DNO ASA - Farm-out agreement on NCS

Det Norske Oljeselskap AS ("DNO"), a wholly owned subsidiary of DNO ASA, has signed a Sales and Purchase Agreement ("SPA") to farm-out parts of its working interests in 8 licenses on the Norwegian Continental Shelf ("NCS") to PA Resources Norway AS ("PAR").
 
The SPA sets out terms whereby the costs of up to 6 exploration wells relaiting to DNO's retained working interest, at a cumulative budget cost of NOK 285 million excluding contingency, will be carried by PAR. Through the rig contract announced on 16th January 2006, DNO has secured 340 rig days which should allow for drilling of 6-8 wells within DNO operated licenses during the 3 years period starting 4th Quarter 2006.
 
The transaction relates to the following licences on the NCS:
 
PL 001B/PL242
(including the West Cable discovery and West Cable North and Draupne
prospects):
 
- 15 per cent working interest to PAR and 35 per cent working interest retained by DNO.
 
PL 028B
(incl. the Hanz discovery):
 
- 15 per cent working interest to PAR and 35 per cent working interest retained by DNO.
 
PL305/PL305B/PL341 (incl. Lie, Thorkildsen, and other prospects):
 
- 10 per cent working interest to PAR and 30 per cent working interest retained by DNO. 
 
PL332
(incl. 2/2-1, 2/2-2 and 2/2-5 oil and gas discoveries, and one prospect):
 
- 10 per cent working interest to PAR and 20 per cent working interest retained by DNO.
 
 
PL334
(incl. two prospects):
 
- 10 per cent working interest to PAR and 30 per cent working interest retained by DNO.
 
 
Gross unrisked resources within the above licenses are estimated to 491 million barrels of oil equivalents. Following this transaction, DNO's remaining share of the unrisked resources within the above licenses is estimated at 146 million barrels oil equivalents.
 
The effective date of the transfers is 1st January 2006, and the transactions are subject to approval from the relevant Norwegian authorities and the Management Committees of the relevant licences.
 
Managing Director Helge Eide comments:
 
"DNO is very pleased with this transaction which is meeting our important objective to transform resources to reserves at low costs. This also allows for DNO to free additional funds to further accelerate its exploration efforts on NCS during the coming years."
 
DNO ASA
19 January 2006

Contact:
Helge Eide
Managing Director Telephone: (+47) 55 22 47 00 / (+47) 23 23 84 80