Q2 2026 Dno ASA Earnings Call

August 13, 2026

Speaker #1: Excuse me. Okay. Good morning, and welcome to DNO's Q2 2026 earnings call. My name is Jostein Lvs, and I'm the Communications Manager here at DNO.

Jostein Løvås: Okay. Good morning, and welcome to DNO's Q2 2026 earnings call. My name is Jostein Løvås, and I am the Communication Manager here at DNO. Present with me today in Oslo are Executive Chairman Bijan Mossavar-Rahmani, Managing Director Chris Spencer, and CFO Birgitte Wendelbo Johansen, who will take you through the presentation slides. Before we begin, I would like to draw your attention to a slide in today's presentation summarizing DNO's possible offer for Genel Energy, which was announced on 7 August. Due to strict limitations under The City Code on Takeovers and Mergers, we will not take any questions regarding Genel or the potential offer during today's call. Instead, we will refer you to the slide and to the full statement, which has been published on our website through the news messaging service and via RNS. With that, let's move to the presentation.

Jostein Løvås: Okay. Good morning, and welcome to DNO's Q2 2026 Earnings Call. My name is Jostein Løvås, and I am the Communication Manager here at DNO. Present with me today in Oslo are Executive Chairman Bijan Mossavar-Rahmani, Managing Director Chris Spencer, and CFO Birgitte Wendelbo Johansen, who will take you through the presentation slides. Before we begin, I would like to draw your attention to a slide in today's presentation summarizing DNO's possible offer for Genel Energy, which was announced on 7 August. Due to strict limitations under the UK Takeover Code, we will not take any questions regarding Genel or the potential offer during today's call. Instead, we will refer you to the slide and to the full statement, which has been published on our website through the news messaging service and via RNS. With that, let's move to the presentation.

Speaker #1: Present with me today in Oslo are Executive Chairman Bijan Mossavar-Rahmani, Managing Director Chris Spencer, and CFO Birgitte Wendelboe Johansen, who will take you through the presentation slides.

Speaker #1: But before we begin, I would like to draw your attention to a slide in today's presentation summarizing DNO's possible offer for Guinnell Energy, which was announced on the 7th of August.

Speaker #1: Due to strict limitations under the UK Takeover Code, we will not take any questions regarding Guinnell or the potential offer during today's call. Instead, we will refer you to the slide and to the full statement, which has been published on our website, through the news messaging service, and via RNS.

Speaker #1: With that, let's move to the presentation. Afterwards, we will have a Q&A session, but first, let me hand over to Bijan.

Jostein Løvås: Afterwards, we will have a Q&A session. First, let me hand over to Bijan.

Speaker #2: Good morning. Welcome to the Q2 2026 interim results presentation by DNO. I'm joined by my colleagues, who usually attend and present at these quarterly reports.

Bijan Mossavar-Rahmani: Good morning. Welcome to the Q2 2026 interim results presentation by DNO. I am joined by my colleagues who usually attend and present at these quarterly reports presentations. I will just say welcome and say a couple of introductory words before we proceed to discuss the slides. This quarter has been a very strong one for DNO, among the strongest in our history, and our history is a long one. We celebrate this year the 55th anniversary of the formation of DNO, and that is more than half a century. We are still around. Many of the oil companies in the international industry who were operating and active in 1971 when we were formed, are no longer in the industry for different reasons. This makes us one of the oldest of the international oil companies in the world, and we are very proud of that history and of that record.

Speaker #2: Presentations. I will just say welcome and say a couple of introductory words before we proceed to discuss the slides. This quarter has been a very strong one for DNO.

Speaker #2: Among the strongest in our history—and our history is a long one—we celebrate this year the 55th anniversary of the formation of DNO.

Speaker #2: And that's quite a number—it's more than half a century—we are still around. Many of the oil companies in the international industry who were operating and active in 1971, when we were formed, are no longer in the industry, for different reasons.

Speaker #2: So this makes us one of the oldest international oil companies in the world, and we're very proud of that history and of that record.

Speaker #2: This quarter, it was the strongest ever for the company in certain financial metrics, and we're very proud of our performance. Our strong performance has taken place notwithstanding the fact that one of our most important legs—operating legs—of the company, our operations in Kurdistan, were shut in for much of the quarter—most of the quarter.

Bijan Mossavar-Rahmani: This quarter was the strongest ever for the company in certain financial metrics. We are very proud of our performance, and our strong performance has taken place notwithstanding the fact that one of our most important operating legs of the company, our operations in Kurdistan, were shut in for most of the quarter. During that time, and of course, all of you who follow the company and follow the region and the industry know that we have had security events and threats to our operations, as have other companies in the Middle East and in Kurdistan in particular. We used that period while we were not producing for safety and security reasons.

Speaker #2: During that time—and of course, all of you who follow the company and follow the region and the industry know that we've had security events and threats to our operations.

Speaker #2: I've had other companies in the Middle East, and in Kurdistan in particular. But we used that period, while we were not producing for safety and security reasons.

Speaker #2: We used the period—there's a second part of the quarter—to initiate workovers on our wells and even to start drilling new wells, to position the company to start operations and production in particular, when the conditions are permitted.

Bijan Mossavar-Rahmani: We used the period, especially the second part of the quarter, to initiate workovers on our wells and even to start drilling new wells to position the company to start operations and production in particular, when the conditions are permitted, and to have the ability to recover production at a rate that brought us back to where we had been pre-shutdowns. We have restarted production, and my colleague, Chris, will discuss the operations in Kurdistan. We hope to sustain production at the levels that we had before the shutdown over the course of the remaining quarters, but obviously with one eye, always two eyes or four eyes on the security conditions and situation, because paramount for us is the safety and security of our people on the ground, of course, of our facilities as well.

Speaker #2: And to have the ability to recover production at a rate that brought us back to where we had been pre-shutdowns. We have restarted production, and my colleague Chris will discuss the operations in Kurdistan, but we hope to be able to sustain production at the levels that we had before the shutdown over the course of the remaining quarters. But obviously, with one eye always—two eyes, or four eyes—on the security conditions and situation, because paramount for us is the safety and security of our people on the ground, and, of course, of our facilities as well.

Speaker #2: But we hope that we continue to produce in Kurdistan and have a safe and secure operation in the coming weeks and months. At this point, I'd also like to make a quick reference to what Jostein said about the possible offer that we might make for Genel Energy, our partner in Kurdistan.

Bijan Mossavar-Rahmani: We hope that we continue to produce in Kurdistan and have a safe and secure operation in the coming weeks and months. I would also like to make a quick reference to what Jostein said about the possible offer that we might make for Genel Energy, our partner in Kurdistan. We hope that the board of Genel Energy will engage with us as we pursue this opportunity. I cannot, as Jostein said, because of our Rule 2.4 announcement of a possible offer and the conditions set by the Panel on Takeovers and Mergers that governs these matters in London. We cannot say any more about that other than say we hope to engage with the board of Genel and to see how best to proceed on this matter. With that, I will ask Chris to present the operating portion of the presentation today.

