DNO Suspends Balan #1 Well

Production testing of Balan # 1 in Block 32, Yemen has been completed. The well failed to produce hydrocarbons from Basement and Sarr intervals. On the Tasour Field the repair of Tasour # 19 has been completed and the well is back on stream at ca. 1.000 BOPD (gross).

The Balan #1 exploration well will be suspended after failing to test any hydrocarbons. The well is located approximately 11 kilometers North West of the Tasour field. A production rate of up to 7 000 barrels of water per day was achieved in the Sarr interval confirming good reservoir quality. However no hydrocarbons were trapped at this location. The rig will now move to Block 53 to drill an exploration well at a Basement Prospect.

Another rig is planned to start drilling a water injection well in the Tasour field in early December. Upon completion of the Tasour water injection well, the rig will commence drilling exploration well Godah #1 by the end of December 2005 or early January 2006. The Godah #1 well location is approximately seven kilometers East of the Tasour field and will test for a potential oil accumulation in the Qishn sandstones.

The Tasour #19 well workover to repair the cement bond was successful and the well is now back on stream at a rate of ca.1,000 BOPD. The Tasour field is currently producing in excess of 12,000 BOPD (ca. 4.700 BOPD to DNO, pre-tax) and is expected to maintain this rate for the balance of 2005.