DNO INTERNATIONAL ASA CAPITAL MARKETS DAY 2008

Transcription

1 DNO INTERNATIONAL ASA CAPITAL MARKETS DAY 2008

2 A CHANGING WORLD FOR THE E&P BUSINESS FACTORS INFLUENCING THE OIL AND GAS INDUSTRY Smaller discoveries Advanced technology Climate challenge A new geopolitical situation OPPORTUNITIES AND THREATS Growth in energy demand Increasing costs Constrained supply Nationalization of resources CAPITAL MARKETS DAY

3 THE GLOBAL RESOURCE SITUATION RESERVES IN THE WORLD 10% 62% 3% 5% 18% RESERVES IN THE MIDDLE EAST 15% 14% 13% 9% 36% 4% 12% N. America S. & C. America Europe & Eurasia Middle East Africa Asia Pacific Saudi Arabia Iran Iraq Kuwait UAE Other Source: BP Statistical Review 2007 CAPITAL MARKETS DAY

4 GLOBAL PRODUCTION IS PRODUCTION GROWTH MEETING INCREASE IN DEMAND? North America South and Central America Europe & Eurasia Middle East Africa Asia Pacific More than 30 percent of the global production from were produced in the Middle East Source: BP Statistical Review 2007 CAPITAL MARKETS DAY

5 INCREASING COSTS IN THE E&P INDUSTRY FD&A COST PER BARREL 30,0 Proved acquisition cost Finding and Development cost 22,5 USD 15,0 7,5 0 Source: J. S. Herold CAPITAL MARKETS DAY

6 GROWING INTO A FULL SCALE E&P COMPANY OIL PRICE DEVELOPMENT Work started in Kurdistan Market Cap 1996: USD 6 million Market Cap 2007: USD 1.4 billion TOTAL SHAREHOLDER RETURN DNO was acquired Increased interest in UK Acquired interest in Yemen Plan for Heather Re-entered the NCS Successful Broom appraisal Approval to act as operator on the NCS Divestment of UK and Norwegian assets Entered into Kurdistan Tawke oil discovery Production commenced from Tawke CAPITAL MARKETS DAY

7 OPERATIONAL ACHIEVEMENTS GROWTH IN CYCLES First cycle from 1996 until divestment of UK an NCS assets in 2003 Realized and returned values to shareholders Second cycle from 2003 with exploration focused strategy Restructured NCS in 2007 Beginning of the third cycle in 2008 RESERVES PRODUCTION CAPITAL MARKETS DAY

8 DNO IS WELL POSITIONED FOR GROWTH KEY ELEMENTS Build on past success to exploit Yemen potential Unique position in Kurdistan Region of Iraq Balanced license portfolio with substantial potential Highly skilled and experienced staff CAPITAL MARKETS DAY

9 DISCLAIMER: FORWARD LOOKING STATEMENT This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for DNO International ASA and DNO International ASA s (including subsidiaries and affiliates) lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as expects, believes, estimates or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for DNO s businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the Presentation. Although DNO International ASA believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. DNO International ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither DNO International ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use. This presentation was prepared for the April 3, 2008 Capital Markets Day presentations. Information contained within will not be updated. The following slides should be read and considered in connection with the information given orally during the presentation. CAPITAL MARKETS DAY

10 CAPITAL MARKETS DAY 2008 GLOBAL COMPETITION

11 COMPETING IN A GLOBAL ENVIRONMENT KEY ATTRIBUTES EXPLORATION DRIVEN STRATEGY With suitable risk mitigation ENTREPRENEURIAL COMPANY Quick decisions/risk taker OPERATING COMPANY Controlling the asset base FOCUS ON LOW COST/HIGH MARGINS Onshore fields desired basins VALUE CREATION

12 INTERNATIONAL PEER GROUP MARKET CAPITALIZATION AND RESERVES 10 Domestic Reserves International Reserves Tullow Oil Cairn Lundin Oil Soco International Maurel et Prom Premier Dana Venture DNO PA Resources Melrose Resources Revus Noreco Market capitalization (USD billion) CAPITAL MARKETS DAY

13 EXPLORATION DRIVEN COMPANY PROMOTE EXPLORATION PRODUCTION Market Value Acquire Explore Appraise Development commitment Develop and produce E&P Cycle CAPITAL MARKETS DAY

14 ADDING VALUE THROUGH THE DRILL BIT CLASS 1-5 RESERVES* DNO ANNUAL AVERAGE FD&A COST MBOE 60 USD/boe *Continued operations, excluding associated reserves CAPITAL MARKETS DAY

15 CONTROLLING OPERATIONS INTERNATIONALLY POSITIONING OF AN INTERNATIONAL E&P COMPANY DNO Operator Venture PA Resources Cairn Soco Muriel&Prom Lundin Premier Dana Noreco Tullow Partner Revus AIM Companies Domestic International CAPITAL MARKETS DAY

16 CONTROLLING THE PACE OF DEVELOPMENT PROJECT TIMING Tullow Uganda Nexen Buzzard Cairn India Tullow Ghana DNO Yemen DNO Iraq Number of Years CAPITAL MARKETS DAY

17 COST EFFICIENCY DRIVES RECYCLE RATIOS RECYCLE RATIO NETBACK PER BARREL Times USD CAPITAL MARKETS DAY

18 TOTAL SHAREHOLDER RETURN COMPOUND ANNUAL GROWTH RATE ( ) 109,0 87,2 65,4 Percent 43,6 21,8 0 DNO Lundin Oil Tullow Oil Cairn Venture Dana Soco Maurel et Prom Premier Melrose Resources CAPITAL MARKETS DAY

19 DISCLAIMER: FORWARD LOOKING STATEMENT This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for DNO International ASA and DNO International ASA s (including subsidiaries and affiliates) lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as expects, believes, estimates or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for DNO s businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the Presentation. Although DNO International ASA believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. DNO International ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither DNO International ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use. This presentation was prepared for the April 3, 2008 Capital Markets Day presentations. Information contained within will not be updated. The following slides should be read and considered in connection with the information given orally during the presentation. CAPITAL MARKETS DAY

