Lundin transaction

In November 2003, DNO ASA entered into an agreement with Lundin Petroleum AB of Sweden for the sale of all of the issued share capital of DNO Britain Limited and Island Petroleum Developments Limited, and the sale of certain assets of Det Norske Oljeselskap AS.

The closing of the transaction covering the company's activity in Ireland and the UK was announced in a stock exchange notice of 16 February 2004.
The sale of the Norwegian assets has now been completed. This includes sale of a 7% licence interest in the Jotun production field, of which ExxonMobil is the operator, a 15% interest in PL203, PL088B and PL036C, of which Marathon is the operator, and various other exploration assets. Thus the entire transaction with Lundin Petroleum AB has been closed.
The effective date of the above transactions is 1 January 2003, and as previously informed, the total cash consideration is about UDS 165 million, which was paid at closing. In addition, certain adjustments, estimated at about USD 45 million, have been made for working capital, cash flow generated and/or funding requirement from the effective date of the agreement to its closing.
In addition, Lundin Petroleum AB has provided an abandonment security which has released USD 35 million in restricted cash to DNO.
After the above-mentioned transactions, DNO's licence interests on the Norwegian shelf are as follows:
-          10% in the Glitne field
-          60% and the operatorship of PL 305
-          15% in PL 229
-          25 % in PL 035 / 272
The company will shortly announce certain organisational changes in the company, but stresses that DNO's experience, competence and capacity as operator and participant in all phases of upstream oil and gas activity are kept intact after the Lundin transaction.
The Lundin transaction releases a substantial part of the value created since DNO's new strategy was launched in 1996. Improved operational flexibility and a strengthened financial position will enable the company to also in the future pursue and create long-term value for its shareholders through investment in new oil and gas projects.