D N O i n t er n at i on a l A sa T h ir d Q ua rt er 20 0 8
Third quarter 2008 2 AGENDA SUMMARY AND KEY EVENTS Helge Eide, President and MD OPERATIONAL REVIEW Ivar Brandvold, COO FINANCIAL REVIEW Haakon Sandborg, CFO Q&A
3 Dno international asa 2008 HIGHLIGHTS EXPLORATION Maintained high exploration level throughout the year Expensed exploration costs of NOK 244.1 million YTD DEVELOPMENTS Tawke: Completed Phase 1 and commenced final work in…
Third quarter 2008 4 YTD 2008: KEY FINANCIALS SALES EBITDA AND EBITDAX NETBACK YTD sales of NOK 1,159 million, YTD EBITDAX of NOK 894 million, YTD Netback of NOK 481 million, up 21 per cent Y/Y up 13 per cent Y/Y down 12 per…
5 Dno international asa TAWKE A FAST TRACK AND ROBUST PROJECT TAWKE KEY FACTS (Gross figures to date) P50 Reserves (MBOE) 230 Finding & Development costs Phase I (USD Million) Facilities (CPF, pipeline, metering station,…
Third quarter 2008 6 HIGHLY RANKED IN THE MEA REGION* 3-YEAR F&D COST (2005-07) 3-YEAR RESERVE REPLACEMENT (2005-07) Source: JS Herold Inc. Note: * MEA: Middle East and Africa
7 Dno international asa OUR MISSION DNOS KEY FOCUS IS TRANSFORMING RESOURCES TO RESERVES AT LOW COSTS GOING FORWARD THE COMPANY WILL GROW PRODUCTION FROM AN INCREASING RESERVE BASE
Third quarter 2008 8 PRODUCTION AND RESERVES WORKING INTEREST PRODUCTION P50 RESERVES AND RESOURCES DELIVERING IN LINE WITH STRATEGY High margin production funding increased exploration activity 190 per cent increase in P50…
9 Dno international asa OUTLOOK SHIFT IN FOCUS Increased production Near term developments LOWER EXPLORATION More selective exploration eorts Resource growth potential remains good FINANCIAL IMPACT Growth in sales and…
Third quarter 2008 12 YEMEN: WELLS GOING FORWARD BLOCK 44 Gahtel 1 P&A 23 October, indications of hydrocarbons BLOCK 52 Drill exploration well spud January 2009 BLOCK 32 BLOCK 53 Tasour 25 development well spud December…
13 Dno international asa YEMEN: GOING FORWARD PRODUCTION High production regularity Infill wells at Tasour, Nabrajah and Bayoot DEVELOPMENT BAYOOT AREA Remote Processing Facility Aggressive drilling program DRILLING Reduced…
Third quarter 2008 14 YEMEN: DEVELOPMENT OF BAYOOT AREA GAS DISTRIBUTION SYSTEM AT THE SHARYOOF FIELD Convert all Sharyoof Diesel Generators to bi-fuel service GAS FLOW LINE FROM BAYOOT RPF TO SHARYOOF Sizing 6 or 8, 23 Km. Gas…
15 Dno international asa YEMEN: BAYOOT AREA RESOURCE UPDATE BAYOOT RESOURCE STATEMENT 31.12.2007 Million bbls Field gross Net to DNO (WI) Produced 0.3 0.1 Remaining reserves 4.3 1.4 Remaining resources 10.7* 3.5* *operators…
Third quarter 2008 16 KURDISTAN: OPERATIONAL UPDATE TAWKE PSC Projects Phase I completed and Phase II in progress Topping plant being assembled Tie-in to export pipelines in progress Exploration/Drilling Tawke 9 and 10 drilled…
17 Dno international asa FISHKHABOR TIE-IN AREA
Third quarter 2008 18 HAWLER A NEW FAST-TRACK PROJECT HAWLER 1 JURASSIC DISCOVERY Q1 2008 Two oil accumulations confirmed Lower reservoir test; 9,000 bopd and 11 million scf/d gas Upper reservoir test; 1,500-2,000 bopd, heavier…