20 DNO INTERNATIONAL ASA OPERATIONAL INTRODUCTION

21 DNO IN BRIEF PRESENT IN SEVEN COUNTRIES ON THREE CONTINENTS 500 staff 15 nationalities Corporate headquarter in Norway International offices in: London, UK Sana'a, Yemen Dubai, UAE Erbil, Northern Iraq Beira, Mozambique Photo from DNO Iraq AS international offices in Dubai, UAE CAPITAL MARKETS DAY

22 ORGANIZATION CORPORATE FUNCTIONS President and Managing Director Helge Eide Chief Operating Officer Ivar Brandvold Chief Financial Officer Haakon Sandborg Corporate Head of Exploration Tore Lilloe-Olsen QHSE Manager Ole-Andreas Isdahl Chief Petroleum Engineer Ole Nygaard Chief Geologist Ståle Monstad NEW VENTURES & UK/AFRICA Erik Syrdalen YEMEN Sven Erik Lie KURDISTAN Magne Normann Head office: Oslo Head office: Oslo Head office: Dubai CAPITAL MARKETS DAY

23 OUR MISSION DNO S KEY FOCUS IS TRANSFORMING RESOURCES TO RESERVES AT LOW COSTS. GOING FORWARD THE COMPANY WILL GROW PRODUCTION FROM AN INCREASING RESERVE BASE.

24 BUSINESS OVERVIEW UNITED KINGDOM 50 % in an exploration license 1 promote licenses NORWAY (PARTICIPATING INTEREST) 36.9 % equity interest in Det norske oljeselskap ASA SYRIA 19,9 % interest in block 6 EQUATORIAL GUINEA 5% interest in Block P (offshore) Development plan under consideration KURDISTAN REGION OF IRAQ Three PSC s signed March 2008 Tawke fast-track development Unique position in a frontier area YEMEN PSA Interests in 8 blocks Three producing licenses Large scale operation and strong position MOZAMBIQUE 80% WI in Inhaminga block Building up position in emerging area CAPITAL MARKETS DAY

25 OPERATIONAL HIGHLIGHTS KURDISTAN REGION OF IRAQ Appraisal and Development Tawke well T-12 completed; tested gross rate of 9,000 bopd Exploration Discovery in well Hawler-1 in Erbil PSC tested 9,000 bopd and 11MM scf/d gas in the Jurassic. Further testing in Jurassic and Cretaceous ongoing REPUBLIC OF YEMEN Appraisal and Development Strong production build up in Block 53, Bayoot/Hekma area: Well SW-4 producing, gross rate of 1,500 bopd and well SW-5 tested gross rate of 2,500 bopd Exploration Discovery in Block 47, Yaalen-1 well, testing mid-april Maleen-1 well in Block 32 completed, dry Dahgah-1 well in Block 43 completed, awaiting testing KURDISTAN REGION OF IRAQ REPUBLIC OF YEMEN CAPITAL MARKETS DAY

26 PRODUCTION UPDATE MONTHLY PRODUCTION* boe/day NCS Block 32 Block 43 Block 53 Tawke DNO PRODUCTION 2008 (JAN/FEB): Yemen: 10,691 bopd Kurdistan: 6,860 bopd Total 17,551 bopd DNO S PRODUCTION CAPACITY: Yemen: 12,000 bopd Kurdistan: 30,000 bopd** Total 42,000 bopd Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb *Working interest production net to DNO **Note: Subject to export CAPITAL MARKETS DAY

27 STRONG FOUNDATION FOR GROWTH KEY SUCCESS CRITERIA Combining the organizational talent Achieved strong organic growth through exploration: UK Heather area Yemen blocks 32, 53 and 43 Norway several fields and discoveries Equatorial Guinea block P development plan Kurdistan Tawke field Developed the company into a fast track full scale E&P company Strong operational track record offshore and onshore CAPITAL MARKETS DAY

28 DNO IS MAKING A DIFFERENCE REPUTATION AND ACCOUNTABILITY Attractive operator and partner COST EFFECTIVE AND FAST From discovery to production fast, safe and at low cost COMPETENCE Geological knowledge and operational experience LOCAL CONTENT Employees and services SAFE The strictest international HSE standards LEARNING AND ADAPTIVE Local cultures and business environments CAPITAL MARKETS DAY

29 OUR CSR FOUNDATION Corporate citizenship CSR Components Triple Bottom Line Corporate Governance Our corporate citizenship defines our role in local and global communities and how we strive to conduct business responsibly in a changing world Through our corporate citizenship we will reach our goal - a license to operate wherever we do business The CSR components reflect our stakeholders expectations and are our six key areas to focus on: Core values Social profile Environment Risk management Business ethics Our job is to optimize our triple bottom line, that is meeting economical, environmental and social demands of our most important stakeholders Our corporate governance shall ensure that the stakeholders expectations are met and is our tool to demonstrate and document compliance Code of conduct CAPITAL MARKETS DAY

30 GOING FORWARD EXPLORATION Build up prospect portfolio on existing assets Extensive exploration drilling Assess emerging areas POTENTIAL FOR STEP-CHANGE IN PRODUCTION DEVELOPMENT Mature new discoveries to production Fast-track, flexible and cost effective projects PRODUCTION Efficient operations Aggressive infill drilling

31 DISCLAIMER: FORWARD LOOKING STATEMENT This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for DNO International ASA and DNO International ASA s (including subsidiaries and affiliates) lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as expects, believes, estimates or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for DNO s businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the Presentation. Although DNO International ASA believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. DNO International ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither DNO International ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use. This presentation was prepared for the April 3, 2008 Capital Markets Day presentations. Information contained within will not be updated. The following slides should be read and considered in connection with the information given orally during the presentation. CAPITAL MARKETS DAY

