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Corporate Presentation DNO International ASA Important notice This - - PowerPoint PPT Presentation

Corporate Presentation DNO International ASA Important notice This presentation (the Presentation) has been prepared and delivered by DNO International ASA (DNO or the Company) . The Presentation and its contents is strictly


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Corporate Presentation DNO International ASA

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Corporate Presentation

Important notice

This presentation (the “Presentation”) has been prepared and delivered by DNO International ASA (“DNO” or the “Company”). The Presentation and its contents is strictly confidential and may not be reproduced or redistributed, in whole or in part, to any other person than the intended recipient. The Presentation is prepared for discussion purposes only. It does not constitute, and should not be construed as, any offer or invitation or recommendation to buy or sell any of the securities mentioned or described herein. The Presentation contains certain forward-looking statements relating to the business, financial performance and results of the Company and/or industry and markets in which it

  • perates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words “believes”,

“expects”, “predicts”, “intends”, “projects”, “plans”, “estimates”, “aims”, “foresees”, “anticipates”, “targets”, and similar expressions. Any forward-looking statements and other information contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources are solely opinions and forecasts based on the current expectations, estimates and projections of the Company or assumptions based on information currently available to the Company, which are subject to risks, uncertainties and

  • ther factors that may cause actual events to differ materially from any anticipated development. Neither the Company, nor any of its subsidiary undertakings or any such person’s
  • fficers or employees provides any assurance that the assumptions underlying such forward-looking information and statements. are free from errors nor does any of them accept any

responsibility for the future accuracy of the opinions expressed in this Presentation or the actual occurrence of the forecasted developments. The Company assumes no obligation, except as required by law, to update any forward-looking statements or to conform these forward-looking statements to our actual results. Any investment involves risks, and several factors could cause the actual results, performance or achievements of the Company as described herein to be materially different from any future results, performance or achievements that may be expressed or implied by statements and information in this Presentation, including, among others, risks or uncertainties associated with the Company’s business, segments, development, growth management, financing, market acceptance and relations with customers. More generally an investment will involve risks related to general economic and business conditions, changes in domestic and foreign laws and regulations, taxes, changes in competition and pricing environments, fluctuations in currency exchange rates and interest rates and other factors. Should one or more of such risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this Presentation. This Presentation has not been reviewed or registered with any public authority, stock exchange or regulated market place. The distribution of this Presentation and any offering, subscription, purchase or sale of securities issued by the Company in certain jurisdictions is restricted by law, including (but not limited to) USA, Canada, Japan, Australia and Hong

  • Kong. Persons into whose possession this Presentation may come are required to inform themselves about and to comply with all applicable laws and regulations in force in any

jurisdiction in or from which it invests or receives or possesses this Presentation and must obtain any consent, approval or permission required under the laws and regulations in force in such jurisdiction. The shares of the Company have not and will not be registered under the U.S. Securities Act or any state securities laws, and may not, except pursuant to an applicable exemption, be offered or sold within the United States, or to the account or benefit of U.S. Persons. By receiving this Presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and the relevant securities and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of any relevant investments. This Presentation contains information which has been sourced from third parties believed to be reliable, but without independent verification. Neither DNO nor its advisors makes any undertaking, representation or warranty (express or implied) as to the accuracy or completeness of the information (whether written or oral and whether or not included in this Presentation) concerning the matters described herein. Neither DNO nor any of its advisors accepts any liability whatsoever as to any errors, omissions or misstatements contained herein and, accordingly, neither DNO or its advisers, nor any of their parent or subsidiary undertakings or any such person’s affiliates, officers, employees, accepts any liability whatsoever arising directly or indirectly from the use of this Presentation or the information included herein. The Presentation speaks and reflects prevailing conditions and views as of 20 March 2014. It may be subject to corrections and change at any time without notice. DNO does not intend to, and neither the delivery of this Presentation nor any further discussions of the Company with any recipient shall, under any circumstances, not create any implication that the Company assumes any obligation to update or correct the information herein, nor any implication that there has been no change in the affairs of the Company since such date. Slide 2

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Corporate Presentation

Asset Overview

  • 1. Introduction
  • 2. Development
  • 3. Exploration & Appraisal
  • 4. Summary

