DNO ASA — M&A Activity 2021

Feb 11, 2021

DNO Increases Stake in Kurdistan's Baeshiqa License; Prepares to Step Up Operations

DNO Increases Stake in Kurdistan's Baeshiqa License; Prepares to Step Up Operations

Oslo, 11 February 2021 - DNO ASA, the Norwegian oil and gas operator, today

announced the acquisition of ExxonMobil's 32 percent interest in the Baeshiqa

license in the Kurdistan region of Iraq, doubling DNO's operated stake to 64

percent (80 percent paying interest), pending government approval. The Company

plans to continue an exploration and appraisal program on the license while fast

tracking early production from existing wells in 2021.

DNO has already demonstrated proof of concept of producing through temporary

test facilities, having delivered 15,000 barrels of 40(o) API oil and 22(o) API

oil for export from the Baeshiqa-2 and Zartik-1 wells, respectively.

In November 2019 DNO issued a notice of discovery on the Baeshiqa license after

flowing hydrocarbons from several Jurassic and Triassic zones to surface in the

3,204 meters (2,549 meters TVDSS) Baeshiqa-2 exploration well. Following acid

stimulation, the zone flowed variable rates of light oil and sour gas. Two zones

flowed naturally at rates averaging over 3,000 barrels of oil per day (bopd) of

light gravity oil each and another averaged over 1,000 bopd also of light

gravity oil. Subsequent analyses on surface samples collected during testing

confirm that the Triassic reservoirs contain saturated oil with a gas cap.

An exploration well was completed in 2020 on a second structure (Zartik) some

15 kilometers southeast of the Baeshiqa-2 discovery well. The 3,021 meters

(2,322 meters TVDSS) well tested hydrocarbons to surface from several Jurassic

zones, with the uppermost zone flowing naturally at rates averaging over 2,000

bopd of medium gravity oil.

The Company currently estimates gross license contingent recoverable resources

from three of the tested zones in the two wells ranging from 12 million barrels

of oil (mmbbls) (1C) to 156 mmbbls (3C), with a 2C volume of 43 mmbbls.

"By increasing our stake in the Baeshiqa license now, we demonstrate our belief

in its ultimate potential," said Bijan Mossavar-Rahmani, DNO's Executive

Chairman. "Following the stabilization of oil prices and export payments in

Kurdistan, DNO is stepping up spending on new opportunities," he added.

DNO acquired its first 32 percent interest from ExxonMobil and assumed

operatorship of the Baeshiqa license in 2018.

The 324 square kilometer license is situated 60 kilometers west of Erbil and 20

kilometers east of Mosul. The license contains two large structures, Baeshiqa

and Zartik, which have multiple independent stacked target reservoir systems,

including in the Cretaceous, Jurassic and Triassic. The remaining partners in

the license include TEC with a 20 percent paying (16 percent net) interest and

the Kurdistan Regional Government with a 20 percent carried interest.

In addition to the Baeshiqa license, DNO also operates the Tawke license

containing the Tawke and Peshkabir fields in Kurdistan. Gross operated

production from the Tawke license averaged 110,300 bopd in 2020.

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For further information, please contact:

Media: media@dno.no

Investors: investor.relations@dno.no

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

North Sea. Founded in 1971 and listed on the Oslo Stock Exchange, the Company

holds stakes in onshore and offshore licenses at various stages of exploration,

development and production in the Kurdistan region of Iraq, Norway, the United

Kingdom, Netherlands, Ireland and Yemen.

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.