32 DNO INTERNATIONAL ASA A LONG TERM SUCCESS STORY

33 YEMEN: A PROMISING OIL REGION A COUNTRY WITH POTENTIAL The search and exploration for oil in Yemen goes back to the 1930s Oil discovery in the summer of 1984, when Hunt Oil Company successfully drilled the wildcat well in the Marib Al-Jawf basin (Block 18) In 1991, significant oil discoveries were made on the Masilah block (Block 14) by Canadian Nexen Yemen statistics (reserves and production) The total number of oil blocks amount to 87 There are 13 production blocks operated by 11 oil companies 26 blocks are at the exploratory phases operated by 16 oil companies The oil in place in the producing blocks amount to 9.7 billion barrels. 2.3 billion barrels have already been produced CAPITAL MARKETS DAY

34 DNO ASSETS CAPITAL MARKETS DAY

35 DNO IN YEMEN 10 YEARS IN YEMEN Strong organization to handle exploration, field development and production Proud of the HSE history Good reputation and excellent cooperation with Ministry Already proved success in four of the eight participating blocks Strong record on drilling operations Four fast-track field developments 17,850 km 2 of exploration area and 3,100 km 2 of development area Historical backtrack gives confidence for future success DNO believes in a successful future in Yemen CAPITAL MARKETS DAY

36 HISTORICAL PRODUCTION STABLE PRODUCTION More than 38 MMbbl in ultimate reserves are proven net to DNO* from 1998 to Continuous appraisal drilling as well as successful exploration efforts have enabled DNO to add reserves at low cost From 2000, our Yemen operations have produced more than 77MMbbl, which gives 27 MMbbl, net to DNO* *Working interest Oil Production Rate (bopd) Nov Feb-01 +Godah +Nabrajah + Bl53 South +Sharyoof Tasour 01-May Aug Nov Feb May Aug Nov Feb May Aug Nov Feb May Aug Nov Feb May Aug Nov Feb May Aug Nov Feb May Aug Nov Feb-08 > 75 MMbbl CAPITAL MARKETS DAY

37 DISTRIBUTION OF VALUE BLOCK 32 AND 43 CASH-FLOW Yemen Minstry Cost oil to contractor Profit oil to contractor USD million 23% 30% 47% USD 456 million 16% 43% PSA ARRANGEMENTS Block 32 Produced per : 32,21 MMbbl Cumulative cash flow in total: USD million USD 613 million has been provided for the Yemen Government Block 43 Produced per : 6,95 MMbbl Cumulative cash flow in total: USD 456 million, USD 187 million has been provided for the Yemen Government TAX LEVEL Profit oil/(profit oil + Ministry oil) = 0,316 implying that 68,4% is tax 0 Block 32 Block 43 41% CAPITAL MARKETS DAY

38 Chronostrat. MASILA BASIN GEOLOGY Masila BasinTectonics Cretaceous Tertiary Early Cretaceous Late Cretaceous E. Pal. L. Palaeocene Early Eocene Middle Eocene L. Eocene E. Oligocene Hauterivian Barrem. Aptian Albian Cenomanian TuronianConiacSant. Campanian Maastric. Danian Selandian Thanetian Ypresian Lutetian Bartonian Priabonian Habshiya Rus Jeza Umm er Radhuma Sharwayn Mukallah Fartaq Harshiyat Qishn carbonate U. Qishn clastics Saaf Mbr Inf. Rift Red Sea Inversion Uplift TAWILA GROUP QISHN 140 Berriasian Valang. Saar Naifa Reservoir potential Trapped reservoir 1 2 Anticlinal 4-way dip closure. Structural trap Fault bounded horst structure. Structural trap. 3 Fault bounded rotated fault block. Structural trap. 4 Facies introduced stratigraphic trap 5 Diagenetic introduced stratigraphic trap al., 2004 Jurassic Late Jurassic M Jur Callov. Oxfordian Kimmeri. Tithonian Precambr. Madbi Shuqra Kohlan Basement Rifting Abrupt onset BASEMENT CAPITAL MARKETS DAY

39 FAST TRACK DEVELOPMENT MINIMIZE LEAD-TIME FROM DISCOVERY TO FIRST OIL Field Tasour Discovery Development First oil Sharyoof Discovery Development First oil Nabrajah Discovery Development First oil Godah Discovery Development First oil Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 18 months Cumulative gross production of 32.2 MMbbl 20 months Cumulative gross production of 36.7 MMbbl Cumulative gross production of 7.4 MMbbl 15 months Cumulative gross production of 1.0 MMbbl 10 months CAPITAL MARKETS DAY

40 PRODUCING ASSETS IN YEMEN

41 TASOUR AND GODAH BARRELS OF OIL PER DAY (GROSS) AVERAGE DAILY PRODUCTION: 8,987 BOPD BLOCK THE TASOUR FIELD THE GODAH FIELD January 2007 February 2008 CAPITAL MARKETS DAY

42 OPERATIONS ON TASOUR & GODAH Tasour production well Tasour CPF CAPITAL MARKETS DAY

43 SHARYOOF AND BAYOOT/HEKMA BARRELS OF OIL PER DAY (GROSS) AVERAGE DAILY PRODUCTION: 10,820 BOPD THE SHARYOOF FIELD BLOCK THE BAYOOT FIELD January 2007 February 2008 THE HEKMA FIELD CAPITAL MARKETS DAY

44 OPERATIONS IN BLOCK 53; BAYOOT/HEKMA Bayoot SW-2, 4 and 5 Caption Caption Bayoot S-1 wellhead production facility CAPITAL MARKETS DAY

45 NABRAJAH BARRELS OF OIL PER DAY (GROSS) AVERAGE DAILY PRODUCTION: 6,987 BOPD BLOCK THE NABRAJAH FIELD January 2007 February 2008 CAPITAL MARKETS DAY

46 OPERATIONS ON NABRAJAH Nabrajah Basement CPF Nabrajah Qishn CPF CAPITAL MARKETS DAY

47 EXPLORING THE POTENTIAL

48 BLOCK 32: OVERVIEW DNO S FIRST BLOCK IN YEMEN The block covers an area of 592 km 2 DNO-operated since 1998 DNO will continue to appraisal the block area to maintain the production level EXPLORATION WORK IN 2008 During 2008, DNO will drill three appraisal/exploration wells: Maleen-1 was drilled to TD in March 2008 as a dry well The eastern extension of the Godah oil pool will be tested and also structures containing potential carbonate and fractured basement reservoirs are evaluated Partners Participating interest Paying interest DNO Yemen 38.95% 41.00% Ansn Wikfs 42.93% 45.19% Trans Globe 13.12% 13.81% TYC 5.00% - 100% 100% CAPITAL MARKETS DAY

