DNO increases Tawke stake, announces settlement of Kurdistan receivables

8/24/2017

OSLO -- DNO ASA, the Norwegian oil and gas operator, has been assigned the 20% interest in the Tawke license held by the Kurdistan Regional Government as part of a landmark settlement of outstanding receivables owed to the Company for past crude oil deliveries. Following the settlement, DNO holds a 75% operated stake in the license containing Tawke and Peshkabir fields with combined proven and probable reserves in excess of 500 MMbbl and production in excess of 100,000 bopd.

In addition to the 20% interest, the Company will receive three percent of gross license revenues each month from the Government over a five-year period. The settlement is effective as of Aug. 1, 2017.

DNO has settled its claims for all outstanding Tawke license receivables from the Government and the Government has exercised its Tawke license audit rights to its satisfaction for the period up to the effective date and has no adjustment claims. The Government has also discharged DNO from certain payment obligations including production bonuses, license fees and a USD 150 million water purification project that is no longer required by the Government.

The removal of these liabilities and the transfer to DNO of the 20% interest and the right to the three percent revenue stream will bolster the Company's balance sheet and future cash flow.

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