Speaker #2: And we hope that the board of Guinnell Energy will engage with us as we pursue this opportunity. But I can't—as Jostein said—because of our 2.4 announcement of a possible offer and the conditions set by the panel that governs these matters in London, we can't say any more about that other than to say we hope to engage with the board of Guinnell and to see how best to proceed.

Speaker #2: On this matter, with that, I'll ask Chris to present the operating portion of the presentation today.

Speaker #3: Thank you, Bijan. And good morning from me. As Bijan has already touched on, another great quarter for DNO—and it really shows what a strong, diversified company we are now.

Chris Spencer: Thank you, Bijan, and good morning from me. As Bijan has already touched on, another great quarter for DNO, and it really shows what a strong, diversified company we are now. We are just over one year on from the Sval acquisition, and yet again, the merits of that acquisition are coming through extremely powerfully in our results. I have talked a lot over the last year about the operational synergies that that combination has unleashed, and you will see more examples of that in this presentation. I think the highlight in this quarter is the diversification. Obviously, as Bijan has described, we had a difficult quarter in our Middle Eastern business in Kurdistan with almost no production. But by having the very healthy North Sea business combined with the high oil and gas prices has meant that we still hit record revenues for the quarter.

Speaker #3: We're just over one year on from the Sval acquisition, and yet again, the merits of that acquisition are coming through extremely powerfully in our results.

Speaker #3: I've talked a lot over the last year about the operational synergies that that combination has unleashed, and you'll see more examples of that in this presentation.

Speaker #3: But I think the highlight in this quarter is the diversification. Obviously, as Bijan has described, we've had a difficult quarter in our Middle Eastern business, in Kurdistan.

Speaker #3: With almost no production, but by having the very healthy North Sea business, combined with the high oil and gas prices, it has meant that we still hit record revenues for the quarter.

Speaker #3: So, the strong, diversified, growth-oriented DNO that we mentioned in our press release today is very clearly evidenced by last quarter. The statistics are in front of you on this slide.

Chris Spencer: The strong diversified growth-oriented DNO that we mentioned in our press release today is very clearly evidenced by last quarter. The statistics are in front of you on this slide. Another very good quarter of production in the North Sea, a bit above what we were expecting. With the prices we achieved, more than compensating for almost zero production in Kurdistan in that quarter. West Africa, our Cote d'Ivoire business, as normal, around 3,000 barrels of oil equivalent, all of which is gas, of course, and a nice cash positive contribution. But of course, it is the North Sea that is dominating the picture. On the back of that, we saw this record revenue of $760 million. We say largely unhedged. It is maybe 1% of the revenue was hedged, so effectively unhedged in our North Sea, and that traditionally has been the DNO approach.

Speaker #3: Another very good quarter of production in the North Sea, a bit above what we were expecting, and with the prices we achieved more than compensating for almost zero production in Kurdistan in that quarter.

Speaker #3: West Africa, our Côte d'Ivoire, business as normal around 3,000 barrels of oil equivalent, all of which is gas, of course. It's a nice cash-positive contribution but, of course, it's the North Sea that is dominating the picture.

Speaker #3: We—on the back of that, we saw this record revenue of $760 million. We—we say largely unhedged. It's maybe 1% of the revenue was hedged.

Speaker #3: So, effectively unhedged in our North Sea, and that traditionally has been the DNO approach. With the great volatility that we've seen this year, that position has been rewarded by not capping the upside from these commodity prices.

Chris Spencer: And with the great volatility that we have seen this year, that position has been rewarded by not capping the upside from these commodity prices. On the back of the high revenue, of course, you see that flowing through the operating profit and the net profit. But particularly gratifying for a simple engineer such as myself is the free cash flow, which is my most important key performance indicator. With this very high cash flow, we have actually paid down $220 million of debt in a quarter with zero production from Kurdistan. Who would have thought that three years ago for DNO? Of course, the board were comfortable to approve the quarterly dividend once again. A few years ago, we pivoted to always our shareholders. We are maintaining that pivot, if that makes any sense, in an English expression.

Speaker #3: On the back of the high revenue, of course, you see that flowing through the operating profit and the net profit. But deeply gratifying for a simple engineer such as myself is the free cash flow.

Speaker #3: Which is my most important performance indicator. And with this very high cash flow, we have actually paid down $220 million of debt in a quarter, with zero production from Kurdistan.

Speaker #3: Who would have thought that three years ago for DNO? And, of course, the Board were comfortable to approve the quarterly dividend once again. And so, a few years ago, we pivoted to our shareholders.

Speaker #3: We are maintaining that pivot, if that is—if that makes any sense. But anything which expression that in any event we continue to provide an attractive dividend yield in addition to the upside potential we see in our equity story.

Chris Spencer: But in any event, we continue to provide an attractive dividend yield in addition to the upside potential we see in our equity story. Moving on to the North Sea. Very strong Q2 production as I have already mentioned, and we had expected things to go slightly worse in the H2 than the H1. So we were expecting a stronger, but it has exceeded even our estimates. What you see in the last quarter, we had a deep dive into the tieback projects that we have ongoing and coming up on the North Sea. My colleague, Morten Grini, for those who are watching gave you a good run through of those projects. Once again, last Q2, you see that portfolio delivering with two new developments coming on stream. This is, as we explained last quarter, very much the model.

Speaker #3: Moving on to the North Sea. Very strong quarterly production, as I've already mentioned. We had expected things to go slightly worse in the second half than in the first half.

Speaker #3: So we were expecting a stronger result, but it has exceeded even our estimates. What you see—and in the last quarter we had a deep dive into the tieback projects that we have ongoing and coming up in the North Sea.

Speaker #3: My colleague Morton Greenie—for those who are watching—gave you a good run-through of those projects. And once again, last Q2 you see that portfolio delivering with two new developments coming on stream.

Speaker #3: And this is, as we explained last quarter, very much the model. You see that with the developments that were approved in the fifth bullet point on this slide.

Chris Spencer: You see that with the developments that were approved in the fifth bullet point on this slide. The fourth bullet point points to yet another value-adding transaction. As I have mentioned the last few quarters, that is another element to our business model in the North Sea, very definitely. Here, it is a great step that we have been looking to do for some time, because we have multiple projects either already tied back to the Ula hub. We have several, including Ofelia, Cerisa, and Yornor in the next bullet point that are being tied back to that hub. We did not have an ownership position there, and the team have managed to get us in with a 5% interest, which is extremely helpful, obviously, when you are tied at so many of these satellites.

Speaker #3: The fourth bullet point points to yet another value-adding transaction. And as I've mentioned the last few quarters, that's another element to our business model in the North Sea—very definitely.