Contents

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Corporate Presentation

Diversified portfolio - 20 blocks in six countries

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KURDISTAN REGION OF IRAQ TUNISIA UAE, OMAN, YEMEN & SOMALILAND

  • 3 blocks
  • 467 MMbbls 2P reserves CWI*
  • 24,527 bopd production CWI**
  • 14 blocks
  • 53 MMboe 2P reserves CWI*
  • 14,463 boepd production CWI**
  • 3 blocks
  • Multiple discoveries to be appraised
  • Additional exploration potential

* DeGolyer and MacNaughton reserve estimate as at 31/12/12 ** 2013 reported CWI production Producing block Appraisal / development block Exploration block

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Corporate Presentation

Delivering reserves at a low unit cost

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Low F&D costs (No 1 globally)

100 200 300 400 500 600

2009 2010 2011 2012

149 194 372 520

CAGR: 52%

Significant 2P reserves base (CWI)

5 10 15 20 25

DNO Global large E&P Global all Global mid E&P Global integrated Global small E&P

$ per boe

Source: company data, JS Herold

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SLIDE 6

Corporate Presentation

Material production base (CWI)

4 355 3 975 3 786 3 522 13 374 10 064 10 948 8 610 11 332 24 682 38 045 23 765 10 000 20 000 30 000 40 000 50 000 60 000

29 061 38 720 52 780 35 896

CWI boepd Slide 6

Q4 2013 Q1 2013 Q2 2013 Q3 2013

2013 full year average 39,170 boepd 2012 full year average 38,354 boepd 2013 quarterly production

4,143 28,466 5,745 3,907 10,736 24,527 Kurdistan Oman Yemen Kurdistan Oman Yemen

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SLIDE 7

Corporate Presentation

  • Investments funded by operating cash flow
  • Revenue growth on higher production
  • Q4 impairment charges reduced profits

Strong financial performance

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500 1 000 1 500 2 000 2 500 3 000

2009 2010 2011 2012 2013

869 1 252 2 070 2 842 2 967

200 400 600 800 1 000 1 200 1 400 1 600 1 800 2 000

2009 2010 2011 2012 2013

30 380 1 322 1 900 1 696

  • 200

200 400 600 800 1 000 1 200 1 400 1 600

2009 2010 2011 2012 2013

  • 179

157 658 1 417 580 899

Revenues Netback Operating profit

NOK million NOK million NOK million Impact of 2013 impairment charges

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Corporate Presentation

Increasing investments

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500 1 000 1 500 2 000 2 500 3 000 2010 2011 2012 2013 2014E NOK million Development Exploration

  • Continue to invest to grow
  • 2013 investments of NOK 1,756

million

  • 2014 planned investments of NOK

2,700 million (of which exploration NOK 600 million and development NOK 2,100 million)

  • Expect expenditures to continue to

be funded from operating cash flow

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Corporate Presentation

200 400 600 800 1 000 1 200 1 400 1 600 1 800

2009 2010 2011 2012 2013 303 1 385 1 645 1 508 1 618

  • 500
  • 400
  • 300
  • 200
  • 100

100 200 300 400 500

2009 2010 2011 2012 2013 1482 428

  • 3
  • 183
  • 216

Net debt/cash Cash position Equity ratio

NOK million 0 % 10 % 20 % 30 % 40 % 50 % 60 % 2009 2010 2011 2012 2013 36 % 39 % 43 % 55 % 57 %

Robust capital structure

NOK million Percent Slide 9

  • Strong financial position
  • Capacity to execute work program and capitalize on new opportunities
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SLIDE 10

Corporate Presentation

Asset Overview

  • 1. Introduction
  • 2. Development
  • 3. Exploration & Appraisal
  • 4. Summary

Contents

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Corporate Presentation

Dohuk

  • Appraisal and development of the Benenan

and Bastora heavy oil fields

  • High volume upside potential

Erbil 2

  • Development of gas discovery underway –

will help displace diesel as a fuel in local power generation

  • Heavy oil potential

3 Tawke 1

DNO in the Kurdistan region of Iraq

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1 2 3

  • Work programme to double production

capacity to 200,000 bopd (gross)

  • Horizontal wells transforming outlook
  • Significant E&A upside
  • Peskhabir discovery also on block
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Corporate Presentation

