DNO announces an update on the activities in Kurdistan.

HIGHLIGHTS:

• An extended production test of Tawke # 5 delivered a maximum flow rate of 9,860 bopd

• Tawke development wells are now being subject to extended production testing in preparation for permanent production as well as to gain reservoir data

• Oil produced during extended flow testing is being collected in storage tanks

• Pre-commissioning and final testing of the first phase of the Tawke Early Production facilities is expected to commence shortly

• First oil production from Tawke will commence less than 3 years since DNO was first awarded the license and less than 12 months since the company announced the Tawke discovery.

DRILLING AND TESTING STATUS

Tawke # 5:

Tawke # 5 was successfully drilled as an oil producer on the Tawke Field and is located some 1.1 km east of the Tawke # 4 well. After the well reached total depth, the well was completed as an oil producer and the drilling rig was released and moved to the Tawke # 6 location some 2.7 km south-west of Tawke # 5. Tawke # 5 was then production tested.

At the initial stage of the test, the well was tested for maximum flow capacity at a rate of 9,860 bopd. In order to obtain information about the reservoir characteristics of the Tawke field, an extended flow test at lower rates was then undertaken of the Tawke # 5 well. The well was flowed for several days and produced at a stable rate of approximately 4,500 bopd during two flow periods.

Three additional wells will now be started for clean-up and extended flow tests, with the same objectives as for Tawke # 5, and as part of the preparations for the oil to be processed by the permanent production and export facilities installed at the Tawke Field. The duration of the extended test campaign of the three wells is expected to last several weeks.

In line with good oilfield practises and with DNO's environmental policies, flaring of oil will be avoided during the extended testing. The oil is therefore collected in storage tanks.

Commenting on the results Managing Director Helge Eide says, "We are very pleased with our achievement in Kurdistan to date. We made the Tawke oil discovery in our first exploration well, and delivering first oil production within less than one year from this discovery demonstrates our capability to undertake fast-track exploration and development completing the first stage of the Tawke Early production Development will mark a new important milestone to Kurdistan Regional Development and DNO."