Speaker #3: Here, it's a great step that we've been looking to do for some time, because we have multiple projects either already tied back to the EURA hub, and we have several, including Orphilia, Ceresa North—in the next bullet point—that are being tied back to that hub.

Speaker #3: We did not have an ownership position there, and the team has managed to get us in with a 5% interest, which is extremely helpful, obviously, when you're tying back so many of these satellites.

Speaker #3: So we're very pleased with that transaction, and it comes on the back of a string of similar North Sea either swaps or small acquisitions and small divestments.

Chris Spencer: So we are very pleased with that transaction, and comes on the back of a string of similar North Sea either swaps or small acquisitions, small divestments. So we are turning to production, with the majority of the maintenance shutdowns behind us now and still ahead of our estimates. We are increasing our guidance for 2026 production. We are now estimating we should get about 85,000 barrels of oil equivalent on average through the year. Next slide, please. Turning to the growth side of the business. We are, as we have said many times, very growth-oriented, not only here in the North Sea but looking at the growth in other areas also. The latest in that regard was our Carmen appraisal, which came in in June.

Speaker #3: So with the majority of—we're turning to production, with the majority of the maintenance shutdowns behind us now and still ahead of our estimates. We are increasing our guidance for 2026 production, and we're now estimating we should get about 85,000 barrels of oil equivalent on average through the year.

Speaker #3: Next slide, please. Turning to the growth side of the business, and we are—as we've said many times—very growth-oriented, not only here in the North Sea, but looking for growth in other areas also.

Speaker #3: And the latest in that regard was our Carmen appraisal, which came in in June. You see the results there. And that, of course, is right next to the Atlantis discovery, which is moving forward to development and which we entered through another one of those North Sea deals that we've been delivering. We announced that in March.

Chris Spencer: You see the results there, and that, of course, is right next to the Atlantis discovery, which is moving forward to development and which we entered through another one of those North Sea deals that we have been delivering. We announced that in March, so we discussed that also in the last quarter. Carmen is within, I think, about 20 kilometers. In the same area is the Afrodite discovery, where we picked up a 10% interest. We are hoping for the best on that appraisal, but that is a deep sort of tight gas opportunity, so we will see what comes of that. We are operating on a well at the moment. Four more wells to be drilled in our exploration appraisal portfolio this year. Thank you.

Speaker #3: So we discussed that also in the last quarter. But Carmen is within, I think, about 20 kilometers, and in the same area is the Afrodite discovery, where we picked up a 10% interest. We're hoping for the best on that appraisal, but that is a deep, sort of tight gas opportunity.

Speaker #3: So we'll see what comes of that. But we're operating on a well at the moment, and four more wells are to be drilled in our exploration and appraisal portfolio this year.

Speaker #2: Thank you.

Speaker #3: Over to Kurdistan. And unfortunately, again, the quarter was dominated by the war and the knock-on effects of the war in the Middle East. We had to shut down for the safety of our people and remained so for most of the quarter.

Chris Spencer: Over to Kurdistan, and unfortunately, again, the quarter dominated by the war and the knock-on effects of the war in the Middle East. We had to shut down for the safety of our people and remained so for most of the quarter in terms of production. When the ceasefire was signed, we started to cautiously ramp up activities. Really, the slide describes that cautious ramp up that took place. We have, as Bijan said, the priority, of course, is the safety of our staff. We have put in place extensive passive protection both for the accommodation blocks, but also around our process facilities in the form of big concrete walls, which we are advised is the best way to minimize the impact of the greatest risk we have, which unfortunately is drone attacks. With that in mind, we felt sufficiently comfortable to restart production.

Speaker #3: In terms of production, but when the ceasefire was signed, we started to— and cautiously ramped up our activities, and really, the slide describes that cautious ramp-up that took place.

Speaker #3: We have—as Bijan said—the priority, of course, is the safety of our staff. We have put in place extensive passive protection in both the accommodation blocks, but also around our process facilities in the form of big concrete walls.

Speaker #3: We are advised that this is the best way to minimize the impact of the greatest risk we have, which unfortunately is drone attacks. With that in mind, we felt sufficiently comfortable to restart production.

Speaker #3: But as anyone who reads the news knows, it's a very uncertain environment. And we are not quite daily, I guess, but we're driven by events.

Chris Spencer: But as anyone who reads the news knows, it is a very uncertain environment and we are, not quite daily, I guess, but we are driven by events. We are reviewing security frequently, and I would say we have been close to shutting down again recently. But we are still going. If the security condition allows, we do expect to be able to get the PSC back to around the same level of production as we had pre-shutdown. We are drilling. But really, you cannot get away from the security situation at the moment, and I hope in 3 months' time, we will be able to look forward with more confidence and give better estimates. But at the moment, really, it is anyone's guess. But we are, of course, producing though, and we are, as we have done for the last few years, selling the oil to local traders.

Speaker #3: We're reviewing security frequently, and I would say we've been close to shutting down again recently, but we're still going. If the security condition allows, we do expect to be able to get the PSC back to around the same level of production as we had pre-shutdown.

Speaker #3: And we are drilling. So but really, you can't get away from the security situation at the moment and I hope in 3 months' time we'll be able to say to give to look forward with more confidence than and give better estimates.

Speaker #3: But at the moment, really, it's anyone's guess. We are, of course, producing, though, and we are, as we have done for the last few years, selling the oil to local traders.

Speaker #3: And at the moment, we're getting in the mid- to upper 30s. But as we always do, we've been insisting on being paid internationally before we deliver the oil.

Chris Spencer: At the moment, we are getting in the mid to upper 30s. But as we always do, we have been insisting on being paid internationally before we deliver the oil. So at least we have complete payment surety for our oil. Thank you. As obviously many of you joining the call, if not all, are aware, and Bijan mentioned, on 7 August, we publicly announced our possible offer to acquire Genel Energy PLC. As already mentioned a couple of times, we have strict guidelines from the Takeover Panel that we have to stay within what we stated in that announcement. I think that is fine because I think it speaks for itself. The indicative offer we made is 69 pence per share, which is a premium of 38% to the price of the Genel share the day before we made the announcement.

Speaker #3: So at least we have a complete payment surety for our oil.

Speaker #2: Thank you.

Speaker #3: Ben, as obviously many of you joined the call, or, if not all, are aware—and as Bijan mentioned—on the 7th of August we publicly announced our possible offer to acquire Grinnell Energy PLC.

Speaker #3: As has already been mentioned a couple of times, we have strict guidelines from the Takeover Panel that we have to stay within what we've stated in that announcement.

Speaker #3: And I think that's fine, because I think it speaks for itself. The indicative offer we made is 69 pence per share, which is a premium of 38% to the price of the Grinnell share the day before we made the announcement.

Speaker #3: We believe that if they were to accept this offer, the shareholders of Grinnell would see certainty of value, and that's irrespective of what happens with their offer for Capricorn on the terms that they've announced.