Horizontal drilling activity at Tawke

  • Horizontal drilling is a field wide initiative
  • Tawke-20, Tawke-21, Tawke-22 and Tawke-23 producing
  • Tawke-24 and Tawke-26 drilling
  • Tawke-25 location confirmed, Tawke-27 and Tawke-28 locations being finalized

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Vertical well Horizontal well

Cretaceous well distribution

Tawke -22 (testing) Tawke -20 (producing) Tawke -26 (drilling) Tawke -24 (drilling) Tawke -23 (producing) Tawke -21 (testing) Tawke -25

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Corporate Presentation

  • Horizontal drilling is expected to

take wellhead capacity from 155,000 bopd to 270,000 bopd by yearend

  • Two Tertiary wells also planned in

2014

  • Tertiary and Jurassic reservoirs

supplement Cretaceous production potential

50 000 100 000 150 000 200 000 250 000 300 000 End 2012 End 2013 End 2014

Gross wellhead capacity bopd

Continuing to grow wellhead capacity at Tawke

Projected

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Corporate Presentation

Facilities expansion at Tawke

  • Connected to new Kurdistan export pipeline at Fish Khabur
  • Set new single day record for field production of 129,000 barrels (pipeline and

tanker deliveries)

  • Utilize early production packages to double facilities capacity to 200,000 bopd

at end 2014

  • New 24 inch pipeline to supplement existing 12 inch pipeline, significantly

increasing transportation capacity

  • Current facilities capacity 100,000 bopd
  • Planned increase to 200,000 bopd
  • Truck loading station
  • Pumping station
  • Storage facilities
  • Truck loading station
  • Tie-in to KRG export

system

  • Tie-in to federal export

system

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Corporate Presentation Slide 15

Summail -2 well site Summail -1 well site Summail -3 well site Sena Village Access road CPF Trunkline Manifold to CPF Camp location Access road DOHUK ERBIL Afreke Village

Progress at the Dohuk license

Dohuk

  • Completed and tested Summail-1 well; Summail-3 well now drilling and Summail-2 well to spud in

second quarter

  • Initial deliveries of 30-50 million cubic feet per day (MMcfd) in first quarter following trunkline

commissioning

  • Deliveries to ramp up to 100-120 MMcfd as new wells and processing capacity added
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Corporate Presentation

Bastora-2 Bastora-1 Erbil-2 Hawler-1 Benenan-3 Benenan-4

Top Najmeh reservoir time map

2.5 km

Benenan field Bastora field

Progress at the Erbil license

Erbil

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  • Benenan-4 well drilled as both appraisal and production well
  • Proved up oil outside mapped closure in several Najmeh

intervals

  • Expect material uplift in oil-in-place volumes
  • Temporary production facilities installed at Benenan-3 and

Bastora-2 wells and initiated test production

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Corporate Presentation

Asset Overview

  • 1. Introduction
  • 2. Development
  • 3. Exploration & Appraisal
  • 4. Summary

Contents

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Corporate Presentation Slide 18

Progress across the wider portfolio

  • Continue to de-risk, high grade and actively manage the portfolio
  • Completed acquisition of interest in Sfax and Ras El Besh offshore Tunisia
  • Acquired Block SL18 in Somaliland and farmed down to 60 percent
  • Added Block 36 in Oman and Block 84 in Yemen
  • Active 2014 program across full portfolio with plans to acquire 1,500 km of 2D

seismic and 1,410 km2 of 3D seismic and to spud 20 new wells

Producing block Appraisal / development block Exploration block

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Corporate Presentation

Prospective resources to be drilled in 2014

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2014 E&A Drilling Program Prospective Resources Targeted

Gross Un-risked DNO Interest MMbbls Percentage

Kurdistan

Peshkabir 225 55.00 Tawke Jurassic 150 55.00

Yemen

Salsala (BL 32) 7 38.95 SW Terrace (BL 43) 2 56.50 Gabdain (BL 72) 55 18.00

Oman

Paleozoic (BL 36) 100 75.00

Tunisia

Jawhara (Sfax) 30 87.50

2014 E&A wells

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Corporate Presentation

Peshkabir

  • Peshkabir-1 well discovered

moveable oil in the Jurassic

  • 200 km2 of new 3D seismic data

greatly improved imaging of northern and southern flanks of the structure

  • Significant bulk volume upside

potential

  • Formations below OWC at

Peshkabir-1 well could also offer additional up-dip potential

  • Peshkabir-1A well to spud in Q2

Peshkabir-1 Peshkabir-1A

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Corporate Presentation

Tawke Jurassic

  • Tawke-17 well confirmed oil in the Jurassic Sargelu interval which flowed

1,500 bopd of 26-28˚ API oil

  • Tawke-29 well to appraise potential extent of Jurassic reservoir

Tawke-17 discovery well Potential extent of Jurassic reservoir closure Map of deep exploration potential – top Jurassic

