DNO Working with Norway for Lie Drilling Authorization

Reference is made to a notification from the Petroleum Safety Authority Norway published Monday that DNO as the Operator has not yet been granted the necessary permissions and approvals to drill the planned exploration well on PL 305 (the Lie prospect) on the Norwegian Continental Shelf (NCS). DNO is in continuous dialog with PSAN and is currently preparing additional documentation and plans in order to obtain such permissions and approvals.

DNO has grown substantially over the past few years both internationally and in Norway. The Company has expanded its license portfolio on NCS which now count 24 licenses, of which 8 as Operator. In parallel with this growth in business, Don's staff has increased to more than 300 worldwide. In Norway the Company's staff has increased from 17 to 40 during the last two years.

In 2006 DNO drilled 15 wells as Operator of which one offshore well at the UK continental shelf (the Jaguar prospect). The remaining wells were drilled onshore in Yemen and Northern Iraq.

In order to make sure that exploration drilling can take place within the company's Norwegian licenses DNO has, as part of a consortium of Norwegian based E & P companies, secured a three years contract for the semi-submersible drilling rig "Bredford Dolphin", commencing 1st Quarter 2007. DNO as Operator has committed approximately one year of this contract, and three wells are planned to be drilled by DNO as Operator in 2007.

DNO remains committed to be an active player in Norway and the Company will make all efforts to demonstrate its capability and capacity required to receive the necessary permissions and approvals to undertake drilling operation of the forthcoming exploration well in PL 305 as well as further exploration drilling as Operator on NCS.

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