49 BLOCK 43: OVERVIEW AN IMPORTANT CONTRIBUTOR The block covers an area of 2,026 km 2 Huge exploration potential Exploration costs repaid by cost-oil The block is situated on the rim of the Ghayl Bin Yumain basin - south/west of Block 32 Nabrajah field on production since July infill wells will be drilled in 2008 EXPLORATION WORK IN 2008 Four exploration wells are planned for in 2008: Rig 908 is dedicated for Block 43 The Dhagah prospect (east of Nabrajah) was drilled in January and is currently waiting for test equipment Prospect D2 will be drilled in April/May Drilling priority for the remaining prospects is under evaluation Partners Participating interest Paying interest DNO Yemen 56.67% 66.67% Oil Search 28.33% 33.33% TYC 15.00% - 100% 100% CAPITAL MARKETS DAY

50 BLOCK 53: OVERVIEW AT THE START OF A SECOND GROWTH The block covers and area of 457 km 2 and is operated by Dove Energy The Sharyoof field came on production late 2001 Still successful contribution from infill drilling 2 infill wells planned for 2008 Bayoot/Hekma has promising potential EXPLORATION/APPRAISAL WORK IN 2008 New 3D seismic data over the southern block area will form the basis for regenerated and improved prospect mapping Focus in 2008 is on delineation and appraisal of the Bayoot/Hekma discoveries Rig 919 is dedicated for Block 53 drilling in 2008 The successful drilling of Bayoot SW-4 and -5 will be followed up by 3 more wells targeting fractured basement Partners Participating interest Paying interest Dove Energy 24.45% 32.60% DNO Yemen 24.45% 32.60% MOE 16.00% 21.33% Petrolin 10.10% 13.37% TYC 25.00% - 100% 100% CAPITAL MARKETS DAY

51 BLOCK 53: BAYOOT/HEKMA THE START OF A SECOND DEVELOPMENT Successful exploration and appraisal drilling through 2007 and 2008 has provided 4 wells already completed for production from this area The current well production capacity is more than boed Current trucking capacity not sufficient for future expectations Planning of a stand-alone production facility for the Bayoot/Hekma oil is ongoing GROSS PRODUCTION FROM BAYOOT/HEKMA January 2008 February 2008 CAPITAL MARKETS DAY

52 BLOCK 47: OVERVIEW A HUGE EXPLORATION BLOCK The Block covers and area of km 2 partly situated along the flank of the prolific GBY-basin and adjacent to Block 84 and Block 43 EXPLORATION/APPRAISAL WORK IN 2008 The Yaalen-1 discovery was made in January The success is now followed up by appraisal drilling, Yaalen-2, in April and extensive acquisition of 3D and 2D seismic data from May Drilling of the second exploration well, Sharnah-1, has already started in, testing the eastern extension of the D3 prospect Partners Participating interest Paying interest DNO Yemen 40.00% 50.00% OGMC 30.00% 37.50% Geopatrol 10.00% 12.50% TYC 20.00% - 100% 100% CAPITAL MARKETS DAY

53 BLOCK 47: YALEEN DISCOVERY THE FOURTH SUCCESSFUL BLOCK IN YEMEN Yaalen-1 discovered oil in January Oil samples were recovered from both Qishn sandstone and Kholan sandstone. Prospective zones are identified in basement and Naifa/Saaf Formation carbonates Extensive testing will start in mid April APPRAISAL AND DEVELOPMENT The Yaalen discovery proved up prospectivity along the entire western flank of the block 2-3 structures in the close vicinity of the Yaalen discovery in focus for detailed evaluation Yaalen-2 shall test the structure north of Yaalen-1 New 3D seismic shall cover the Yaalen structures complex and the northern continuation of the prospective trend. CAPITAL MARKETS DAY

54 BLOCK 44: OVERVIEW FOCUS ON NEW TARGETS The Block 44 is a huge exploration block, north of Block 32 The block covers an area of km 2 Exploration work has been focusing on the flank of the Ardah basin No success to date EXPLORATION WORK IN 2008 One well is planned to be drilled in the block in Q Abieet East prospect Need for more seismic data is being evaluated Partners Participating interest Paying interest DNO Yemen 65.10% 70.00% Ansan Wikfs 27.90% 30.00% TYC 7.00% - 100% 100% CAPITAL MARKETS DAY

55 BLOCK 72: OVERVIEW RENEWED OPTIMISM ON IMPROVED SEISMIC The Block covers and area of 1,821 km 2 Situated SW of the producing Block 51 (Nexen) EXPLORATION WORK IN 2008 The acquisition of 3D seismic data in two area in the block, in addition to more 2D data was completed in March Two wells will be drilled in 2008 Partners Participating interest Paying interest DNO Yemen 30.60% 34.00% Ansan Wikfs 29.70% 33.00% Trans Globe 29.70% 33.00% TYC 10.00% - 100% 100% CAPITAL MARKETS DAY

56 BLOCK 52: OVERVIEW THE NEW BLOCK IN THE PORTFOLIO The block covers and area of 1,299 km 2 Located NW of Block 10 (Total) and Block 53 Prospective trends from proven Qishn and Basement oil pools in adjacent blocks can be followed into the block EXPLORATION WORK IN 2008 Acquisition of seismic 2D data will start in April First well may be drilled from 3rd quarter Partners Participating interest Paying interest DNO Yemen 57.76% 72.23% Ansan Wikfs 22.22% 27.77% TYC 20.00% - 100% 100% CAPITAL MARKETS DAY

57 EXPLORATION BLOCKS 2D SEISMIC ONE WELL 52 2D SEISMIC ONE WELL D AND 3D SEISMIC TWO WELLS 84 SIGNING PSA POTENTIAL 3D 2D AND 3D SEISMIC THREE WELLS 47 CAPITAL MARKETS DAY

