In order to clarify the background and legal validity of DNO`s Production Sharing Agreement`s (PSA`s) signed with Kurdistan Regional Government (KRG), DNO has prepared two documents:
- A Note containing an extract of the clauses in the new Constitution of Iraq which are relevant for the PSA`s.
- A Note with a list of questions and associated answers relating to issues that would further clarify the history and legal validity of the PSA`s.
The two notes are attached to this Stock Exchange Release, and will also be available on DNO`s web site www.dno.no.
DNO signed the PSA`s with KRG on 25th June 2004. During the following months the company established a project organization which has undertaken significant work to prepare exploration activities within the area defined by the PSA`s. During 2005 seismic acquisition was undertaken covering an area of 440 square km and drilling of the first exploration well commenced on 28th November 2005, some 17 months after the signing of the PSA`s.
Although the first drilling results released to the market on 23rd December were encouraging, further drilling, data acquisition and evaluations are required before it can be concluded if there is a commercial oil discovery.
DNO will continue the exploration work in accordance with the PSA`s, and will do it`s outmost to achieve a successful outcome and to create values to the benefit of all beneficial parties to the project.
11 January 2006
Telephone: (+47) 55 22 47 00 / (+47) 23 23 84 80
Extract from Consitution of Iraq:
Questions and Answers related to the Kurdistan PSAs: