DNO ASA - December production report and drilling status

  •  DNO's production in the fourth quarter was 15.762 bopd, with the average realized oil price in the quarter being 72,71 USD/bbl.
  •  Exit production for 2007 increased to  18.000 bopd, up 40 % compared to the 2006
  •  In the Kurdistan region of Iraq, the Hawler # 1 exploration well has encountered strong indications of oil in several reservoir horizons while drilling. As a result of these observations an extensive test program will be carried out in the well.
    Working Interest (WI)
    DNO's oil production (WI) is reported as follows:

    *) Production in Norway is from 1st November 2007 included in Det norske oljeselskap ASA (previous Pertra ASA), which is an associated company to DNO ASA.
    The slight drop in Tawke production in December compared to November was due to the holiday season during second half of December. However the production at year end increased to approximately 7.000 bopd.
    In Yemen two new wells have recently been brought on stream (Godah # 8 in block 32 and Nabrajah # 16 in Block 43). DNO's share of the production from Yemen at year end was approximately 11.000 bopd.
    Net Entitlement
    Net entitlement production for October, November, December and 4th quarter 2007 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 facilities, at an accumulated volume of 490 bopd during December 2007 and 405 bopd during 4th quarter 2007.
    Tawke Wells

    Following testing of Tawke # 1 which delivered a maximum flow rate of 23,000 bopd aggregated from three tests, the carrier rig re-entered Tawke # 2 for final completion. The rig has now moved to the Tawke # 12 location to drill the Cretaceous reservoir section. Thereafter the well will be tested, and if commercial oil rates are achieved the well will be completed as an oil producer.
    Exploration Drilling
    The two larger rigs under operations by DNO were released from the Tawke field in November after drilling Tawke # 11 and # 12 to the top of the Cretaceous reservoir horizon. Both rigs are now drilling exploration wells in other areas of the PSA's.
    Erbil PSA Area
    Drilling of the Hawler # 1 well commenced on 14 November 2007 as the first well in the Erbil PSA. The well has now reached a depth of approximately 3.400 meters. While drilling through the top of the Cretaceous reservoir horizon an influx of oil was observed.  Oil shows have also been observed in several additional intervals while drilling. The forward plan is to install a 7" liner and prepare for an extensive test program in the well. Before commencement of the testing the well will be further deepened to evaluate some additional potential reservoir horizons.
    If the tests confirm commercial flow rates an appraisal well will be drilled immediately after completion of Hawler # 1.
    Dihok PSA Area
    Drilling of the Summail Extension # 1 well commenced on 19 November 2007. The well is currently drilling at 2.160 meters with the total target depth of the well being approximately 4.000 meters. The Summail Extension prospect is located in the south-western area of the Dihok PSA.
    Seismic acquisition is also currently ongoing and another 8 leads and prospects have so far been identified as potential future drilling targets in the Dihok PSA area.
    All 3 rigs operated by DNO in Kurdistan region of Iraq are expected to be in operation throughout 2008.
    Block 32
    The Berhout #1 exploration well commenced drilling in November 2007 and was drilled to a total depth of 1.821 meters and subsequently plugged and abandoned as a dry well.
    The drilling rig then moved to drill the Godah # 8 development well which was brought on stream at an initial gross flow rate of approximately 750 bopd (DNO's share is 293 bopd). The rig thereafter moved to drill the Yaalen # 1 exploration well which is the Company's first exploration well in Block 47.
    Block 43
    The Nabrajah # 16 well commenced drilling in October and reached its total depth in December. The well was brought on production at year-end delivering an initial gross flow rate of approximately 1.100 bopd (DNO's share is 710 bopd).
    The rig has now been moved to drill the Dagah # 1 exploration well which commenced drilling on 9 January 2008.
    Block 53
    Drilling of Bayoot SW # 4 commenced on 18 November 2007. Oil shows have been observed while drilling the Basement which is the main target of the well. As previously reported to the market the Bayoot SW # 3 tested 1.600 bopd from the Basement within this area, and oil from the well has thereafter been transported by tanker trucks to the Sharyoof facilities. It is expected that several additional Basement wells within this area will be drilled during 2008.

    DNO International ASA
    17th January, 2008