58 CLOSING REMARKS

59 CLOSING REMAKS BASED ON THE FOLLOWING FACTS 10 years of Exploration and Production experience in Yemen Strong organization with good reputation. 2 plus 1 drilling rig available/ short lead time from idea to drilling target Strong on geological techniques and databases Seismic acquisition, 3D and 2D in rough terrain Seismic processing and interpretation More than 100 wells in the database SUCCESS ON ESTABLISHED EXPLORATION STRATEGY 6 discoveries in 4 of the 7 blocks High probability of Bayooth and Yalen upsides >20,000 km 2 exploration acre DNO BELIEVES IN A PROSPEROUS FUTURE IN YEMEN. CAPITAL MARKETS DAY

60 DISCLAIMER: FORWARD LOOKING STATEMENT This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for DNO International ASA and DNO International ASA s (including subsidiaries and affiliates) lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as expects, believes, estimates or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for DNO s businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the Presentation. Although DNO International ASA believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. DNO International ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither DNO International ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use. This presentation was prepared for the April 3, 2008 Capital Markets Day presentations. Information contained within will not be updated. The following slides should be read and considered in connection with the information given orally during the presentation. CAPITAL MARKETS DAY

61 DNO INTERNATIONAL ASA THE KURDISTAN REGION OF IRAQ

62 THE NEW FRONTIER A REGION WITH HIGH POTENTIAL Attractive Kurdistan is unexplored relative to the rest of Iraq Highly prospective area combined with early entry opportunity at a low cost on trend with very large fields including Kirkuk Iraq has numerous undeveloped large fields and unexplored areas Geographically close to existing export infrastructure Experts agree that Iraq may be one of the few places left where vast reserves, known and unknown, have barely been exploited. Source: Energy Information Administration, Country Analysis Brief, Iraq CAPITAL MARKETS DAY

63 DNO IN KURDISTAN FIRST IN IRAQ DNO was the first foreign company to explore for oil in Iraq for decades We have a strong and competent organization divided between Kurdistan, Dubai, and Oslo Excellent cooperation with Kurdistan Regional Government Production facilities capable of delivering >50,000 bopd to export and domestic markets Flexible delivery solution 2,371 km 2 of exploration & development area Kurdistan CAPITAL MARKETS DAY

64 INFRASTRUCTURE IN IRAQ ESTABLISHED OIL EXPORT ROUTES Iraq has 6,960 kilometers network of pipelines Two major pipelines are installed from Beiji (near Kirkuk) to Ceyhan coastal terminal in Turkey. Combined capacity is 1.5MM-bopd. Key Statistics Proven oil reserves: 115 billion barrels (approximately 75 billion barrels undeveloped) Proven and probable oil reserves: 220 billion barrels Natural gas reserves: 110 tcf Hadithah Mosul Bayji KIRKUK Kirkuk Khanaqin Baghdad I R A Q International boundary Oil pipeline Oil Gas Tanker terminal Pump station Refinery km Al Basrah Source: EIA, IHS 2007 and Arab Oil & Gas Directory (2006), Western OilSands 2007 CAPITAL MARKETS DAY

65 COMPANIES IN KURDISTAN Company name # of Blocks Aspect energy 1 Crescent 1 Dana Gas 1 DNO 3 Gulf Key Stone 1 Heritage 1 Hillwood 1 Hunt Oil 3 KEPCO 5 KNOK 1 Korean NOC 1 MOL 1 OMV 2 Perenco 1 Pet Oil 2 Reliance 2 Sterling 1 TNK-BP 4 TTOPCO 2 Western Zagros 1 20 Companies 35 DNO DNO Perenco Hillwood Aspect Gulf Key Stone Hunt Oil Reliance Open MOL Open Open Open Reliance Open Open TNK-BP DNO OMV Open Open TNK-BP TNK-BP TNK-BP OMV Open TTOPCO Open KNOC KEPCO TTOPCO Open Open KEPCO Heritage Open Korean NOC Crescent Open KEPCO Dana Gas KEPCO KEPCO Sterling Open Open Open Western Zagros Open Pet Oil Open Open Open Source: KRG CAPITAL MARKETS DAY

66 GROSS DAILY PRODUCTION FROM TAWKE BARRELS OF OIL PER DAY AVERAGE PRODUCTION: BOPD 2008 AVERAGE PRODUCTION: BOPD June 2007 Februar 2008 CAPITAL MARKETS DAY

67 RESERVE DEVELOPMENT IN KURDISTAN REVISED ESTIMATES FOR TAWKE Based on latest data available and initial results from reservoir modeling: Oil In Place is ranging from billion barrels with a current best estimate of 1.3 billion barrels Gross recoverable reserves is ranging from million barrels with a current best estimate of 230 million barrels Improved oil recovery (IOR) methods have not been applied, and IOR methods may contribute to substantial upside to these reserve figures Production and export of oil at full capacity will improve the understanding of the reservoir behavior and reserve estimates DNO geologist doing field work in Kurdistan CAPITAL MARKETS DAY

68 PRODUCING OIL IN KURDISTAN

69 THE TAWKE PROJECT: OVERVIEW 10,000 bopd LOADING CAPACITY OIL GAS WATER 45 km 12 EXPORT PIPELINE 50,000 bopd 2 X 10,000 bbls CRUDE OIL TANKS FLARE TAWKE FIELD PIPELINE TIE-IN AREA FISCAL METER SEPARATOR - 2 stages WATER TANK 2 X 70,000 bbls TANKS WELL FLUID PUMP WELL INJECTION (FUTURE) 40,000 bopd LOADING CAPACITY CRUDE OIL TANK 350,000 bopd PUMP CAPACITY TO CEYHAN TERMINAL (TURKEY) E X P O R T L I N E IRAQ/TURKEY PIPELINES CAPITAL MARKETS DAY

70 TAWKE: CENTRAL PROCESSING FACILITY Tawke Central Processing Facility Area Central Processing Facility CAPITAL MARKETS DAY

71 TAWKE: CENTRAL PROCESSING FACILITY Tawke flare Tawke CPF crude storage tanks CAPITAL MARKETS DAY

72 OPERATIONS ON TAWKE: PIPELINE Pipelines at the Tawke Field CAPITAL MARKETS DAY

73 OPERATIONS ON TAWKE: TIE-IN AREA Existing export line and fiscal metering station at tie-in area in Fishkhabour CAPITAL MARKETS DAY

74 EXPLORING THE POTENTIAL

75 EXPLORATION IN KURDISTAN Sindy-1 Rig GWDC Rig CAPITAL MARKETS DAY

76 THE DOHUK PSC: OVERVIEW REVISED DOHUK PSC PSC Agreement Area: 1,652 km 2 Tawke field is ring-fenced and defined as a separate PSC Dihok West Dihok Central EXPLORATION WORK More than 475 km of 2D seismic have been acquired since 2005 Two exploration wells The Khanke #1 well, oil shows The Summail Ext. #1 is currently being drilled EXPLORATION WORK 2008 Seismic acquisition and processing Prospect mapping Partners Participating interest DNO Iraq AS 40% KRG 60% Total 100% Linava Summail EX1 Khanke Summail Domez Bare Bahar Sheik Adi Alqosh Sariyah D O H U K P S C Oil pipeline Gas pipeline Oil Gas Oil & Gas Lead Prospect Seismic Oil well Location only CAPITAL MARKETS DAY

77 THE DOHUK PSC: OVERVIEW REVISED DOHUK PSC PSC Agreement Area: 1,652 km 2 Tawke field is ring-fenced and defined as a separate PSC Dihok West Dihok Central EXPLORATION WORK More than 475 km of 2D seismic have been acquired since 2005 Two exploration wells The Khanke #1 well, oil shows The Summail Ext. #1 is currently being drilled EXPLORATION WORK 2008 Seismic acquisition and processing Prospect mapping Partners Participating interest DNO Iraq AS 40% KRG 60% Total 100% Linava Summail EX1 Khanke Summail Domez Bare Bahar Sheik Adi Alqosh Sariyah D O H U K P S C Oil pipeline Gas pipeline Oil Gas Oil & Gas Lead Prospect Seismic Oil well Location only CAPITAL MARKETS DAY

78 THE ERBIL PSC: OVERVIEW AGREEMENT AREA PSC Agreement Area: 313 km 2 EXPLORATION WORK DNO have acquired 133 km of 2D seismic since 2005 Hawler #1 exploration well has been drilled and is currently being tested In the lower horizon the well has tested 9,000 bopd and 11MM scf/d Multiple zones being tested EXPLORATION WORK 2008 Hawler #2 appraisal well to be drilled next Additional prospects is currently being mapped Partners Hawler-1 Participating interest DNO Iraq AS 40% KRG 60% Total 100% Bastora E R B I L P S C Oil pipeline Gas pipeline Oil Gas Oil & Gas Lead Prospect Seismic Oil well Location only CAPITAL MARKETS DAY

79 CLOSING REMARKS

80 SUMMARY A MASSIVE OPERATION Two original PSAs reviewed by KRG and finalized as three PSCs in compliance with the Regional Petroleum Law Tawke Field Development finished awaiting export tie-in to existing pipeline infrastructure 50,000 bopd design capacity Tawke oil being sold to the Iraqi domestic market AGGRESSIVE EXPLORATION PROGRAM Three rigs in operation 2D seismic being acquired Commercial oil discovered from the Erbil PSC the Hawler Field The strategy is to prove up additional reserves in 2008 onwards CAPITAL MARKETS DAY

81 DISCLAIMER: FORWARD LOOKING STATEMENT This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for DNO International ASA and DNO International ASA s (including subsidiaries and affiliates) lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as expects, believes, estimates or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for DNO s businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the Presentation. Although DNO International ASA believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. DNO International ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither DNO International ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use. This presentation was prepared for the April 3, 2008 Capital Markets Day presentations. Information contained within will not be updated. The following slides should be read and considered in connection with the information given orally during the presentation. CAPITAL MARKETS DAY

82 DNO INTERNATIONAL ASA VALUE THROUGH EXPLORATION

83 VALUE CREATION THROUGH EXPLORATION A STRUCTURED APPROACH TO EXPLORATION Organic growth through exploration The way we explore Set the direction THE EXPLORATION VALUE CHAIN CAPTURE EXPLORE DRILL DEVELOP PRODUCE CAPITAL MARKETS DAY

84 EXPLORATION ASSETS UNITED KINGDOM More than 250 km 2 of offshore exploration acreage Mature area SYRIA 3,000 km 2 of exploration acreage Frontier exploration KURDISTAN REGION OF IRAQ 2,350 km 2 of prime acreage In the early Exploration phase YEMEN More than 17,850 km 2 of exploration acreage Mature assets, with remaining potential MOZAMBIQUE Approximately 16,500 km 2 of exploration acreage Frontier exploration CAPITAL MARKETS DAY

85 THE WAY WE EXPLORE SMART EXPLORATION AND INTEGRATION OF DATA Competence Field Work Satellite Images Seismic Wells, Logs and Cores New technologies (EM and other) DNO geologist doing field work in Kurdistan CAPITAL MARKETS DAY

86 SATELLITE AND SURFACE DATA Satellite imagery from the Tawke PSC in Kurdistan Region of Iraq CAPITAL MARKETS DAY

87 STRUCTURAL UNDERSTANDING CAPITAL MARKETS DAY

88 GEOLOGICAL INTERPRETATION CAPITAL MARKETS DAY

89 RESERVOIR MODEL AN ILLUSTRATION OF THE TAWKE FIELD CAPITAL MARKETS DAY

90 DNO IS DIFFERENT UNIQUE KNOWLEDGE Offshore history onshore success Experience as an operator both onshore and offshore Wide range of competencies Subsurface and petroleum engineering Petrophysics, operations geology, testing and data management A hands on approach CAPITAL MARKETS DAY

91 EXPLORATION WELL RANKING PROCESS WELL RANKING FLOW SHEET Corporate Management Request for preliminary list of drilling candidates DNO preliminary well list Request for drilling candidates DNO final well list Exploration Wells in Business Plan Business Units BU s ranking of drilling candidates Mature drilling candidates BU s G&G prospect ranking License budget and approval Projects Nomination of potential drilling candidates Prospect evaluation Prospect volumes and risks February March April May June July August September October November December January CAPITAL MARKETS DAY

92 RISKING PROCEDURE FOR DEFINITION OF POS PROBABILITY OF SUCCESS (POS) POS to be defined for prospects Prospects can vary in maturity from early evaluation to prospects ready to drill Identify main critical factors POS is case specific- the most likely or P50 case - high and low cases (P10 and P90) are not risked, but upside and downside are always specified AN EXAMPLE Category Type Factor Comments P1 Reservoir 0,80 P2 Trap 0,30 Main critical factor is the trap P3 Source and migration 1,00 Is proven P4 Retention after accumulation 0,90 Probability Of Success (POS) Discovery (P1 P2 P3 P4) 0,216 CAPITAL MARKETS DAY

93 EXPLORATION DIRECTION KEY ELEMENTS Maintain a series of growth options Develop current positions in proven basins, known and new plays Follow potential extensions of proven plays into adjacent basins Pursue entries into frontier basins in the Middle East Eastern Africa region, mainly onshore Develop and maintain partnerships and relationships with key stakeholders CAPITAL MARKETS DAY

94 Chronostrat. YEMEN: REMAINING POTENTIAL al., 2004 Tertiary Cretaceous Jurassic E. Oligocene Early Eocene Middle Eocene L. Eocene L. Palaeocene E. Pal. Late Cretaceous Early Cretaceous M Jur Late Jurassic Ypresian Lutetian Bartonian Priabonian Maastric. Danian Selandian Thanetian Campanian Cenomanian TuronianConiacSant. Albian Aptian Barrem. Berriasian Valang. Hauterivian Callov. Oxfordian Kimmeri. Tithonian Precambr. Masila BasinTectonics Habshiya Rus Jeza Umm er Radhuma Sharwayn Harshiyat Saar Mukallah Fartaq U. Qishn clastics Saaf Mbr Naifa Madbi Shuqra Kohlan Basement Qishn carbonate Red Sea Inf. Rift Inversion Uplift Rifting Abrupt onset TAWILA GROUP QISHN BASEMENT 2D SEISMIC ONE WELL D AND 3D SEISMIC TWO WELLS Category 2D SEISMIC ONE WELL SIGNING PSA POTENTIAL 3D Unrisked recoverable reserves 100% (MMboe) 2D AND 3D SEISMIC THREE WELLS 47 Unrisked recoverable reserves Net to DNO (MMboe) Activities wells Total 1,000-1, CAPITAL MARKETS DAY

95 KURDISTAN: UNDERSTANDING THE PLAYS Tertiary PALEOGENE A play is a geographically and stratigraphically delimited area where a specific set of geological factors such as reservoir rock, trap, mature source rock and migrations paths exist in order that petroleum may be provable Category Unrisked recoverable reserves 100% (MMboe) Unrisked recoverable reserves Net to DNO (MMboe) Activities wells Total 1,500-2, ,000 Cretaceous Jurassic CRETACEOUS CAPITAL MARKETS DAY

96 KURDISTAN: THE DNO APPROACH KEY ACTIVITIES Study of field data and satellite imagery to identify possible leads 2D seismic design and acquisition Prospect evaluation Exploration drilling Infill seismic; 2D or 3D Appraisal and development CAPITAL MARKETS DAY

97 MOZAMBIQUE: XXL AREA, LOW DATA DENSITY CAPITAL MARKETS DAY

98 MOZAMBIQUE: FRONTIER EXPLORATION Acquisition of passive seismic from micro earthquakes Geochemical techniques in field to detect vertical seepage CAPITAL MARKETS DAY

99 SUMMARY AND CONCLUSIONS DNO WILL: Continue to create values through exploration Maintain access to substantial exploration acreage Pursue a series of growth opportunities, primarily onshore in the axis Middle East - East Africa Work professional and efficient Adapt quickly to new technology Always adapt a hands on approach to exploration DNO geologist doing field work in Kurdistan CAPITAL MARKETS DAY

100 DISCLAIMER: FORWARD LOOKING STATEMENT This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for DNO International ASA and DNO International ASA s (including subsidiaries and affiliates) lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as expects, believes, estimates or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for DNO s businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the Presentation. Although DNO International ASA believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. DNO International ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither DNO International ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use. This presentation was prepared for the April 3, 2008 Capital Markets Day presentations. Information contained within will not be updated. The following slides should be read and considered in connection with the information given orally during the presentation. CAPITAL MARKETS DAY

101 DNO INTERNATIONAL ASA FINANCIAL MATTERS

102 VALUE CREATION

103 OUR FINANCIAL ENVIRONMENT OIL PRICES EXCHANGE RATES Achieved oil price Brent blend USD/NOK 90 8,0 7,5 60 7,0 USD USD/NOK 6,5 30 6,0 5, CAPITAL MARKETS DAY

104 STABLE, HIGH MARGIN PRODUCTION PRODUCTION LIFTING COST 6 8,0 7,2 5 6,4 4 5,6 4,8 MBOE 3 USD/BBL 4,0 3,2 2 2,4 1 1,6 0, CAPITAL MARKETS DAY

105 STRONG CASH FLOW GENERATION NETBACK NETBACK PER BARREL NETBACK PER SHARE Netback Exploration expensed ,8 0, ,6 NOK Million USD NOK 0,5 0,4 0,3 0, , CAPITAL MARKETS DAY

106 TRANSFORMING RESOURCES TO RESERVES EXPLORATION EXPENDITURE CAPEX Yemen Kurdistan Other Yemen Kurdistan Other NOK Million 300 NOK Million E E CAPITAL MARKETS DAY

107 CASH FLOW FUNDING GROWTH IN NETBACK SUPPORTS INVESTMENT PROGRAM Netback before exploration covered 64% of total 2007 investments Netback before exploration covered expensed exploration by 3,6x in 2007 NOK Million SOURCES AND USES OF CASH Exploration Expensed Development Capex Netback bef. Exploration Divestment New Interest-Bearing Debt Sources Uses CAPITAL MARKETS DAY

