Nabrajah #5 to be Suspended as a Future Producer

Following the successful test of the Basement interval in Nabrajah # 5, which produced 5,800 BOPD, a production test in the interval 2,619 - 2,636 meters in the Kohlan dolomite reservoir was conducted.

Preliminary results of the production test in the Kohlan Formation are:

3,862 bbls/day of oil (40.9 API), 1,630 bbls/day of water and 2,940 Mscf/day of gas.

The well was flowed using an ESP (Electrical Submersible Pump) for artificial lifting.

As previously reported strong hydrocarbon indications were observed while drilling the dolomite section of the Kohlan formation, and evaluation of electrical logs indicated the presence of hydrocarbons in a 42 meter gross interval. The test reported above was conducted in the lower part of this hydrocarbon-bearing interval.

The initial plan was to perforate also the upper part (2,603 - 2,614 meters) of the Kohlan formation and test the full section. However, based on the positive results from the test in the lower section the testing will now be abandoned. Nabrajah # 5 will be suspended and preserved as a future Basement & Kohlan oil producer.

The Basement / Kohlan oil discoveries in Nabrajah # 5 are different hydrocarbon systems than the shallower Qishn reservoir, which until now has made the reserve basis for the Nabrajah Field Development. Further appraisal of the Basement / Kohlan oil discoveries is necessary in order to confirm the size of the reserves.

As a consequence of the Basement / Kohlan oil discoveries, the Block 43 partners will revise the drilling schedule. The next well to be drilled is Nabrajah # 6, which will be a dedicated Qishn water injector. Thereafter a Basement appraisal program will be undertaken which could include drilling of up to 4 additional Basement targets in 2005.

Basement is producing oil in both Block 10 (operated by Total) and Block 14 (operated by CanNexen), and has become a main target for exploration drilling in the area. The recent Basement oil discovery in Nabrajah # 5 supports the probability of significant oil potential in Block 43, which could be developed cost efficiently through the Nabrajah Field production facilities.

Following the Basement oil discovery in Block 43, DNO will increase its focus on Basement prospects within the other licenses in Yemen, and the Company has already launched a study to identify Basement drilling targets in Block 32.

Status of Nabrajah Field Development:

The first stage of the Nabrajah Field Development is nearing completion and first oil is expected end of June. The initial production capacity of Nabrajah will be 5,000 BOPD (gross), increasing to 15,000 BOPD (gross) during August.

As previously reported some of the initial production facilities have been arranged through lease contracts in order to accelerate production start-up and to ensure an optimized design of the permanent facilities. The current plan is to have permanent production facilities with higher capacity installed by April 2006.

The production capacity of the permanent production facilities on Nabrajah will be based on the outcome of the ongoing reserve estimates following the Nabrajah # 5 Basement and Kohlan oil discoveries.

The Block 43 partners are DNO as operator with 56.67%; Oilsearch (Yemen) Ltd with 28.33%; and The Yemen Company with 15% carried interest.