested in Faroe Shares, having any connection with or dependence on or which is conditional on the outcome of the Final Offer as detailed in Rule 16.2 or Rule 24.6 of the Code (of which there were none provided for in the First Offer Document);
(m) the ultimate owner of any Faroe securities to be acquired pursuant to the Final Offer as detailed in Rule 24.9 of the Code;
(n) any indemnities, dealing arrangements, option arrangements or other arrangements which may be an inducement to deal or to refrain from dealing as detailed in Note 11 on the definition of acting in concert and Rule 24.13 of the Code (of which there were none provided for in the First Offer Document); and
(o) any fees and expenses expected to be incurred by DNO in connection with the Final Offer as detailed in Rule 24.16 of the Code.
4.3 Set out in this paragraph 4.3 are details of the material changes that have occurred following the publication of the First Offer Document on 12 December 2018 in relation to the matters set out in Rule 27.2(b) of the Code.
(a) Interests and dealings in relevant securities by, amongst others, DNO, the DNO Responsible Persons and persons acting in concert with DNO, as detailed in Rule 24.4 of the Code:
- (i) As at the Latest Practicable Date, the interests of DNO in Faroe Shares were as follows:

			Interest in
		Number of	Faroe issued
Name	Nature of interest	Faroe Shares	share capital
DNO	Beneficial owner	114,288,128	30.6%

(ii) The following dealings in relevant securities of Faroe by DNO and persons acting in concert with DNO have taken place during the period commencing 26 November 2017 (the date 12 months prior to the date of commencement of the Offer Period) and ending on the Latest Practicable Date:

Name	Date	Nature of dealing	Nature of interest	Number of Faroe Shares	Price per Faroe Share (pence)
DNO	4 April 2018	Purchase	Beneficial owner	56,355,825	125.0
DNO	4 April 2018	Purchase	Beneficial owner	36,660,000	125.0
DNO	5 April 2018	Purchase	Beneficial owner	8,487,838	125.0
DNO	13 April 2018	Purchase	Beneficial owner	3,744,203	125.0
DNO	17 December 2018	Purchase	Beneficial owner	166,053	152.0
				36,908	151.8
				300,000	151.7
				155,113	151.6
				200,000	151.4
				44,886	151.2
				11,772	151.0
DNO	18 December 2018	Purchase	Beneficial owner	24,125	151.8
DNO	19 December 2018	Purchase	Beneficial owner	7,898	151.8
				496,908	152.0
DNO	20 December 2018	Purchase	Beneficial owner	4,802,489	152.0
DNO	3 January 2019	Purchase	Beneficial owner	2,136,145	152.00
				35,075	151.80
				136,820	151.60
				34,597	151.40
				66,587	151.00
				10,000	150.60
				1,996	150.40
				249,498	148.00
				10,000	147.98
				46,772	147.80
				20,467	147.60
				22,153	147.40
				10,000	147.20
				14,000	147.00

5. BASES OF CALCULATIONS AND SOURCES OF INFORMATION

5.1 The value attributed to the fully diluted share capital of Faroe is based upon the 372,889,693 Faroe Shares in issue on 26 November 2018 plus 28,148,753 Faroe Shares under award under the Faroe Share Schemes (which assumes full vesting of all outstanding share awards). The issued share capital includes 2,757,088 Faroe Shares which were acquired by Faroe's Employee Benefit Trust on 29 May 2018. If all of these Faroe Shares are used to satisfy share options and awards, the number of Faroe Shares to be issued under the Faroe Share Schemes will be reduced accordingly. DNO holds 114,288,128 Faroe Shares. The number of Faroe Shares under option or award reflects information provided by Faroe to DNO dated 3 December 2018. On the basis of the information provided, all options are nil-cost options and matching shares.
5.2 The market prices of the Faroe Shares are the closing middle market quotations as derived from the Daily Official List.
5.3 The International Securities Identification Number for Faroe Shares is GB0033032904.
5.4 For the purposes of the financial comparisons contained in this Document, no account has been taken of any liability to taxation.
5.5 Unless otherwise stated:
(a) the financial information relating to DNO has been extracted or derived (without material adjustment) from the audited annual report and accounts for DNO for the year ended 31 December 2017 and from the announcement of DNO's third quarter interim results for the nine months ended 30 September 2018 (which are unaudited); and
(b) the financial information relating to Faroe has been extracted or derived (without material adjustment) from Faroe's Annual Report 2017 and from the announcement of Faroe's Interim Results 2018.
5.6 Unless otherwise stated, all prices for Faroe Shares have been derived from the Daily Official List of the London Stock Exchange and represent the Closing Price on the relevant date.
5.7 Certain figures included in this Document have been subject to rounding adjustments.
5.8 Figures in pounds sterling have been converted into US dollars at a spot rate of 1.2757 as quoted on Bloomberg at 16.30 (London time) on the Latest Practicable Date.

