DNO ASA - January Production and Yemen Drilling Update

January Production:
 
 
Working Interest
 
DNO's oil production (WI) for January 07 and December 06 was as follows (bopd): 
 
 
The January production increased by 114 bopd compared to December 06.
 
DNO estimates that the oil production to the Company will increase to approximately 26,000 bopd by year end, and that the average 2007 production will be 20,000 bopd.
 
 
Net Entitlement
 
The January net entitlement estimates will be presented in the February production update.
 
 
Yemen Drilling Update:
 
 
Block 53 (24,45%)
 
In Block 53, Sharyoof # 24 was brought on production at the Sharyoof Field with an initial gross oil rate of 1,100 bopd. Another infill well on the Field, Sharyoof # 25, is due to be spudded this week. Sharyoof # 25 is planned as a water injector, and drilling is estimated to take approximately 20 days.
 
Testing of Bayoot South # 1 has been completed and the well flowed at stable rate of 370 bopd from carbonate reservoirs.
 
Bayoot South # 1 is the one of three oil discovery wells that has been drilled and tested within the Bayoot / Hekma area located some 10 km south of the Sharyoof Field.
 
As previously reported Bayoot SW # 2 flowed 700 bopd from fractured basement,   and Hekma # 1 flowed 800 bopd and 1,200 bopd from two individual deeper sandstone reservoirs resepectively.
 
Based on the results from the three oil discovery wells the P50 gross reserves within the Bayoot / Hekma area is estimated at approximately 17 million barrels (5 million barrels net to DNO, pre-tax). 
 
From the recent drilling results it is becoming clear that this area in the southern part of Block 53, contains an exciting potential. Out of 4 recent wells drilled within this area, 3 wells have proven oil. Although tests to date has not yielded production rates at levels achieved from the shallower Qishn sandstones, higher production rates could be achieved through other drilling, completion and stimulation techniques.
 
Initial test production from the three oil discovery wells has commenced by trucking back to the Sharyoof Field, but tie-back to Sharyoof facilities on permanent basis is under consideration.
 
 
Block 43 (56,67%)
 
Following the interpretation of the new 3-D seismic acquired across the Nabrajah Field during second half of 2006, drilling has been resumed at Nabrajah. Drilling of Nabrajah # 12 commenced on 21st February and will be a Qishn infill target. Thereafter the plan is to drill Nabrajah # 13 which will test a new possible play concept.
 
Block 44 (65,1 %)
 
Ardah-1 exploration well has been spudded 24th February to test a Qishn reservoir prospect as well as explore for deep carbonate reservoirs. This is the second exploration well drilled by DNO as the Operator in the block, and the drilling of the well is estimated to take 35 days.
 
 
 
DNO ASA
February 27, 2007