108 BUILDING VALUE THROUGH EXPLORATION CLASS 1-5 RESERVES* RESERVE REPLACEMENT RECYCLE RATIO MBOE Times Times *Continued operations, excluding associated reserves CAPITAL MARKETS DAY

109 FINDING RESERVES AT LOW COST INDUSTRY FD&A COST DNO ANNUAL AVERAGE FD&A COST Proved acquisition Cost Finding and development cost USD/boe USD/boe Source: J. S. Herold CAPITAL MARKETS DAY

110 HIGHLY RANKED IN THE MIDDLE EAST 3-YEAR F&D COST ( ) Marathon DNO Noble Apache Petro-Canada BASF OMV Canadian Eni TransGlobe PetroSA Mitsui Total Occidental Repsol USD/BBL 3-YEAR RESERVE REPLACEMENT ( ) DNO Marathon Tullow Hess Canadian ConocoPhillips Apache Corp. TransGlobe Noble Energy Occidental Burren Mitsui Petro-Canada Eni PetroSA PERCENT Source: J. S. Herold CAPITAL MARKETS DAY

111 TAXATION AND PSA S

112 HOW PSA S WORK PRODUCTION SHARING Royalty A fixed percentage Cost oil (Cost recovery) All recoverable cost is allocated to the cost oil Cost oil shared among the paying partners Production Sharing Oil Profit oil Profit oil is shared between the ministry and the partners Production Royalty Cost oil = Profit oil Government take share of oil going to MOM & TYC in Yemen (KRG in Kurdistan) Portion of non recoverable cost may vary EXAMPLE YEMEN PSA Cost oil Maximum 50 % Total production of oil 100 % Net production of oil Profit oil Other DNO MOM Partner TYC Other Contractors DNO Royalty 1-X % X % Net production of oil - Cost oil % % 70 % 30 % 15 % 85 % % % CAPITAL MARKETS DAY

113 PSA EXAMPLE PRODUCTION SHARING COST OIL AND PROFIT OIL IN YEMEN Distribution of production Contractors DNO s share Production 100 % 100,00 - Royalty 3 % = Net production of oil 97 % Cost oil to contractors 50 % 48,50 32,33 Profit oil (100 %-3 %-cost oil) 50 % 48,50 - MOM 70 % 33,95 = Profit to oil partners 14,55 - TYC 15 % 2,18 Profit oil to contractors 12,37 8,25 Total to partners/dno 60,87 40,58 Percent Government take Cost oil Profit Oil 23% 16% 30% 43% 47% 41% 0 Block 32 Block 43 CAPITAL MARKETS DAY

114 DNO PSA S IN THE KURDISTAN REGION OF IRAQ PRODUCTION SHARING AGREEMENTS Royalty Royalty rate at 10% Cost oil (Cost recovery) DNO will be entitled to 60% (net of royalty) of the revenues up to a gross revenue of USD 484 million from the Tawke oil field Thereafter standard cost recovery rates will apply Profit Oil R Factor applied to determine the share of profit crude oil to which the contractor is entitled. R Factor calculated as R=X/Y X: Cumulative revenues received by contractor Y: Cumulative costs incurred by contractor Contractor share of profit crude oil ranges within defined R Factor levels Hadithah Mosul Bayji KIRKUK Kirkuk Khanaqin Baghdad Oil pipeline Oil Gas Al Basrah Tanker terminal Pump station Refinery I R A Q International boundary km CAPITAL MARKETS DAY

115 WORKING INTEREST AND NET ENTITLEMENT WORKING INTEREST AND NET ENTITLEMENT Working interest Working interest of total oil produced (net of royalty) presented as revenue, and the corresponding government take presented as income tax expense Net entitlement Only working interest of oil produced, after deduction of government take, is presented as revenue The part of the government take assigned to cover DNO s corporate tax, is not deducted from revenue WORKING INTEREST VS. NET ENTITLEMENT Working interest provides a more complete view of the economic flows in total production under a PSA Working interest provides better comparability between different fiscal regimes WORKING INTEREST VS NET ENTITLEMENT Working Interest Contractors DNO s share Profit oil + Cost oil Government take = WI Income Cost oil = WI P&L before tax Tax (Government take) Profit Net entitlement Contractors DNO s share Profit oil + Cost oil Company tax = NE Income Cost oil = NE P&L before tax Company tax Profit CAPITAL MARKETS DAY

116 SUMMARY BUILDING VALUE THROUGH EXPLORATION AND DEVELOPMENT Strong organic growth in reserves and production capacity Sector leading reserve economics Continuing extensive exploration program SOLID FINANCIAL PERFORMANCE High margin production providing increasing cash flow CAPITAL MARKETS DAY

117 DISCLAIMER: FORWARD LOOKING STATEMENT This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for DNO International ASA and DNO International ASA s (including subsidiaries and affiliates) lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as expects, believes, estimates or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for DNO s businesses, oil prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the Presentation. Although DNO International ASA believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. DNO International ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither DNO International ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use. This presentation was prepared for the April 3, 2008 Capital Markets Day presentations. Information contained within will not be updated. The following slides should be read and considered in connection with the information given orally during the presentation. CAPITAL MARKETS DAY

118 DNO INTERNATIONAL ASA CLOSING REMARKS

119 YEMEN CLOSING REMARKS A proven 10 years track record within all stages of E&P operations Increased exploration acreage with large potential Stronger position than at time of entry Build on past success to exploit the potential Tasour, Yemen CAPITAL MARKETS DAY

120 KURDISTAN CLOSING REMARKS Early entry and in the forefront of events Building on Yemen experience Established a full scale E&P operation within a very short timeframe Unique positioned to build a long term and sustainable business Seismic in Kurdistan CAPITAL MARKETS DAY

121 STRONG POSITION FOR GROWTH CLOSING REMARKS Balanced portfolio with substantial resource potential Highly skilled and experienced staff Maintain focus on cost effective and fast-track operations Future growth founded on our past success CAPITAL MARKETS DAY