Chris Spencer: We believe that if they were to accept this offer, the shareholders of Genel would see certainty of value. That is irrespective of what happens with their offer for Capricorn on the terms that they have announced. We note that if they do not succeed in taking Capricorn, then Genel will not have the diversification it has been working on for some time and a significant G&A cost burden that we consider to be disproportionate to the company's scale. The proposed offer that we have made is not conditional on completion or lapse of Genel's announced offer for Capricorn. It will not matter what happens in that process to our offer. Genel shares have had a relatively poor trading liquidity in recent history. We consider that our offer represents a liquidity event for those Genel shareholders should they wish to take it.

Speaker #3: We note that if they don't succeed in taking Capricorn, then Grinnell won't have the diversification it has been working on for some time, and a significant G&A cost burden that we consider to be disproportionate to the company's scale.

Speaker #3: The proposed offer that we've made is not conditional on completion or lapse of Grinnell's announced offer for Capricorn. So it won't matter what happens in that process to our offer.

Speaker #3: Grinnell shareholders have had—Grinnell shares have had relatively poor trading liquidity in recent history. So, we can consider that our offer represents a liquidity event for those Grinnell shareholders.

Speaker #3: Should they wish to take it. And for those who elect to take the possible offer of DNO shares, then, as you've seen once again this quarter, that would allow them immediate participation in a strong, diversified and growth-oriented business, with not least an established track record of dividend payments.

Chris Spencer: For those who elect to take the possible offer of DNO shares, then as you have seen once again this quarter, that would allow them immediate participation in a strong, diversified, and growth-oriented business with, not least, an established track record of dividend payments. With that backdrop, we have to decide by 4 September most likely, although there are certain circumstances in which that date can be extended. We will have to decide whether to announce either a firm intention to make an offer or that we are not going to make our, the famously dubbed "put up or shut up" deadline for us. As Bijan mentioned, our hope, as we stated in the 2.4 announcement, is that we could get into some constructive discussions with the Genel board on this offer.

Speaker #3: So with that backdrop, we have to decide by the 4th of December—4th of December, 4th of September, sorry, most likely. Although there are certain circumstances in which that date can be extended.

Speaker #3: But we'll have to decide whether to announce either a firm intention to make an offer or that we are not going to make our, what is famously dubbed, 'put up or shut up' deadline for us.

Speaker #3: And as Bijan mentioned, our hope, as we stated in the 2.4 announcement, is that we could get into some constructive discussions with the Grinnell board on this offer.

Speaker #3: That concludes my part of the presentation, and I will now hand over to Birgitte to tell us more about the record revenues. Thank you, Birgitte.

Chris Spencer: That concludes my part of the presentation. I just hand over to Birgitte to tell us more about the record revenues. Thank you, Birgitte.

Speaker #1: Thank you very much, Chris. And thank you, Bijan. Good morning, everyone. As you said, Chris, at the start of this call, we present another very strong quarter for DNO.

Birgitte Wendelbo Johansen: Thank you very much, Chris, and thank you, Bijan. Good morning, everyone. As you said, Chris, at the start of this call, we present another very strong quarter for DNO. Revenue in the Q2 was at $761 million, up 21% from the last quarter. The increase from Q1 is driven by higher realized oil and gas prices, partly offset by lower sales volumes in the North Sea, explained by an uplift as well as seasonal maintenance. At Frøy and Ekofisk, we started very late in the quarter. We recorded no sales or revenue here. Comparing with the Q2 2025, we must of course take into consideration that Sval was included in our figures as of June, which explains most of the large movements, almost 200% revenue increase. Year to date, revenue was almost $1.4 billion, tripling the revenue from the H1 2025.

Speaker #1: Revenue in the second quarter was $761 million, up 21% from the last quarter. The increase from Q1 is driven by higher realized oil and gas prices, partly offset by lower sales volumes in the North Sea, explained by underlift as well as seasonal maintenance.

Speaker #1: As production in Kyrgyzstan restarted very late in the quarter, we recorded no sales or revenue here. Comparing with the second quarter of 2025, we must of course take into consideration that fall was included in our figures as of June.

Speaker #1: This explains most of the large movements, including the almost 200% revenue increase. Year to date, revenue was almost $1.4 billion, tripling the revenue from the first half of 2025.

Speaker #1: Operational profits ended at $439 million, also a substantial increase of 55% compared to $284 million in the first quarter. Our tax expense in the quarter was $340 million, increased mainly due to higher taxable income, which is a good thing.

Birgitte Wendelbo Johansen: Operational profit ended at $439 million, also a substantial increase of 55% compared to $284 million in Q1. Our tax expense in the quarter was $340 million, an increase mainly due to higher taxable income, which is a good thing. Net profit in the quarter was $83 million, representing a 65% increase compared to Q1. Year to date, the net profit is $134.1 million, up from negative $10.9 million in H1 2025. Next slide, please. Let's move to the cash flow. Our cash position moved from $531 million at the end of Q1 to $550 million at the end of 26 June. The operational cash flow was $639 million, supported by reverse earnings and working capital movements. We had three tax installments in Norway in Q2, totaling $98 million.

Speaker #1: Net profit in the quarter was $83 million, representing a 65% increase compared to the first quarter, and year to date the net profit is $134.1 million, up from negative $10.9 million in the first half of 2025.

Speaker #1: Next slide, please. So let's move to the cash flow. Our cash position moved from $531 million at the end of the first quarter to $550 million at the end of June 26.

Speaker #1: The operational cash flow was $639 million, supported by robust earnings and working capital movements. We had three tax installments in Norway in Q2 totaling $98 million, and as these installments were the final ones related to the 2025 results, the cash tax in the coming quarters will be higher.

Birgitte Wendelbo Johansen: As these installments were the final ones related to the 2025 results, the cash tax in the coming quarters will be higher. We expect the total tax installments on the NCS in H2 of around $320 million. This will also, of course, depend on the exchange rate at the time of the payments. The strong free cash flow in Q2 should be seen in context, of course, then of the higher tax payments starting from Q3. Net investing activities was $238 million, with the main effects coming from $202 million in asset investments and $26 million in decommissioning. We had a material reduction in drawn amounts and off-take financing, as Chris mentioned, of $221 million. Other financing of $73 million covered dividends and interest on our debt.

Speaker #1: We expect total tax installments on the NCS in the second half to be around $320 million, though this will also, of course, depend on the exchange rate at the time of the payments.

Speaker #1: The strong free cash flow in the second quarter should be seen in context, of course, with the higher tax payments starting from Q3.

Speaker #1: Net investing activities were $228 million, with the main effects coming from $202 million in asset investments and $26 million in decommissioning. We had a material reduction in drawn amounts under our offtake financing, as Chris mentioned, of $221 million, and other financing of $73 million covered dividend and interest on our debts.

