DNO International ASA - March Production and Drilling Report

PRODUCTION REPORT
 
The Working Interest (WI) production to DNO in the first quarter was 17,452  bopd, which up 11 % compared to the previous quarter.
 
The Net Entitlement (NE) production to DNO in the first quarter was 14,403 bopd, with an associated realized oil price of 61.96 USD/bbls.
 
 
Working Interest (WI) Production.
 
 
DNO's oil production (WI) for 1st quarter is reported as follows:
 
 
 
*) As part of the change in Tawke PSC terms DNO will be entitled an additional volume of 82,558 barrels produced from start of production in June 2007 until 12th March 2008. This additional volume is booked in 1st quarter 2008 (82,558 / 91 days = 907 bopd).
 
 
The gross production from the Tawke field in the 1st quarter was 6,872 bopd. This is slightly above the plan and up 50 % compared to the previous quarter.
 
DNO's share of the gross production from Tawke in the 1st quarter is 95 % from 1st January until 12th March, and 60 % thereafter. This arrangement will remain in effect until the gross revenues from Tawke reach USD 484 million, or USD 291 million net to DNO. Thereafter the standard PSC terms will apply.
 
Tawke production was lower in March due season holidays. This combined with the change of PSC terms resulted in lower production to DNO from the Tawke field in March.
 
 
Net Entitlement (NE) Production.
 
Net entitlement production for 1st quarter 2008 is shown in the table below:
 
 
 
The production figures (WI and net entitlement) include crude oil consumed in the operation of the Company's production s facilities, at an accumulated volume of 306 bopd during 1st quarter 2008. (Crude oil consumed was 301 bopd during January 2008, 316 bopd during February 2008 and 303 during March 2008).
 
 
SUMMARY OF ONGOING DRILLING ACTIVITIES
 
Yemen
 
Block 32
 
Rig 905 was moved from Maleen # 1 to the Godah field in mid-March to drill the Godah # 9 development well. The Godah # 9 well was spudded on 28th March 2008 and the well is now put on production with an initial average gross flow of approximately 340 bopd. The rig will now be moved to Block 47.
 
Block 43
 
Nabrajah # 17 was spudded 7th March and drilled as a Qishn producer. Nabrajah # 17 is now brought on stream with an initial average gross flow of approximately 700 bopd. Rig 908 will now be moved to drill the Mesari # 1 exploration well within the same block.
 
Block 47
 
Rig 900 spudded well Sharnah # 1 on 28th March as the second exploration well in the block. Good indications of oil in the Qishn reservoir were observed both during drilling and from wire line logs. 7 "casing is currently being installed and the well will be tested. Once the testing is completed the rig will move to the Yaalen # 1 oil discovery well for testing. In addition the Yaalen # 2 well is expected to be spudded in the near future with rig 905 currently on move from Block 32.
 
 
Block 53
 
Following completion and testing the Bayoot SW # 5 well rig 919 was moved to the Sharyoof field to drill two development wells. The Sharyoof # 29 development well was spudded 20th April.
 
 
Kurdistan Region of Iraq
 
Tawke # 11 within the Tawke PSC,  is scheduled to be re-entered within 1 week using the carrier rig to drill and test the Cretaceous reservoir section.
 
The Hawler # 1 exploration well within the Erbil PSC area is still undergoing testing and the Summail Ext. # 1 exploration well has not yet reached the final drilling targets.
 
 
DNO ASA
25th April, 2008