DNO reports the February 2008 production figures together with an update on drilling activities.

PRODUCTION

The accumulated net production to DNO in February 2008 was 0.52 million barrels, equivalent to 17,760 bopd and up 2 % compared with January 2008.

DNO's share of the test production from Tawke has to date been reported on 95 % basis (net of 5 % royalty). As a result of the reviewed Production Sharing Contract (PSC) terms which became effective of 14 March 2008, DNO will receive 60 % of the Tawke production going forward (net of 10 % royalty), until the Company has received a total cumulative revenue of USD 290 million (ref Stock Exchange Notice dated 14th march 2008).

The Company expects to deliver a first quarter production above the guided target of 16.000 bopd.

Net Entitlement Production

The production figures (WI and net entitlement) include crude oil consumed in the operation of the Company's production s facilities, at an accumulated volume of 301 bopd during January 2008 and 316 bopd during February 2008.

DRIILING ACTIVITIES

KURDISTAN - NORTHERN IRAQ

Tawke PSC area

The Tawke # 12 well was drilled to a total depth of 2.753 meters. The well tested approximately 9 000 bopd aggregated from two tests in the Cretaceous interval. The flow rates are assumed to be restricted by surface test equipment.

Oil shows were also observed in the Jurassic interval but no flow rate was achieved during testing. The Jurassic interval will be subject to further evaluation within the Tawke area and a future Jurassic well at a more optimal location will be considered.

Tawke # 12 ha now been completed as a Cretaceous producer. The rig will undertake a work-over in Tawke # 5 before it will be moved to the Tawke # 11 location to drill and test the Cretaceous reservoir section.

Dohuk PSC Area

The Summail Extension # 1 well is currently drilling at 3.539 meters meters, and is planned to be drilled to a total depth of 4.000 meters. Seismic acquisition is also ongoing in the Dohuk license area, and is approximately 50 % completed.

Erbil PSC Area

As previously reported, an open hole test in the Hawler#1 well was conducted in the Jurassic interval delivering approximately 9 000 barrels of oil and 11 million standard cubic feet per day through a 1" choke size. These flow rates are assumed to be restricted by surface test equipment.

After completing the open hole test in the Jurassic interval some equipment was left in the well bore. After failing to recover this equipment the well will now be plugged back and testing of the Cretaceous interval will be undertaken. After completing the full test program in Hawler # 1 an appraisal well is scheduled to be drilled targeting both the Cretaceous and the Jurassic intervals.

YEMEN

Block 32

The Maleen # 1 well has been drilled to a total depth of 1.887 meters. The main objective of the well was to test a potential oil accumulation in the Qishn reservoir at a location to the west of the Tasour Field. The Qishn formation was confirmed to be water bearing at this location and the rig will now move to the Godah Field to drill the Godah # 9 development well.

Block 43

The Nabrajah # 17 development well has reached its total depth of 2,696 meters. The well confirmed oil in the Qishn reservoir but penetrated the reservoir slightly deeper than the prognosis. The well will be side-tracked to penetrate the Qishn reservoir at a more up dip location before the well will be brought on stream as a Qishn producer.

Block 47

As previously reported, oil was observed in the Yaalen # 1 exploration well while drilling through several intervals, and oil was also retrieved from wire line fluid sampling both in the Qishn sandstone as well as in the Kohlan sandstone immediately above the Basement. The well will be tested using a smaller rig, and the testing is expected to commence during April. Drilling of the Sharnah # 1 exploration commenced on 28 March, which is the second exploration well in the license. The Sharnah prospect is located approximately 20 km north of Yaalen # 1.

Block 53

Both the Bayoot SW # 4 and Bayoot SW # 5 wells have been testing the fractured Basement, Bayoot SW # 4 confirmed a gross flow potential of approximately 1.500 bopd , while Bayoot SW # 5 confirmed a flow potential of approximately 2.500 bopd. Oil from both wells is now being transported to the Sharyoof main facilities by tanker trucking.

The total gross well production capacity from the Bayoot area is now approximately 5.000 bopd. Although such volumes can be handled by tanker trucking, permanent development scenarios for this area are currently under consideration by the Block 53 partners. It is expected that two additional wells will be drilled within the Bayoot area later in 2008.

Tags: DNO