Speaker #1: So, we had cash at quarter end of $550 million, as mentioned, and as you can see, this is a similar level as the last quarter, reflecting that we have mostly used a strong free cash flow this quarter to repay debt and not build a cash position.

Birgitte Wendelbo Johansen: We had cash at quarter end of $550 million, as mentioned. As you can see, this is a similar level as the last quarter, reflecting that we have mostly used a strong free cash flow this quarter to repay debt and not build a cash position. Next slide, please. Our total balance sheet as per quarter end is around $6.2 billion, of which PP&E represents around 50%, $3.2 billion at the end of the quarter, a slight increase from last quarter. Our net debt ended at $553 million, down $238 million or 30% from the last quarter, mostly driven by the previously mentioned reduction of the off-take financing during the quarter. Our equity share as of quarter end, 21.8%, and with a total equity of $1.36 billion, we are well within also within the bond covenants.

Speaker #1: Next slide, please. Our total balance sheet as per quarter end is around $6.2 billion, of which PP&E represents around 50%, or $3.2 billion at the end of the quarter—a slight increase from last quarter.

Speaker #1: Our net debts ended at $553 million, down $238 million or 30% from the last quarter, mostly driven by the previously mentioned reduction of the offtake financing during the quarter.

Speaker #1: Our equity share as of quarter end is 21.8%, and with a total equity of $1.36 billion, we are well within the bond covenants.

Speaker #1: On the back of this strong balance sheet and cash generation, the Board has decided to distribute 0.375 NOK per share, as Chris mentioned. Following this payment, DNO will have paid dividends to our shareholders for 17 consecutive quarters, totaling $491 million, in addition to $62 million in share buybacks.

Birgitte Wendelbo Johansen: On the back of this strong balance sheet and cash generation, the board has decided to distribute NOK 0.375 per share, as Chris mentioned. Following this payment, DNO will have paid dividends to our shareholders for 17 consecutive quarters, totaling $491 million, in addition to $62 million in share buyback. All in all, a very strong quarter for DNO. By that, I think we'll move over to the Q&A session.

Speaker #1: All in all, a very strong quarter for DNO, and with that, I think we'll move over to the Q&A session.

Speaker #2: Thank you, Birgitte, Bijan, and Chris, for an excellent presentation. Before we move on to the Q&A, I guess it's timely to remind you all that we will not take any questions about Guinelle and the possible offer due to the UK Takeover Code limitations.

Jostein Løvås: Thank you, Birgitte and Bijan and Chris, for an excellent presentation. Before we move on to the Q&A, I guess it's timely to remind you all that we will not take any questions about Genel and the possible offer due to The City Code on Takeovers and Mergers limitations. With that, I think we can take the first question. Theodor Sveen-Nilsen, analyst, you may unmute yourself. Please go ahead.

Speaker #2: And so, with that, I think we can take the first question. Teodor Sven Nielsen, analyst, you may unmute yourself. Please go ahead.

Speaker #3: Good morning. Thanks for the update, and thanks for taking my questions. A few questions—first, on the Tawke production and the current production in Kurdistan.

Teodor Sveen-Nilsen: Good morning. Thanks for that. Thanks for taking my questions. A few questions. First on the Tawke production and the current production in Kurdistan. You mentioned that you have restarted very slightly, but on and off. Could you comment on at what level has the quarter to date production been in Kurdistan? That's the first question. Second question is also on Kurdistan. That is on local prices. I know you get pricing authorities, which also I think that you highlighted in your presentation. That's the same as previous periods. Why hasn't the local price increased when global oil prices has increased substantially lately? Then a third question that is on NCS and 2027 production outlook. You definitely have several fields coming on stream into next year. I also assume some of decline on the current production.

Speaker #3: You mentioned that we have restarted, but it's a little bit on and off. Could you comment on what level the quarter-to-date production has been in Kyrgyzstan?

Speaker #3: So that's the first question. Second question is also on Kyrgyzstan—this one is on local prices. I know you get, like, pricing authorities, which I think you also highlighted in your presentation. That's the same as previous periods.

Speaker #3: Why hasn't the local pricing increased when global oil prices have increased substantially lately? And then the third question is on NCS and the 2027 production outlook.

Speaker #3: You definitely have several fields coming on stream into next year also streams on underlying decline on the current production but should we should we expect like double digit percentage production growth on NCS next year or is that too too aggressive to assume that kind of growth?

Teodor Sveen-Nilsen: Should we expect double-digit percentage production growth on NCS next year, or is that too aggressive to assume that kind of growth? Thanks.

Speaker #3: Thanks.

Speaker #2: Let me start with the Kyrgyzstan question, and I'll turn to Chris and ask you to respond to the NCS question. With respect to our production levels, that's a hard one to respond to because, as I mentioned, as Chris mentioned, we look at the safety and situation in Kyrgyzstan, in Iraq, in the region, and importantly, in our areas of operation.

Bijan Mossavar-Rahmani: Let me start with the Kurdistan question. I'll turn to Chris and ask him to respond to the NCS question. With respect to our production level, that's a hard one to respond because as I mentioned, as Chris mentioned, we look at the safety and security situation in Kurdistan, in Iraq, in the region, and importantly in our areas of operation on a very regular basis, almost a daily basis. It's possible that we will have to shut down production very quickly, and Chris referred to that as well. Because of the uncertainties and the shut-in, we prefer not to give a figure because today's production may not be tomorrow's production. I think it would give a false projection and raise expectations or lower expectations if we report our production on a weekly basis, a daily basis, on an ongoing basis.

Speaker #2: On a very regular basis, on a daily basis, and it's possible that we will have to shut down production very quickly, and Chris referred to that as well.

Speaker #2: And because of the uncertainties and the shut-in, we prefer not to give a figure, because today's production may not be tomorrow's production. And I think it would give a false impression.

Speaker #2: False projection and raised expectations—or lowered expectations—if we report our production on a weekly basis, a daily basis, on an ongoing basis. It's not really helpful to our investors; it's not helpful in other respects either.

Bijan Mossavar-Rahmani: It's not really helpful to our investors. It's not helpful in other respects either. We will obviously, in our next quarterly presentation, present the numbers for this quarter. I hope they will be strong numbers, but I can't give numbers that represent one day's production high or low or not at all, because again, this would not really give a good guidance to the market as to what to expect in terms of Kurdistan production. We're producing currently. We've said that our expectation is that we will reach, if all goes well, or reach and sustain on an ongoing basis our pre-shutdown production levels. What we have said about drilling and workovers would help offset normal decline in some of the wells. Hopefully, give incrementally higher numbers, but we just can't say.

Speaker #2: So we will obviously in our next quarterly presentation present the numbers for this quarter. I hope they will be strong numbers. But I can't give a give numbers that represent one day's production high or low or not at all because again it's this would not really give a good guidance to the market as what to expect in terms of Kyrgyzstan production.