6. FINANCING ARRANGEMENTS AND CASH CONFIRMATION

6.1 All of the consideration payable by DNO under the terms of the Final Offer will be provided as described in paragraph 7 of the letter from DNO contained in Part I of this Document.
6.2 Lambert Energy Advisory Ltd is satisfied that the resources available to DNO are sufficient to satisfy in full the cash consideration payable to Faroe Shareholders under the terms of the Final Offer.

7. GENERAL

7.1 The Financial Advisers have given and not withdrawn their written consents to the issue of this Document with the inclusion of the references to its name in the form and context in which they appear.
7.2 Save as disclosed in this Document, no agreement, arrangement or understanding (including any compensation arrangement) exists between DNO or any person acting or presumed to be acting in concert with it and any of the DNO Responsible Persons or recent directors, shareholders or recent shareholders of Faroe having any connection with, or dependence upon, the Final Offer.
7.3 Save as disclosed in this Document, there is no agreement, arrangement or understanding whereby the beneficial ownership of any of the Faroe Shares to be acquired by DNO pursuant to the Final Offer will be transferred to any other person, save that DNO reserves the right to transfer any such Shares to any member of the DNO Group.
7.4 Save as disclosed in this Document, DNO is not party to any agreement or arrangement which relates to the circumstances in which it may or may not invoke or seek to invoke a condition to the Final Offer.

8. DOCUMENTS AVAILABLE FOR INSPECTION

8.1 Copies of the following documents will be published on DNO's website at https://www.dno.no/en/investorrelations/offer_announcement_26November until the end of the Offer Period:
(a) this Document and the Final Form of Acceptance;
(b) the First Offer Document and the First Form of Acceptance;
(c) the Offer Announcement, the Mandatory Offer Announcement and the Final Offer Announcement;
(d) the Articles of Association of DNO;
(e) the consent letters referred to in paragraph 7 of Appendix III of the First Offer Document;
(f) the audited consolidated financial statements of the Faroe Group for the two years ended 31 December 2017 and 31 December 2016;
(g) the audited consolidated financial statements of the DNO Group for the two years ended 31 December 2017 and 31 December 2016;
(h) the documents incorporated by reference (in accordance with Rule 24.15) in Appendix II of the First Offer Document;
(i) the article published by Dow Jones referring to an interview with Graham Stewart on 18 June 2003 referred to in paragraph 3 of Part I of the First Offer Document;
(j) Faroe's announcement dated 26 November 2018 referred to in sub-paragraph 2 of paragraph 3 of Part I of the First Offer Document;
(k) Faroe's press release relating to the swap deal Faroe entered into with Equinor ASA dated 5 December 2018 referred to in sub-paragraph 4 of paragraph 3 of Part I of the First Offer Document;
(l) Faroe's company presentation dated June 2018 referred to in sub-paragraph 4 of paragraph 3 of Part I of the First Offer Document;
(m) Equinor's press release regarding the Njord area dated 5 December 2018 referred to in sub-paragraph 4 of paragraph 3 of Part I of the First Offer Document;
(n) Faroe's company presentation dated March 2017 referred to in sub-paragraph 5 of paragraph 3 of Part I of the First Offer Document;
(o) Faroe's presentation dated 29-30 October 2018 referred to in sub-paragraph 5 of paragraph 3 of Part I of the First Offer Document;
(p) the publicly available maps from the Norwegian Petroleum Directorate referred to in sub-paragraph 5 of paragraph 3 of Part I of the First Offer Document;
(q) Faroe's notice of interim results, dated 18 September 2018, referred to in 5.2 of the letter from DNO contained in Part I of the First Offer Document;
(r) operational updates and presentations by Faroe in November and December 2018 referred to in paragraph 5.2 of the letter from DNO contained in Part I of the First Offer Document;
(s) DNO's announcement dated 2 January 2019 responding to announcements by Faroe, referred to in paragraph 4 of Part I of this Document;
(t) the Independent Expert's Report on the Oil and Gas Assets of Faroe Petroleum plc, dated 12 December 2018, referred to in paragraph 4 of Part I of this Document;
(u) Norwegian Petroleum Directorate announcement entitled "Ready for Oda start-up" covering the estimated reserves in Oda on 7 January 2019, referred to in paragraph 4 of Part I of this Document;
(v) Cassidy Exploration well result announced on 27 December 2018, referred to in paragraph 6.2 of Part I of this Document; and
(w) results of the Brasse East Exploration well and the Brasse appraisal side-track announced on 2 January 2019, referred to in paragraph 6.2 of Part I of this Document.

