DNO Issues Production Figures, Yemen Status Report

DNO recently announced its February 2006 production figures, the status of its drilling and testing activities in Yemen, and its acquisition of a new license in Yemen.

February 2006 Production

DNO's achieved an oil production (working interest [WI]) of 16,929 barrels of oil per day (BOPD). This figure represents a 17.4-percent increase from February 2005. In addition, the company repors that the 2006 year-to-date oil production shows a 21.4-percent increase compared to YTD 2005.

The net oil production to DNO (WI) from Norway and Yemen was as follows (BOPD):

 	February 2006	2006 YTD
Norway  	1,199	   1,187
Yemen 	       15,730	  16,139
Total	       16,929	  17,326

The February 2006 production decreased by 754 BOPD compared to January. The decline stems primarily from well repair work at the Tasour Field in Yemen and a planned shutdown at the Glitne Field. These activities extended into March and will impact the March production. Both fields are now back on full production, though.

The Nabrajah Field delivered a stable oil production of more than 11,000 BOPD (gross) in February 2006. Nabrajah #5, the Basement oil producer, is currently delivering a production of approximately 5.300 BOPD (gross) under natural flow and zero water cut. Work is underway to increase the capacity of existing wells at Nabrajah by increasing water handling capabilities and installing gas treatment and injection facilities.

The next two wells on Nabrajah will be drilled in the Nabrajah #5 fault terrace. Their primary objective will be to increase Basement production.

Yemen Drilling and Testing

The test performed in the Basement and Kohlan intervals in Nabrajah #9 failed to flow oil to surface.

  • Nabrajah #9--Block 43: Nabrajah #9 was drilled to a total depth of 2418 meters, some 213 meters into the Basement. Two production tests were performed in the well--one in the Basement interval and one in the overlaying Kohlan formation. Both tests failed to produce oil to the surface. The well will now be temporarily abandoned and the rig will move to the Nabrajah #5 fault terrace, where the next two wells will be drilled (Nabrajah #10 and #11).

    Four wells have been drilled and tested in the Basement section within the Nabrajah area. Both Nabrajah #2 (gas well) and Nabrajah #5 (oil well) confirmed good productivity from the Basement. The two following appraisal wells have failed to produce hydrocarbons to the surface. They include Nabrajah #8, which is located at a fault terrace to the northeast of Nabrajah #5, and Nabrajah #9, which is located at a fault terrace to the west of the Nabrajah #5. The failures are under investigation, and new 3-D seismic data will be acquired in Block 43 later this year.

  • Tasour #21--Block 32: After abandoning the testing in Bayoot SW #1 in Block 53, the rig has been moved to the Tasour #21 location in Block 32. Tasour #21 will be drilled as an appraisal well at the Tasour area. The remaining two tests planned in Bayooyt SW #1 will be undertaken by another rig at a later stage.

    After Tasour #21 has been drilled, the rig will move to drill the first exploration well in Block 44 located North of Block 32.

  • Godah #2: Following the successful test in Godah #1 ST, which flowed approximately 1,830 BOPD at natural flow, the rig was moved to the Tasour area for some well work. The rig will now be moved to the Godah #2 location to appraise the Godah oil discovery. DNO has commenced work to evaluate options to tie back Godah oil production to the Tasour main facilities.
  • Sharyoof #20, Block 53: Drilling of Sharyoof #20, which is the first of four infill wells planned at the Sharyoof Field in 2006, began on March 11.

New License in Yemen

DNO has secured a 35-percent working interest and operatorship in Block 47 in Yemen. The concession is located immediately to the east of Block 43 and extends to the coast.

Partners in Block 47 are DNO (35 percent interest, operator), Oil & Gas Mine Co. (OGMC) (35 percent), and The Yemen Co. (TYC) (30 interest, 12.5 percent carried). Seismic acquisition is planned within the license in 2006.