Speaker #2: We're producing currently. We've said that our expectation is that we will reach, if all goes well, and sustain on an ongoing basis, our pre-shutdown production levels.

Speaker #2: And the what we've said about drilling and workovers would be would help offset normal decline in some of the in some of the wells and hopefully give incrementally higher numbers but we just can't say this is a very unique situation and we have one foot on the on the accelerator in terms of operations in terms of drilling and one foot always on the brake.

Bijan Mossavar-Rahmani: This is a very unique situation, and we have one foot on the accelerator in terms of operations, in terms of drilling, and one foot always on the brake. I think the best numbers we can give you would be the numbers we present next quarter, which should be backward-looking rather than forward-looking. Having said that, you asked about pricing. Obviously, pricing in local markets sometimes are related to external markets, sometimes they're not. In this instance, there is a disconnect between prices for fuels and diesel, gasoline, other products in larger Iraq and global markets. Oil-producing countries typically sell products into the local market at well below international prices. This is true of Iraq and also true of Kurdistan. So there is this disconnect. If the oil is moved into international markets, that changes.

Speaker #2: So I think the best numbers we can give you will be the numbers we present next quarter, which would be backward-looking rather than forward-looking.

Speaker #2: Having said that, you asked about pricing. Obviously, pricing in local markets is sometimes related to external markets, and sometimes it’s not. In this instance, there is a disconnect between prices for fuels—diesel, gasoline, and other products—in larger Iraq and global markets. Producing countries typically have to sell products into the local market at well below international prices.

Speaker #2: This is true of Iraq and also true of Kyrgyzstan. So, there is this disconnect—if the oil is moved into international markets that changes, but at the current time, our sales reflect again other conditions, other considerations, than those in terms of our North Sea.

Bijan Mossavar-Rahmani: But at the current time, our sales reflect, again, other conditions, other considerations than those in terms of our North Sea pricing for our oil in particular, that tracks the global supply and demand in global markets very closely. We have said that the price that we are currently selling to local traders, and where that oil moves, we don't know, but our sales price is in the mid to high $30 a barrel range. Before the shutdown, we were at a very low $30 range, so that's already about a 20% increase over our pre-shutdown levels, which is great. But our pricing, the net pricing to us, does not reflect international prices. That's unfortunate.

Speaker #2: Pricing for our oil in particular tracks global supply and demand, and global markets very closely. We have said that the price at which we are currently selling to local traders—and where that oil moves, we don't know.

Speaker #2: But our sales prices in the mid to high $30-a-barrel range before the shutdown were very, very low $30 range, so that's already about a 20% increase over our pre-shutdown levels, which is great.

Speaker #2: But our pricing is not net pricing to us, and does not reflect international prices. That's unfortunate. And, anyway, we were shut down, production-wise, during the periods—the weeks in which oil international prices were extremely high because of the war in the Persian Gulf and in Iran, which has now spread to other parts of the Middle East as well, as you know.

Bijan Mossavar-Rahmani: Anyway, we were shut down production-wise at the periods, the weeks in which oil, international prices were extremely high because of the war in the Persian Gulf and in Iran, which has now spread to other parts of the Middle East as well as you know, in terms of strikes. We missed that opportunity in Kurdistan to capture those prices, but we did not miss that opportunity in the North Sea. Again, you've seen our financial performance. That's been terrific. While we were not able to capture it in Kurdistan, we did in the North Sea, where the North Sea operations were hitting on all 12 cylinders. We're very pleased with that, and so the North Sea carried the quarter for us.

Speaker #2: There was a strike—we missed that opportunity in Kyrgyzstan, the capitalist prices—but we did not miss that opportunity in the North Sea. And again, you've seen our performance, our financial performance, that's been terrific.

Speaker #2: So, while we were not able to capture it in Kyrgyzstan, we did in the North Sea, where the North Sea operations were hitting on all 12 cylinders. We're very pleased with that.

Speaker #2: And so the North Sea carried the quarter for us. And when we first started going to the North Sea, it was Kurdistan that was carrying the quarters, multiple quarters for us, and allowed us to move into the North Sea. Revenues of Kurdistan operations allowed us to go to the North Sea.

Bijan Mossavar-Rahmani: When we first started going to the North Sea, it was Kurdistan that was carrying multiple quarters for us and allowed us to move into Kurdistan revenues. Kurdistan operations allowed us to go to the North Sea. Now the shoe's on the foot of the other sister, and the North Sea's carrying Kurdistan. Hopefully, in Q3 and Q4, both will have their dancing shoes on, but we just don't know, and we can't offer you that guidance. I wish the situation were different, but it is what it is, and we try to make the best of it. Again, the safety of our people on the ground in Kurdistan, uppermost on our mind. That's not to say we're not concerned about safety and security in the North Sea or the Ivory Coast or any other part of the company.

Speaker #2: And now the shoe's on the foot of the other sister, and the North Sea is carrying Kyrgyzstan, and hopefully in the third quarter and the fourth quarter, both will have their dancing shoes on. But we just don't know, and we can't offer you that guidance.

Speaker #2: I wish the situation were different, but it is what it is, and we try to make the best of it. But again, with the safety of our people on the ground in Kyrgyzstan.

Speaker #2: Uppermost on our mind—that's not to say we're not concerned about safety and security in the North Sea, or the Ivory Coast, or any other part of the company.

Speaker #2: Safety and security, and well-being and welfare of our team, is top of most in our list of concerns and considerations, and therefore our corporate policies.

Bijan Mossavar-Rahmani: Safety and security and wellbeing and welfare of our team is uppermost in our list of concerns and considerations and therefore our corporate policies. Chris?

Speaker #2: Chris.

Speaker #1: Thank you, Bijan, and I'll turn to Ted, whose third question is about North Sea production. And yes, you're right, Ted, we are growing in the North Sea.

Chris Spencer: Thank you, Bijan. I'll turn to Theodor's big question about North Sea production. Yes, you're right, Theodor, we are growing in the North Sea. It's a very exciting part of our business. It takes a huge amount of energy from the team, primarily in Stavanger. A few over here in our corporate headquarters as well, so we like to get involved too. The growth trajectory that we're pushing for, we first set out in the pack we published at the time that we bought Sval. At that point in time, I think we set out our ambition for 100,000 barrels of oil equivalent a day DNO share by 2030. We put a graph in the slide pack showing the sort of trajectory towards 2030.

Speaker #1: It's a very exciting part of our business. It takes a huge amount of energy from the team, primarily in Stavanger, with a few over here in our corporate headquarters as well.

Speaker #1: So, we like to get involved too. The growth trajectory that we're pushing for, we first set out in the PAC we published at the time that we bought Sval, and at that point in time, I think we set out our ambition for 100,000 barrels of oil equivalent a day, DNO share, by 2030.

Speaker #1: And we put a graph in the slide pack showing the sort of trajectory towards 2030. We updated that in the February presentation, I believe, and I can't remember, unfortunately, Ted, off the top of my head what the number was for next year, but if you refer to that, that will give you a sense of where we're going.