Slide 21

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Corporate Presentation

Yemen

  • Appraise Salsala oil discovery in 2014

(Salsala-1 well tested 5,900 bopd) Block 32 Block 43

  • Nabrajah-18 S2 side-track to test

Shuqra formation Block 72

  • Gabdain-3 well to test basement

prospectivity Block 84

  • Evaluation of new exploration block

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Corporate Presentation

Oman Block 36

  • Block 36 shares the

same petroleum systems as the prolific Rub al Khali Basin

  • Large closures mapped
  • n existing data
  • Majority of block in oil

window

  • Reprocessing of existing

2D seismic data underway with acquisition

  • f new seismic data

planned in 2014

  • First exploration well to

spud in late 2014

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Corporate Presentation

Tunisia – Sfax and Ras El Besh

  • Three existing discoveries with

estimated combined resources

  • f 35 to 60 MMbbls
  • Several exploration opportunities

have also been identified

  • Plan to drill Jawhara-3

exploration well in Q3 to test prospective upside

  • Play concept already

proved with Jawhara-1

  • il discovery

Jawhara-1 (1,500 bopd) Jawhara-2 Jawhara-3 4 km

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SLIDE 25

Corporate Presentation

Asset Overview

  • 1. Introduction
  • 2. Development
  • 3. Exploration & Appraisal
  • 4. Summary

Contents

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Corporate Presentation

An active drilling program

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2013 2014 2015 Q4 Q1 Q2 Q3 Q4 Q1

Kurdistan Rig-9 Rig-10 Rig-32 Sindy/other Yemen Rig-905 HTC Rig-6 Oman Noble DT Rig TBC Rig TBC Tunisia Rig TBC

Production / development well Exploration well Appraisal well Workover / completion

Benenan-4 Peshkabir-1A Tawke Tertiary-1 Tawke-25 Tawke-22 Summail-2 Tawke-27 Summail-1 Yaalen

  • 4S2

Salsala-1 Nabrajah

  • 18S/2

Salsala-2 Gabdain-3 West Bukha-5 Tawke – 29 (Jurassic) Benenan-5 Tawke-28 Summail-4 (gas) or -5 (oil) Tawke-21 Peshkabir-2 Salsala-3 Nabrajah-18S/2 West Bukha-6 Block 36 Jawhara-3 Tawke-24 Summail-3 Tawke-26 Tasour-28

Current

Tawke Tertiary-2

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SLIDE 27

Corporate Presentation

A full-cycle E&P company

Slide 27

Production Development Appraisal Exploration

  • Tawke Expansion (Kurdistan)
  • Summail gas (Kurdistan)
  • Benenan & Bastora

(Kurdistan)

  • Block 47 (Yemen)
  • Saleh (Ras Al Khaimah)
  • Tawke (Kurdistan)
  • Block 8 (Oman)
  • Block 32 (Yemen)
  • Block 43 (Yemen)
  • Block 53 Yemen
  • Sfax & Ras El Besh

(Tunisia)

  • Peshkabir (Kurdistan)
  • Tawke Deep Jurassic

(Kurdistan)

  • Summail heavy oil

(Kurdistan)

  • RAK B (Ras Al Khaimah)
  • Block 30 (Oman)
  • SL-18 (Somaliland)
  • Block 36 (Oman)
  • Block 84 (Yemen)
  • Tawke Footwall (Kurdistan)
  • Block 31 (Oman)
  • Block 32 (Yemen)
  • Block 72 (Yemen)
  • Hammamet (Tunisia)
  • FKIRINE (Tunisia)
  • RAK Onshore (Ras Al

Khaimah)

  • New asset in 2013

Key:

MENA focused opportunity set spanning the upstream asset life-cycle