APPENDIX IV DEFINITIONS

Any references to parts of the First Offer Document and/or First Form of Acceptance in this Document shall be construed in accordance with paragraph 3 of Part B of Appendix I of this Document and not this Appendix IV.

Subject to the foregoing, unless the context otherwise requires, the definitions and rules of interpretation used in the First Offer Document shall also apply in this Document, save as amended or supplemented (as the case may be) by the following:

Condition	means the condition to the Final Offer set out in Part A of Appendix I of this Document;
Document	means (except in Part B of Appendix 1) this document, including all of its parts, schedules and appendices;
Final Closing Date	means 1.00 p.m. (London time) on 23 January 2019;
Final Form of Acceptance	means the form of acceptance and authority relating to the Final Offer which accompanies this Final Offer Document, which may only be completed by holders of Faroe Shares in certificated form;
Final Offer	means the cash offer made by DNO at 160 pence per Faroe Share to acquire the entire issued and to be issued share capital of Faroe subject to the Condition and further terms set out in this Document and the First Offer Document (as amended by the Mandatory Offer Announcement and this Document) and, in the case of Faroe Shares held in certificated form, the Forms of Acceptance, including, where the context requires, any subsequent revision, variation, extension or renewal of such offer;
Final Offer Announcement	means the announcement dated 8 January 2019 announcing the Final Offer;
Final Offer Document	means this Document;
First Form of Acceptance	means the form of acceptance and authority relating to the Offer which accompanied the First Offer Document, which may only be completed by holders of Faroe Shares in certificated form;
First Offer Document	means the offer document dated 12 December 2018 sent to Faroe Shareholders and, for information only, to persons with information rights and participants in Faroe Share Schemes, in respect of the Offer;
Form of Acceptance	means the First Form of Acceptance and/or the Final Form of Acceptance, as applicable (and "Forms of Acceptance" shall mean both of them);
Latest Practicable Date	means 7 January 2019, being the latest practicable date prior to the publication of this Document;
Mandatory Offer Announcement	means the announcement dated 3 January 2019 announcing that the Offer had become a mandatory offer in accordance with Rule 9 of the Code;
Offer	means the cash offer made by DNO at 152 pence per Faroe Share to acquire the entire issued and to be issued share capital of Faroe not already owned by DNO subject to the conditions and further terms set out in the First Offer Document and, in the case of Faroe Shares held in certificated form, the First Form of Acceptance, including, where the context requires, any subsequent revision, variation, extension or renewal of such offer by way of the Mandatory Offer Announcement and this Document (and which shall include the Final Offer); and
Offer Announcement	means the announcement dated 26 November 2018 announcing the Offer.