19 Dno international asa KURDISTAN: GOING FORWARD PRODUCTION - TAWKE Finalize tie-in to strategic export system Focus on oil export activities DEVELOPMENT - HAWLER Firm up resource potential Define fast track development…
Third quarter 2008 20 MOZAMBIQUE: UPDATE THREE PARALELL OPERATIONS IN Q3 GOING FORWARD Sangussi 1 well drilled July September, dry Further technical and prospect evaluation of the Aero Electromagnetic Survey Inhaminga block Field…
21 Dno international asa FINANCIAL REVIEW
Third quarter 2008 22 FINANCIAL SUMMARY LOWER SALES Temporary halt in test production from Tawke Production from Yemen as expected ACTIVE EXPLORATION Exploration program adding to reserve potential and knowledge Exploration…
23 Dno international asa QUARTERLY FINANCIALS SALES EBITDA AND EBITDAX NETBACK Drop in production from Tawke High level of exploration expensed Lower Q3 Netback
Third quarter 2008 24 INCOME STATEMENT THREE MONTHS ENDING NINE MONTHS ENDING NOK Million 30.09.08 30.06.08 30.09.07 30.09.08 30.09.07 Sales 324.5 412.5 375.2 1158.9 955.1 Cost of goods sold -156.1 -177.8 -129.7 -546.7 -359.4 Gross…
25 Dno international asa REVENUES DOWN ON PRODUCTION HALT Q3 2007 VERSUS Q3 2008 YTD 2007 VERSUS YTD 2008
Third quarter 2008 26 LOWER COSTS OF GOODS SOLD COSTS OF GOODS SOLD REDUCED PRODUCTION LOWER COGS Drop in DD&A due to lower production Lifting costs are up from Q2 2008 on FX and higher diesel costs * Lifting costs consist of…
27 Dno international asa EXPLORATION ACTIVITY EXPLORATION EXPENSED EXPLORATION WELLS AND SEISMIC Expensed Suwehed 1, Dagah 1 and Tasour 17S exploration wells in Yemen at total cost NOK 45 million Expensed Sangussi 1 exploration…
Third quarter 2008 28 INCREASED EXPLORATION TOTAL EXPLORATION CAPITALIZED EXPLORATION Capitalized exploration wells (NOK 76 million) in Kurdistan and Yemen Capitalized 3D seismic (NOK 31 million) on Hawler discovery in…
29 Dno international asa TOTAL CAPITAL EXPENDITURE CAPEX CATEGORY CAPEX PER SEGMENT
Third quarter 2008 30 Q3 AND YTD NETBACK VARIANCES Q3 2007 VERSUS Q3 2008 YTD 2007 VERSUS YTD 2008
31 Dno international asa CASH FLOW COVERAGE SOURCES AND USES OF CASH CASH FLOW COVERAGE
Third quarter 2008 32 CAPITAL STRUCTURE ASSETS EQUITY AND LIABILITY Cash: NOK 219 million Financial assets: NOK 1,419 million Net debt to cap: 39 per cent Equity ratio: 49 per cent
33 Dno international asa
Third quarter 2008 34 TAKING STEPS TO SECURE OPERATIONAL FUNDING TAWKE FIELD INVESTMENTS NEAR COMPLETION Successful technical completion, with strong well capacity Ready to quickly increase production Strong cost oil position USD…
35 Dno international asa GUIDING 2008 YEMEN Full year production for 2008, maintained at 9,000 bopd Exploration expenses, including 2D seismic of NOK 150 million in in 2008 (NOK 98 million YTD) Capital expenditure of NOK 400…
Third quarter 2008 36 SUMMARY FINANCIAL PERFORMANCE Q3 cash flow and profits reduced by production halt and expensed exploration YTD cash flow remains solid, backed by strong production and oil prices ONGOING VALUE…
37 Dno international asa FORTH QUARTER 2008: 19 FEBRUARY 2009 WELCOME BACK
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