February 2011

Yemen production

DNO's WI production in Yemen in February 2011 was 6,040 bopd and the NE production was 4,060 bopd.

Production in Yemen is reported as follows:

The production figures include crude oil consumed in the operation of the Company’s production facilities, at an accumulated WI volume of 290 bopd and NE volume of 190 bopd in February 2011.

DNO has increased its security measures in Yemen to ensure best possible security for employees during the present period of unrest in the country. Operations and production have not been affected.

Kurdistan production

DNO's WI production from the Tawke field in February 2011 was 39,551 bopd out of a field gross production of 43,946 bopd. The gross production delivered for export in February was 38,366 bopd of which DNO´s WI share was 34,529. The gross delivery to the local market was 5,077 bopd of which DNO´s WI share was 4,569 bopd. No volumes to the local market have been delivered after mid February.

Production from Tawke is reported as follows:

*) Net entitlement figures will be reported at a later date.

The production figures include crude oil consumed in the operation of the Company’s production facilities, at an accumulated WI volume of 186 bopd in February 2011.

DNO re-commenced export from the Tawke field on 2 February at an initial gross rate of 10,000 bopd. After 10 days the export reached a level of approximately 50,000 bopd. The accumulated gross export delivery from Tawke was 1,074,239 bbls in February.

DNO has also installed facilities at the Fishkabor tie-in area to handle third party export (i.e. oil export by other PSC holders from other KRG producing fields) and during March the exported quantities through the facilities operated by DNO have tested more than 80,000 bopd (of which around 65,000 bopd from Tawke field and the balance from other PSC holders of other fields).

The oil exported during February and March have been recorded and reported to the KRG in compliance with agreed procedures. We have been advised by the KRG that this will form the basis for payment instruction to be submitted by the KRG to the Ministry of Finance in Baghdad for processing as per the payment mechanism agreed between KRG and the Federal Government in Baghdad.

The gross export deliveries from Tawke in March are expected to be around 1,350,000 bbls, equal to 43,500 bopd. Export from Tawke was halted for 7 1/2 days in March due to repairs of the Iraq-Turkey pipeline. Adjusted for this, the gross production while exporting is estimated at around 57,000 bopd.

Drilling and well operations

Kurdistan Region of Iraq

DNO is drilling a horizontal section into the Bastora-1 well to penetrate carbonate fracture systems from a horizontal wellbore to increase production rates of this zone. This information will be essential for the further evaluations of development plans of the Bastora and Benenan discoveries. Drilling is progressing as planned.

The rig to be used for drilling the Summail-1 well in the Dohuk license is undergoing maintenance and repair at the well site. Spud is somewhat delayed due to prolonged maintenance period and is now estimated to around 10 April.

Yemen

The Alsaiq-1 exploration well in block 47 spudded on 17 March and drilling is progressing according to plan. As previously reported, the block 47 partners have agreed to develop the Yaalen/Sharnah discovery with estimated start of production in Q1 2012. A formal notice of commercial discovery was delivered to the Ministry on 20 March. DNO is at present negotiating a PSA for block 48.

Mozambique

Drilling of the Inhaminga High-1 well in Mozambique is now completed. One test was undertaken in a possible hydrocarbon bearing interval, but now flow was achieved during this test. The well is now plugged and abandoned, and the commitment program on the Inhaminga Block in Mozambique is now completed.

Based on the results from the Chite-1 and Inhaminga High-1 wells DNO will re-evaluate the hydrocarbon prospectivity within this area.

Oslo, 31 March 2011

DNO International ASA

Corporate Communications

Oslo, 1 March 2011 

DNO International ASA Corporate Communications