Dno Asa Ord

Good morning, and welcome to DNO's full year 2025 Interim Results Earnings Call. My name is Jostein Løvås, and I am the Communication Manager here at DNO. As you may understand from the cover photo, we've had a landmark year with lots of celebration. Recently, our Board of Directors and Senior Management were in Kurdistan, marking that 500 million barrels of oil have been produced from our operated Kalki licensing. This photo shows our two chefs, Executive Chairman Bijan Mosavaramani, cutting the cake together with the chef at the talkie field. Now back to Oslo and the results. Present with me here today are Managing Director Chris Spencer and CFO Birgitte Bedelboot-Johansen. And the chairman is joining us online from New York. And we'll kick off the presentation. Please, Bijan, go ahead.

Thank you and good morning to everyone attending this call. We will of course be discussing the interim results for the fourth quarter of 2025 and for the full year. but also taking a peak look at the direction of the company in 2026, our goals, our targets, our plans and programs. As Joostein mentioned, 2025 has been a very transformative year for DNO with milestones and records. He mentioned the great milestone of 500 million barrels produced from the Talke license, that includes the Talke field itself and the Peshgibir field. 500 million barrels produced is a lot of barrels, and this field has outperformed the expectations of many. not necessarily ours, we've always known this is a very important license, and we produce 500 million barrels and many hundreds of millions of barrels still left to be produced from these two fields. So this has been a terrific asset for B&O and I think we've managed it responsibly and safely and well. over the more than 20 years that the DNO has been producing from this license. Going beyond that important celebration and visit that the board and I and senior management paid to Kurdistan in January, I'll say a few words about other records reached by DNO in 2025. Our net production increased significantly by about 43% year on year to 110,700 barrels of oil equivalent per day. That is the highest level reached in the company's 54-year history. boosted in important respects in the second half of 2025, of course, by the transformative acquisition of Sval Energy Group in Norway. Of that total, 111,000 barrels a day equivalent, 54,800 barrels of oil equivalent per day was in the North Sea. and an almost equivalent amount of 52,600 thousand barrels of water per day equivalent in Kurdistan. So the company is now about evenly balanced between the North Sea, most importantly of course Norway, and also Kurdistan. So our two legs are now about of equal size, and they're both very strong and robust. We have a smaller leg in West Africa where we produced last year 3,300 barrels of oil equivalent per day. Most of that is gas in the Ivory Coast. The figures picked up in the fourth quarter of the year with net production of as much as 88,300 barrels of oil. equivalent per day in the North Sea and 58,000 barrels of oil equivalent per day in Kurdistan. Our revenues in 2025 more than doubled year on year to close to $1.5 billion. That's a very significant figure, of course, for us. with cash from operations also nearly more than doubling to $929 million last year. Our operating profit was strong, increasing to $513 million, while net profits stood at a negative $25 million. That reflects, importantly, the the income tax in Norway and net financial expenses, and our CFO, Birgitta, will go into some detail on those numbers. And Chris will, in his coming presentation, go over operation issues and then talk about both in more detail the figures that I just presented and our plans for 2026. which are very exciting as well. We now have a very strong platform coming out of 2025 to go into 26 and into the ensuing years. One final point from me, the Board of Directors yesterday approved another quarterly dividend of NOC 0.375 per share to be paid to our shareholders later this month. Last year, our total dividends paid to shareholders was $130 million, again in 2025. And I should also note that we have been paying quarterly dividends consistently since August of 2022. And we're pleased to have that also as part of our ongoing targets is to prioritize our shareholders. and pay quarterly dividends on the back of our performance. So with that introduction, I now pass this on to our managing director, Chris Spencer, to cover the operational issues. And I will stay, of course, in the meeting and happy to respond to questions together with my colleagues. during the Q&A at the end of the presentations. So thank you, and Chris, if you would please resume the presentation.

