DNO ASA - Operations Update - Yemen

Production operations
As a result of a security incident on the Ash Shihr Terminal on Friday 15th September the terminal was shutdown on a temporary and precautionary basis. As a result of this incident the production from DNO's fields in Yemen was reduced during a shorter time period. The terminal was re-opened later during the day and the production is now back to normal. The incident caused only minor losses of production volumes.
Block 32, Tasour area
As reported in previous stock exchange notices the new well, Tasour # 22ST  came on stream at a gross production rate of approximately 6.400 BOPD, which was further increased to more than 8.000 BOPD after directing the production through the Tasour CPF facilities. The well has until now continued to deliver gross production of more than 8.000 BOPD.
The Tasour # 23 well commenced drilling on 5th September. The well will be drilling a basement prospect within the Tasour area.
Godah # 3 commenced drilling on 4th September and is drilled as a Godah oil producer. The first oil production from the Godah field is expected during fourth quarter of 2006.
Block 53, Sharyoof area
Testing of the basement interval in Bayoot SW # 2 has been ongoing for some weeks. As substantial mud losses occurred during drilling this section the clean-up flow is expected to be time consuming.  After installing an Electrical Semi-submersible Pump (ESP) a max flow of 1.400 barrels of fluid flow per day was achieved. The fluid composition was a mix of mud, oil and gas.  Due to high gas content down hole the efficiency of the ESP was reduced and the well bore was not cleaned up. The testing will now continue using alternative pumps for cleaning up the well flow.
The Bayoot SW # 1 completed a test in the carbonates overlaying the basement. Commercial flow rate was not achieved during the test. It will be considered to re-enter the well and continue testing this zone at a later stage using more extensive stimulation techniques (acid and fracturing).
The Bayoot prospect is located some 10 km from the producing Sharyoof Field, and if commercial oil flow rates are achieved the production can be tied back to the Sharyoof facilities at low costs.
Hekma # 1, which is drilled on another basement prospect within this area, commenced drilling on 31st August.
September 18, 2006
Helge Eide
Managing Director.               
Telephone: (+47) 23 23 84 80