Chris Spencer: We updated that in the February presentation, I believe. I can't remember, unfortunately, Theodor, off the top of my head what the number was for next year. If you refer to that will give you a sense of where we're going. We're not putting out official guidance for 2027 yet. So that's the best I can do to help you with that. We're standing by our ambition for 100,000 barrels of oil equivalent per day by 2030. I personally am confident that we will achieve that target.

Speaker #1: We're not putting out official guidance for 2027 yet, so that's the best I can do to help you with that. But we're standing by our ambition for 100,000 barrels of oil equivalent per day.

Speaker #1: By 2030, and I personally am confident that we will achieve that target.

Speaker #2: Thank you. That's fair. And then, just to clarify on that, Bijan, you said that you expect production to come back to pre-shutdown levels when the war ends.

Teodor Sveen-Nilsen: Thank you. That's clear. Just to clarify on Tawke, Bijan, you said that you expect production to come back to pre-shutdown levels whenever the war ends. We are still talking about 100,000 barrels gross from Tawke expectation, right?

Speaker #2: So then we’re still talking about 100,000 barrels gross from TAQ expectation, right?

Speaker #1: You're right. I want to give again any projections or any guidance we’ve said. I think at the start of the year, that would be an eight-well drilling program that we had planned, and we thought we could reach 100,000 barrels a day by the end of this year.

Bijan Mossavar-Rahmani: Theodor, I don't want to give, again, any projections or any guides. We had said, I think at the start of the year, that with the eight-well drilling program that we had planned, that we thought we could reach 100,000 barrels a day by the end of this year. Circumstances changed. We shut in production. When you shut in production, almost some of the wells will be affected. You have to go in and do workovers and get pumps that perhaps, because we were shutting, burned out, and replace those and make other repairs. That's been something that we've initiated. It's an ongoing process. The wells we thought we would be drilling at the first part of this past quarter, we didn't drill. We couldn't drill. We started drilling in the latter part of the quarter as conditions seemed to have improved security-wise for some period of time.

Speaker #1: Circumstances changed. We shut in production, and when you shut in production, performance—some of the wells will be affected. We have to go in and do workovers and get pumps, perhaps because we were shut in, burned out, and replace those and make other repairs.

Speaker #1: And that's been something that we've initiated, and it's an ongoing process. The wells we thought we would be drilling at the first part of this past quarter, we didn't drill.

Speaker #1: We couldn't drill. We started drilling in the latter part of the quarter, as conditions seemed improved security-wise for some period of time. So we are behind the schedule that we had anticipated early in the year, and behind in terms of the ability to reach targets that have been set back.

Bijan Mossavar-Rahmani: We are behind the schedule that we had anticipated early in the year, and behind in terms of the ability to reach targets that have been set back. Again, if security conditions deteriorate, we will stop drilling the new wells again. I hope that won't happen, but we're mindful of that. Theodor, I think you should assume based on what's been happening on the ground in other regions, that our goals will not be met, that some of these will be suspended. But by how much and for how long, I just don't know. I wish I did. If we had a crystal ball and knew what was going to happen security-wise, we would stop operations or expand operations. But we don't have that crystal ball, and we just have to watch this day by day.

Speaker #1: And again, if the security conditions deteriorate, we will stop drilling—stop drilling the new wells—again. I hope that won't happen, but we're mindful of that.

Speaker #1: So I think you can—you should assume, based on what's been happening on the ground in other regions, that our goals will not be met, that these will be suspended—by how much and for how long.

Speaker #1: I just don't know. I wish I did. If we had the crystal ball and knew what was going to happen security-wise, we would stop operations or expand operations. But we don't have that crystal ball.

Speaker #1: And we just have to watch this day by day. But as we've said repeatedly, with onshore wells and offshore fields it's easy to hit the brakes and easy to hit the accelerator. But when you hit the brakes in a fast-moving car and then you restart again, you lose some time.

Bijan Mossavar-Rahmani: But as we've said repeatedly with onshore wells and offshore fields, it's easy to hit the brakes and easy to hit the accelerator. But when you hit the brakes in a fast-moving car, and then you start again, you lose some time in terms of your performance. I should also note that I've talked about our North Sea and then Kurdistan as sisters. Again, this is a relic of the period in which DNO was formed in the '60s, '70s. The big oil companies were called the Seven Sisters. Why as sisters, I don't know. But the sisters or Seven Sisters are now, I think maybe four. The super majors, and we were always the small sister, but the feminine term is used when it comes to the oil industry, maybe to show the softer side of the business.

Speaker #1: And in terms of performance, I should also note that I talked about our North Sea and the Kyrgyzstan as sisters. Again, this is a relic of the period in which DNO was formed, in the '60s and '70s. The big oil companies were called the Seven Sisters. Why sisters? I don't know, but sisters—of Seven Sisters—are now, I think, maybe four, which are the super majors, and we were always a small sister. But the feminine term is used when it comes to the oil industry.

Speaker #1: Maybe to show the softer side of companies. We have a soft side in operations, but we work in a very difficult, masculine, geopolitical environment. That's okay too.

Bijan Mossavar-Rahmani: We have a soft side for our operations, but we work in a very difficult masculine geopolitical environment. That's okay, too.

Speaker #2: Okay, thank you. I'll hand it over.

Speaker #1: Thank you, Ted. Next question comes from analyst Nicholas Stefanou. Remember to unmute yourself before talking.

Teodor Sveen-Nilsen: Okay. Thank you. I'll hand it over.

Jostein Løvås: Thank you, Theodor. Next question comes from analyst Nikolas Stephanou. Remember to unmute yourself before talking.

Speaker #3: Hi, guys. Can you hear me? All right. Congratulations on a very strong quarter. It's really good to see these numbers coming through. I want to ask you a couple of questions on the North Sea, and then one on Kyrgyzstan.

Nikolas Stephanou: Hi, guys. Can you hear me?

Nikolas Stefanou: Hi, guys. Can you hear me?

Jostein Løvås: Yes.

Nikolas Stephanou: All right. Congratulations on a very strong quarter. It is really good to see these numbers coming through. I want to ask you a couple of questions on the North Sea, and then one on Kurdistan. I understand the reluctance in giving an outlook for 2027, but you have increased this year's production in the North Sea. Would you be able to give me an exit rate for this year? The other question, could you please remind me the number of FIDs planned for this year, and what else is left in the North Sea?

Nikolas Stefanou: All right. Congratulations on a very strong quarter. It is really good to see these numbers coming through. I want to ask you a couple of questions on the North Sea, and then one on Kurdistan. I understand the reluctance in giving an outlook for 2027, but you have increased this year's production in the North Sea. Would you be able to give me an exit rate for this year? The other question, could you please remind me the number of FIDs planned for this year, and what else is left in the North Sea?