Thank you very much, Bijan, and good morning from me, from Cold, Oslo. So, as Benyam mentioned, I'll take you through the operational aspects of our quarterly report. And as the title of the slide, I'm starting in Kurdistan, obviously, and as the title of the slide indicates, we are putting our foot back on the accelerator in Kurdistan. As the previous slide mentioned, 2025, however, was characterized by tremendous resilience in that region and that's really the first couple of bullet points that we have on the slide are alluding to that. So notwithstanding the production deferment resulting from the drone strikes back in July, our team did a fantastic job recovering from that and we managed to average 70,000, just over 70,000 barrels of boiler goodland per day throughout the year. And you can see from the numbers how the recovery panned out, because by fourth quarter we were back at 77,000 barrels a day, roughly. And that, looking back, we highlighted it in several of the quality presentations last year, but it's a real credit to both the team and the quality of the assets that we have in the region. and compares very favourably with the 2024 average production rate of about 79,000. So, despite not drilling for two years, the team has kept pretty much a flat production, apart from when we've been hit by drones. So, as BJ mentioned, we've been celebrating 500 million barrels, but I think that that performance the last couple of years has illustrated for us that there's plenty of potential left in the Tauke and Peschke beer fields, and that is one of the reasons why we've decided, after a 30-month hiatus, to get back to drilling. That has started already. We have, in December, we kicked off our two-rig, eight-well, program, so it's a little bit in 25, but mainly 2026. And that's the company-owned Syngy rig, and one contracted rig from our long-term partner, DQE. Second contracted rig and third rig in total is now being signed up, another DQE rig. And so we, by April or so, we should have two Vigarigs and Cindy all working in the TAPI licence. That makes us by far the most active international operator in the region once again. Of course that means increased capex this year, but that's good news, good money spent. It's going to have very short return on investment times and of course as a reminder to everyone the cost that we all cost that goes into the county licence is recovered as we spend it under the cost recovery mechanism in the PSC but of course that requires one to be paid which I'll come back to On the back of that resilience that we've seen from the assets and our ability to maintain production at around the 80,000 mark, combined with the brilliant program that we're now putting in place, we have our target to hit 100,000 barrels a day of gross operating production. DNO share would represent 75,000 working interest and as you as you will if you've read the press release you will see we're guiding an average of 65,000 DNO share from a tariffy license this year as I touched on the cost recovery of course requires one to be paid And this was a key driver, as we discussed before, for the choice we made to continue to sell our oil to a local buyer, where payment, we call it, we use the shorthand cash and carry, but it's actually a bank transfer, international bank transfer. and we make sure the money hits our account before we hand over any oil. So we have that payment certainty in an uncertain region. We're not content with that, however. We're very pleased that Baghdad Airbill and other producers agreed to get back to using the export pipeline last year. I think that's very positive for the country. And the buyer of our oil puts it into the export pipeline as well. So with that reopening, we hope there are and aim to find a way to get back into export markets or export pricing for our own oil during 2026. And that's a key aim for us this year. Moving on to North Sea and a couple of general themes here. First of all, the slides talk to the business model of the North Sea where we're doing exploration and identifying upsides in existing assets, maturing those into resources, reserves, production and therefore dollars. And, as you know, DNO is pushing hard to fast-track that process wherever we go, trying to shorten the cycle time from initial investment to return on that investment. And that is one of the themes that runs through the slides we have for you. The other, of course, is the impact of the SWAL acquisition on that business model for us. and the operational financial synergies that we are realizing from that transaction. So we maintain our active but focused exploration portfolio. We're making discoveries and then we are impatient to get those on stream. We've guided 82,000 of net production for this year from the portfolio, which gives us that financial and tax efficiency for the fast track development model that we're pursuing. We just gave for your reference here the pro forma figures as if we had owned Sval throughout last year just to give you a sense of where the assets stand. Of course for DNO shareholders this is the first year where we have the full effect of Sval production. The increase in production that Bijan mentioned is the real number for DNO shareholders to consider, but the 81,000 just gives you a sense of where the assets have been performing and that we're tweaking those up this year as well. Many, many fields that we're involved in now, as the slide says, the recent highlights of the startup of Anvar and Badanda. But as we show in the slides, this is part of the conveyor belt of opportunities that we're working on for ongoing developments that