DNO ASA — M&A Activity 2019

Jan 8, 2019

Increased and final cash offer for Faroe Petroleum plc by DNO ASA

Increased and final cash offer for Faroe Petroleum plc by DNO ASA

Not for release, publication or distribution, in whole or in part, in or into

any jurisdiction where to do so would constitute a violation of the relevant

laws of such jurisdiction

Oslo, 8 January 2019 - DNO ASA ("DNO"), the Norwegian oil and gas operator,

today announces an increased and final cash offer of 160 pence for each Faroe

Share. The consideration under the Final Offer implies a value of approximately

£641.7 million for the fully diluted share capital of Faroe, including shares

already held by DNO.

The full release can be accessed at the following link:

https://www.dno.no/en/investor-relations/offer_announcement_26November/

Enquiries:

DNO ASA

Media: media@dno.no

Investors: ir@dno.no

Tel: +47 911 57 197

Brunswick

Patrick Handley

Charles Pretzlik

William Medvei

Tel: +44 20 7404 5959

Lambert Energy Advisory Limited

Philip Lambert

David Anderson

Tel: +44 20 7491 4473

Pareto Securities AS

Petter Sagfossen

Tel: +47 22 87 87 48

Further information

This stock exchange notice and the information included herein are subject to

the disclosure requirements pursuant to section 5-12 of the Norwegian Securities

Trading Act

Defined terms used but not defined in this announcement have the meanings given

in the First Offer Document, as amended and supplemented by the Mandatory Offer

Announcement unless the context requires otherwise.

This announcement is not intended to and does not constitute, or form part of,

an offer, invitation or the solicitation of an offer to purchase, otherwise

acquire, subscribe for, sell or otherwise dispose of any securities, or the

solicitation of any vote or approval in any jurisdiction, pursuant to the Final

Offer or otherwise, nor shall there be any sale, issuance or transfer of

securities of Faroe in any jurisdiction in contravention of applicable law. The

Final Offer will be made solely by means of the Final Offer Document and (in

respect of Faroe Shares held in certificated form) the Final Form of Acceptance

accompanying the Final Offer Document, which will, together, contain the full

terms and conditions of the Final Offer including details of how it may be

accepted. Any decision in respect of, or other response to, the Final Offer

should be made only on the basis of the information contained in the Final Offer

Document and the Final Form of Acceptance (read in conjunction with the First

Offer Document and First Form of Acceptance).

Please be aware that addresses, electronic addresses and certain other

information provided by Faroe Shareholders, persons with information rights and

other relevant 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 of the Code to comply with Rule 2.11 of the Code.

Lambert Energy Advisory Limited, which is authorised and regulated in the UK by

the FCA, is acting exclusively for DNO and no-one else in connection with the

Final Offer and will not be responsible to anyone other than DNO for providing

the protections afforded to clients of Lambert Energy Advisory Limited nor for

providing advice in relation to the Final Offer or any other matters referred to

in the Final Offer Document, this announcement or otherwise.

Pareto Securities AS is acting exclusively for DNO and no-one else in connection

with the Final Offer and will not be responsible to anyone other than DNO for

providing the protections afforded to clients of Pareto Securities AS nor for

providing advice in relation to the Final Offer or any other matters referred to

in the Final Offer Document, this announcement or otherwise.

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.

Further details in relation to Overseas Shareholders are contained in the Final

Offer Document.

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 announcement 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 announcement 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 announcement and formal 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 the Final Offer 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 US tender

offer rules provided by Rule l4d-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. If the Final Offer is instead implemented by means of

a scheme of arrangement as provided for under English law it will not be subject

to the tender offer rules of the US Exchange Act. Accordingly, the Final Offer

would be subject to disclosure requirements and practices applicable in the UK

to schemes of arrangement which differ from the disclosure requirements of US

tender offer rules.

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 announcement (including information incorporated by reference in this

announcement), 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 forward-looking

statements. The forward-looking statements contained in this announcement

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, 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

announcement 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 forward-looking statements,

whether as a result of new information, future events or otherwise.

No profit forecasts or quantified benefits statement

No statement in this announcement is intended as a profit forecast, profit

estimate or qualified benefits statement and no statement in this announcement

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.

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 10(th) business day following the commencement of the offer

period and, if appropriate, by no later than 3.30 p.m. (London time) on the

10(th) 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.

Publication on website and hard copies

A copy of this announcement 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/investor-relations/offer_announcement_26November. For the

avoidance of doubt, the contents of such website are not incorporated into and

do not form part of this announcement.

You may request a hard copy of this announcement 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 announcement in electronic form, copies of

this announcement and any document or information incorporated by reference into

this announcement will not be provided unless such a request is made.

About DNO

DNO is a Norwegian oil and gas operator focused on the Middle East and North

Sea. Founded in 1971 and listed on the Oslo Stock Exchange, DNO holds stakes in

onshore and offshore licences at various stages of exploration, development and

production in the Kurdistan region of Iraq, Norway, the UK and Yemen.