DNO Reports 1Q05 Interim Results

During the first quarter of 2005 DNO achieved an operating profit of NOK 212.8 million and a net profit of NOK 143.8. The 2 P reserves increased by 54% at cost less than US $1.00 per barrel, and DNO delivered a reserve replacement ratio of 1,200% during the first quarter. These achievements clearly demonstrate that the revised strategy is already adding new values to our shareholders.

Highlights for the First Quarter 2005

  • Continued success from drilling in Yemen
  • Further expansion of portfolio with substantial un-risked resource potential in Norway.
  • Increase in proven plus probable reserves by 15.6 mboe to 42.8 mboe.
  • Excellent reserve economics
  • Signed Memorandum of Understanding (MoU) with the Ministry of Oil in Baghdad

We are pleased with our achievements during the first quarter of 2005. Good progress has been made both in Yemen and Norway, which is clearly seen from our strong reserve economics. The signing of the MOU with the oil ministry in Baghdad is an important step towards a long-term presence for DNO in Iraq. Seismic acquisition within the PSA area in Northern Iraq is expected to commence in the near future.

Going forward, we will continue our efforts to add reserves at low cost. Following the recent basement oil discovery within the Nabrajah area, a further upgrade of the reserves will be made during the second quarter of 2005, says Managing Director of DNO ASA, Helge Eide.

DNO had operating revenues of NOK 299.8 million (NOK 255.8 million) in the first quarter 2005, while the operating revenues in the fourth quarter 2004 was NOK 338.0 million. As expected lower production is the main reason for the reduction in revenues compared with Q4 2004, but the effect has been partially offset by higher oil prices and favorable USD/NOK.

DNO achieved an operating profit (EBIT) of NOK 212.8 million (NOK 118.6 million) in the first quarter 2005. Net profit amounted to NOK 143.8 million (NOK 20.1 million).