DNO Revises Reserve Estimates on Tawke Field to 230 Million Barrels

Based on the latest data available and initial results from the reservoir modelling studies utilizing such data, the revised estimates of the oil volumes in the Tawke field are promising.

The gross volumes of oil in place are ranging from 0.9 to 1.9 billion barrels with a current expected value of 1.3 billion barrels.

The gross recoverable oil reserves are ranging from 150 million barrels to 370 million barrels, with a current expected value of 230 million barrels.

Improved oil recovery (IOR) methods have not been applied for in these estimates and IOR methods may contribute to a substantial upside to these reserve figures.

When production and export of oil at full capacity of the Tawke facilities will take place, the understanding of the reservoir behaviour will improve, forming a stronger basis for confirming the full potential and further development of the Tawke field.

Acquisition of additional data and comprehensive analysis and modelling work will continue throughout 2008 with the view to improving the understanding of the Tawke reservoir and to evaluate and confirm the full potential of the field.

Test production will continue to provide dynamic data to support further assessment of the properties and production characteristics of the reservoirs.

Detailed reservoir and production engineering studies will be undertaken during 2008 to further assess the Tawke production strategy and reserve estimates. This work will be supported by several special studies, including formation evaluation including testing of wells # 11 and 12, special core analysis, and assessment of increased oil recovery methods, including gas injection vs. water injection and alternative well designs and well patterns.

This work will aim to reduce the uncertainties in the reserves estimates, as well as targeting the upside potential through improved oil recovery methods.

However only production information and history will provide the crucial information required to reduce the uncertainties of the reserve estimates and confirm the reserves upside and associated production. The test production has been at limited flow rates dictated by the demand in the local market. However, when DNO is in the position to produce and export oil at full capacity of the facilities, the flow rate will increase substantially and the understanding of the dynamic behavior of the reservoir will improve. This will form a stronger basis for optimizing the further appraisal and development of the Tawke field, improving the reserve estimates, and confirming the full potential of the Tawke field.

"We are pleased to note that this update more than doubles the estimated reserves in Tawke,: said , President and Managing Director Helge Eide. “The data gathered to date and technical work undertaken by the Company have confirmed the high quality of the Tawke field." "We remain focused on delivering additional values from the Tawke field as well as from the exploration activities currently being progressed in other areas of our licenses."

Representatives from DNO ASA will give a presentation of the revised reserve estimates for the Tawke field at 11:00 A.M. on 18 December 2007 in Felix Konferansesenter at Bryggetorget 3, Aker Brygge, Oslo.

The presentation can also be followed live on the internet, via a video webcast at www.dno.no. An archived version of the webcast will be posted on www.dno.no shortly after the presentation. The presentation will be held in English.