AI assistant

DNO ASA — M&A Activity 2019

3580_rns_2019-01-14_640b3650-1a64-41ed-a0a6-39995a4452a2.pdf

THIS FINAL OFFER DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

IMPORTANT NOTICES

OVERSEAS JURISDICTIONS

NOTICE TO US FAROE SHAREHOLDERS

FORWARD-LOOKING STATEMENTS

IMPORTANT NOTICES

NO PROFIT FORECASTS OR QUANTIFIED BENEFITS STATEMENT

ROUNDING

ELECTRONIC COMMUNICATIONS

PUBLICATION ON WEBSITE AND AVAILABILITY OF HARD COPIES

DEALING DISCLOSURE REQUIREMENTS

IMPORTANT NOTICES

TO ACCEPT THE FINAL OFFER:

DNO ASA

CASH OFFER FOR FAROE BY DNO

1. INTRODUCTION

2. THE FINAL OFFER

for each Faroe Share 160 pence in cash

3. FINAL CLOSING DATE FOR THE FINAL OFFER

4. BACKGROUND TO AND REASONS FOR THE FINAL OFFER

5. INFORMATION RELATING TO DNO

5.1 Business description

5.2 Current trading and prospects

5.3 Financial effects of the Final Offer

6. INFORMATION RELATING TO FAROE

6.1 Business description

6.2 Current trading and prospects

7. FINANCING OF THE FINAL OFFER

8. INTENTIONS OF DNO FOR THE MANAGEMENT, EMPLOYEES AND LOCATIONS

9. EXISTING RIGHTS AND PENSIONS

10. FAROE SHARE SCHEMES

11. TIME PRO-RATING

12. DISCLOSURE OF INTERESTS IN FAROE RELEVANT SECURITIES

13. UK TAXATION

13.1 UK taxation of chargeable gains

13.2 UK Stamp Duty and SDRT

14. OVERSEAS SHAREHOLDERS

15. PROCEDURE FOR ACCEPTANCE OF THE FINAL OFFER

(a) To accept the Final Offer

(b) Completing the Form of Acceptance

(c) To accept the Final Offer in respect of less than all of your Faroe Shares held in certificated form

(d) Return of Form of Acceptance

(e) Share certificates not readily available or lost

(f) Validity of acceptances

OFFEREE SHARES HELD IN UNCERTIFICATED FORM (I.E. IN CREST)

(g) General

(h) To accept the Final Offer

(i) Validity of acceptances

(j) Overseas shareholders

GENERAL

16. SETTLEMENT

(a) Faroe Shares in certificated form (i.e. not in CREST)

(b) Faroe Shares in uncertificated form (i.e. in CREST)

(c) General

17. DELISTING AND COMPULSORY ACQUISITION

The cancellation of admission to trading of the Faroe Shares on AIM would significantly reduce the liquidity and marketability of any Faroe Shares not assented to the Final Offer at that time.

18. FURTHER INFORMATION

19. DIVIDENDS

20. ACTION TO BE TAKEN

APPENDIX I CONDITION AND FURTHER TERMS OF THE FINAL OFFER

PART A CONDITION OF THE FINAL OFFER

PART B

FURTHER TERMS OF THE FINAL OFFER

APPENDIX II FINANCIAL INFORMATION

FINANCIAL INFORMATION RELATING TO FAROE

FINANCIAL INFORMATION RELATING TO DNO

NO INCORPORATION OF WEBSITE INFORMATION

APPENDIX III

ADDITIONAL INFORMATION

1. RESPONSIBILITY

2. RESPONSIBLE PERSONS

3. MARKET QUOTATIONS

4. NO MATERIAL CHANGES

5. BASES OF CALCULATIONS AND SOURCES OF INFORMATION

6. FINANCING ARRANGEMENTS AND CASH CONFIRMATION

7. GENERAL

8. DOCUMENTS AVAILABLE FOR INSPECTION

DNO ASA M&A Activity 2019