DNO ASA - Operational and Financial Results - Fourth Quarter and Full Year 2005

Successful implementation of DNO's strategy has contributed to strong operational and financial achievements in 2005. The company's oil production was 14.741 BOPD (Working Interest) in 2005, up 5,4 % from last year. A reserve growth of nearly 152,8 % and Finding, Development and Acquisition ("FD&A") cost of 2,2 USD are strong indicators of the company's ability to add new reserves at low costs.

 

During the year DNO continued to expand its portfolio of petroleum licenses, which had increased at year end to 24 licenses, of which 12 as Operator. A new milestone was also achieved in 2005 when DNO commenced operations in Northern Iraq, and in November 2005, the company spudded its first exploration well in this region, following extensive seismic acquisition.

 

Since year end, DNO has also added a further 30 million barrels in 2P reserves, following exploration success on the Goliat oil discovery in the Barents Sea, Northern Norway.

 

 

As previously announced in the Stock Exchange Notice on 9th February 2006 the company has decided to change the consolidated IFRS accounts from working interest to net entitlement method. More information on this is presented in the interim report and the investor presentation available at DNO's web site www.dno.no. The financial highlights below are presented on working interest basis.

 

 

 

Sales for the full year 2005, net of hedging losses, were NOK 1 528,3 million (NOK 1 132,7 million), leading to an EBIT of NOK 892,4 million (NOK 560,6 million) and a profit before income tax expenses of NOK 1 021,1 million (NOK 481,0 million).

 

Net income for the period was NOK 268,3 million (NOK 43,1 million).

 

 

 

The Company's performance in the final quarter of the year was positively affected by increased production from the Nabrajah operations. Sales in the quarter increased to NOK 477,5 million (NOK 338.0 million), leading to an EBIT of NOK 271,7 million (NOK 203,7 million) and a profit before income tax expenses of NOK 319,3 million (NOK 117,8 million).

 

Net income for the final quarter of the financial year was NOK 139,8 million (NOK 10,3 million).

 

Commenting on the results, Helge Eide, Managing Director of DNO said:

 

 

 

 

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DNO ASA is an oil and gas exploration and production company based in Oslo, Norway.

 

The company has a diversified, risk balanced portfolio with interests in Norway, UK, Yemen, Northern Iraq and Africa.

 

Hydrocarbon production is focused on its operations in Yemen and Norway, with current daily production of approximately 18,000 BOPD. The Company has recently commenced production on its Nabrajah concession in the Yemen, which will increase daily output in 2006.

 

During 2005, the Company increased its reserve base by more than 150 % primarily through exploration and acquisitions. Following one additional oil discovery early in 2006, DNO currently holds proven and probable reserves of more than 100 million barrels.

 

In 2006 the Company will increase its exploration activities across all of its core areas of interests, and DNO plans to participate in 22 exploration wells throughout the year, of which 15 as Operator.