DNO provides an update of the drilling results from Kurdistan/Northern-Iraq and the Republic of Yemen:

Kurdistan/Northern Iraq

Drilling and testing of Tawke # 5A and Tawke # 8 has now been completed. The main objective for the two wells was to appraise the oil discovery confirmed by Tawke # 3 in the deeper reservoir horizons at a more central location of the field.

A comprehensive testing program was carried out in the two wells. Tawke # 5A achieved a gross rate of 9,000 bopd aggregated from three test intervals, with a maximum rate of 6,200 bopd from the most productive interval. Tawke # 8 achieved a gross flowrate of 20,500 bopd aggregated from five tests with a maximum rate of 8,300 bopd from the most productive interval.

The tests results from Tawke # 5A and Tawke # 8 together with the results previously reported for Tawke # 3 (9,000 bopd aggregated from two tests) confirm good reservoir properties and productivity in the deeper reservoir horizons.

A smaller carrier rig has re-entered Tawke #1 with the purpose of re-testing several intervals in the deeper reservoir horizons applying the same testing procedures (including acid stimulation) as for the Tawke # 3, #5A and # 8 wells.

Two additional wells will now be drilled to further appraise the oil discovery in the deeper reservoir horizons (Tawke # 11 and # 12).

Yemen

Drilling of Bayoot SW # 3 (Block 53) has now been completed and a test has been carried out in the basement interval. The well flowed at a maximum rate of 1,880 bopd. This is the fourth well drilled in the Bayoot / Hekma area confirming oil in either the basement or the overlaying carbonates Trucking of oil from the previous discovery wells back to the Sharyoof facilities has been ongoing since the fourth quarter of 2006 at an average gross rate of approximately 600 bopd. In the short term the plan is to increase trucking capacity to also include production from Bayoot SW # 3, but the license partners are now considering building a pipeline back to the Sharyoof field for permanent production of oil from the Bayoot/Hekma area.

Two exploration wells are also currently being drilled in Yemen: Nuzooh # 1 (Block 32) and Thoub # 1 (Block 43). The results from these wells are expected within the next 2-3 weeks.