have been sanctioned and are in halfway through the projects with startups in the next few years. And that means that we need to ramp up that it can fix a little bit. Again, in Kyrgyzstan, we have the costs being cost recovered. In Norway, as most of you know, these are tax deductible when you have a portfolio such as we have now with 82,000 barrels a day of production. We are also realising costs in English mensual acquisition. downsizing and streamlining the team. That does realize cost synergies but I think from my perspective that's much more about getting the right team, streamlined, efficient team in place to go after the business model we're pursuing and I would say that we have a fantastic team. We've actually had to let some good people go. in order to get the right size team, because we believe that an efficient team is the way to run the business. And then back to the conveyor belt of exploration through to production and dollars. Right at the front end of that is, of course, the APA licensing rounds that we are very active in in Norway. And again, we had a very successful round. I think we were ranked third in terms of the number of licenses received from the Ministry. We move on to the next slide. This one, we think, speaks for itself. really pleased to show the progress that we've made since we announced the acquisition, which was the yellow dotted line here. So back in March, when we came to the market and started raising money on the back of the acquisition, this is what we expected to achieve from the combined portfolios. And as you see, we've been I was going to say pleasantly surprised, but we've also been working very hard to make this happen. So the projection now looks better and of course this is our daily work that we are seeking to improve this further. And again, you know, you see from the different colours, this life cycle I'm talking about of working through from expiration and upsides are shown here through the 2C category into 2P and then out the back in production and dollars, which is what then comes back for capital allocation to dividends and reinvestment in the business. So I think that one speaks for itself as a very strong development for the outlook for our business. A subset of that is of course the four discoveries that I touched on earlier. The interesting thing here is that those are in a prime core area for us. This is one of the core areas that we highlighted for operational synergies, again on the back of the acquisition, and you see that coming through. So we have very strong production from the Nova field, which is not actually labeled here, but it's just to the southwest of the hub. And that is what also the Shutkarka development is to be tied back to Nova and Integra. So great example of the operational synergies that we were hoping to achieve. And Shutkarka is also the best example of fast tracking that we are looking for, where together with ARCA BP, we are going to have that in production three years after discovery. and that we are trying to replicate across the portfolio. Also, as you see from the statistics on the slide, the fast track is not done by sacrificing the sort of break-even price for these developments. $40 to $45 per barrel seems to be very much part of the course on the NCS when I look around the industry. And as I've touched on a few times, we have many other discoveries in our portfolio where we're trying to unblock timelines and get fast track developments moving. And if they'll take the next slide, please. And then we go back to the ones that we're trying to add to our hopper. And so we're back, very active exploration appraisal program again. $200 million spend, again tax deductible. I have to be careful how I use that phrase because I don't want to give the impression that we don't care about costs. We are very cost focused, but investors should be aware that those hard spent dollars are still tax deductible in Norway. Hey, very excited, wells coming up this year. I'm not sure what to touch on, but of course there's two appraisals there of very significant discoveries that we've made, Carbon and Norma. So I'm excited by the outcomes there. And numerous exploration wells. Schroeder is worth just mentioning because that's a higher risk than all of the others but we have a carry arrangement there so for us financially it's not such a high risk on the chance of success since we have the carry. We've added a column to this slide as well to try to express what we're working on which is that one thing is whether you find something or not which is the traditional geological chance of success on the left The other is how quickly and efficiently you can bring that into production. And so we're trying to give you a sense of that on the chance of commerciality column, as you would expect from what we've been saying before. If we have discoveries, then we see the chance of commerciality for all of them as medium to high. The second bullet point in the slide explains that a little bit more, where there's three examples there where exploration prospects are going into licenses where you've already got discoveries that are heading towards development. So they should be able to piggyback very quickly on the back of that. Another example is Carmen, where the adjacent Atlantis discovery is being matured by Acronor for Tyvek to VTR, where we have a 19% interest. And so if there's that also should be able to hop on the back of Atlantis and be developed rapidly. In the interest of time, sorry, I could go on all day on these topics. Let's move on. And I think I'm now handing over to the CFO, Brigitte, to take you through the numbers.