Speaker #3: I understand the reluctance in giving an outlook for 2027, but you have increased this year's production in the North Sea. So, would you be able to give me an exit rate for this year? And then, the other question: could you please remind me of the number of FIDs planned for this year and what else is left in the North Sea?

Speaker #1: Certainly, I can just set on the production side. You asked for an exit rate for the year. I don't have that number in front of me, but obviously we have this morning reported the actual production for the first two quarters, and we have upped our guidance for the year to 85,000 barrels of oil equivalent a day.

Chris Spencer: Nick, on the production side, you asked for an exit rate for the year. I do not have that number in front of me, but obviously we have this morning reported the actual production for the first two quarters. We have upped our guidance for the year to 85,000 barrels of oil equivalent a day. I think that you should be able to quite easily calculate what to expect in the H2, if that helps answer that question. Unless any of my analysts here are coming up with a number for you. In the meantime, what was the second question? Sorry.

Speaker #1: So, I think that you should be able to quite easily calculate what to expect in the second half, if that helps answer that question.

Speaker #1: Unless any of my analysts here are coming up with a number for you. In the meantime, what was the second question? Sorry.

Speaker #3: Yeah, it was a number of projects sanctioned and to be sanctioned in 2026, and where are we at there? Just an update basically.

Nikolas Stephanou: Yeah. It was the number of projects sanctioned and to be sanctioned in 2026, and where are we at there? Just an update, basically.

Nikolas Stefanou: Yeah. It was the number of projects sanctioned and to be sanctioned in 2026, and where are we at there? Just an update, basically.

Speaker #1: Yeah, and so we updated this quarter that we sanctioned three more of the subsea tiebacks in Q2: Theresa, Ophelia, and Nia Noor. And we're still projecting that, for this year, the Takaka project will be sanctioned later in the year, which I think is consistent with the presentation we made three months ago, where we did a bit of a deep dive into that satellite portfolio.

Chris Spencer: Yeah. We updated this quarter that we sanctioned three more of the Subsea Tiebacks in Q2, Cerisa, Ofelia, and Yornor. We are still projecting that the Shakka project will be sanctioned later in the year, which I think is consistent with the presentation we made three months ago, where we did a bit of a deep dive into that satellite portfolio. If anyone is interested to get a bit more information on our near and medium-term satellite tieback project portfolio. If you click on the slides from last quarter, you will get a bit better overview, and I think then the dates there are still valid.

Speaker #1: So if anyone's interested to get a bit more information on our Nia and medium-term satellite Tyvek project portfolio, if you click on the slides from last quarter, you'll get a bit better overview, and I think the dates there are still valid.

Speaker #3: Okay, okay. So it's just one more FID planned for 2026, then.

Nikolas Stephanou: Okay. So it is just one more FID planned for 2026 then?

Nikolas Stefanou: Okay. So it is just one more FID planned for 2026 then?

Speaker #1: For 26 yes.

Speaker #3: Okay, thanks so much. The other question, I guess, is for Birgit, and it's kind of a strategic one. I guess in the past few years, the DNO narrative, especially after the Zavala cruise issue, was to bring investor attention towards the North Sea.

Chris Spencer: For 2026? Yes.

Nikolas Stephanou: Okay, thanks so much. The other question, I guess it is for Bijan, and it is kind of a bit of a strategic one. I guess in the past few years, the DNO narrative, especially after the Sval acquisition, was to bring investor attention towards the North Sea. It is a magnificent business. You are doing very well there. Given the recent developments, where does Kurdistan sit in your strategy at the moment? Because if this deal happens, you are going to perhaps have a very large presence there, even a larger than it is now. So I just want to get a sense of where Kurdistan fits with the rest of the portfolio now that the North Sea has grown so much.

Nikolas Stefanou: Okay, thanks so much. The other question, I guess it is for Bijan, and it is kind of a bit of a strategic one. I guess in the past few years, the DNO narrative, especially after the Sval acquisition, was to bring investor attention towards the North Sea. It is a magnificent business. You are doing very well there. Given the recent developments, where does Kurdistan sit in your strategy at the moment? Because if this deal happens, you are going to perhaps have a very large presence there, even a larger than it is now. So I just want to get a sense of where Kurdistan fits with the rest of the portfolio now that the North Sea has grown so much.

Speaker #3: And it is a magnificent business—you’re doing very well there. Given the recent developments, where does Kyrgyzstan sit in your strategy at the moment? Because if we still kind of, like, have this—we're going to...

Speaker #3: Have a very large sort of presence there, as like even larger tunnel, because now—so I just want to kind of get a sense of where Kyrgyzstan fits with the rest of the portfolio now that the North Sea has grown so much.

Speaker #1: Kyrgyzstan is very important to DNO; it has been historically. You might recall that this past December, we had a very substantial and significant milestone: we announced that we had produced 500 million barrels from the Talki license.

Bijan Mossavar-Rahmani: Kurdistan is very important to DNO. It has been historically. You might recall that this past December, we hit a very substantial, significant milestone. We announced that we had produced 500 million barrels for the Tawke license, between the Tawke field and the Peshkabir field. This is a very important milestone. It is by far the largest production from fields in Kurdistan, fields that are operated by international oil companies in this recent period of 25 years or so. So it has been very important to the company. But obviously, given all the challenges in Kurdistan, these challenges are not just Kurdistan. We have seen these challenges now throughout the Middle East in much larger producing countries as a consequence of the war. It is always imprudent to be a single asset company.

Speaker #1: I mean the Talki field and the Eskimo field. This is a very important milestone. It's by far the largest production from fields in Kyrgyzstan.

Speaker #1: Fields that are operated by international oil companies in the recent period of 25 years or so, so it's been very important to the company.

Speaker #1: But obviously, given all the challenges in Kyrgyzstan, these challenges aren't just limited to Kyrgyzstan. We've seen these challenges now throughout the Middle East and in much, much larger producing countries as a consequence of the war.

Speaker #1: It is always important to be a single asset company. Single asset companies are, again, very, very exposed to movements in oil and gas prices, movements in production, and then the external conditions of geopolitical security and otherwise.

Bijan Mossavar-Rahmani: Single asset companies are, again, very exposed to movements in oil and gas prices, movements in production, and then the external conditions of geopolitical, political security, and otherwise. It was a very smart move. It was a deliberate move. We started moving into the North Sea, starting roughly 5 or so years ago. Then we were able to accelerate and move up in a major way with the acquisition of the Sval assets. Before the shutdown, our two legs were each producing about equal volumes, about 8,000 barrels a day in an operational sense. Of course, the net figure and the entitlement figure is a little bit different. We felt that the two major parts of the company were both doing well and contributing importantly in a diversified way to our performance and to our growth. Kurdistan remains a very important part of our business.

Speaker #1: So it was a very smart move, it was a deliberate move. We started moving into the North Sea starting roughly five or so years ago, and then we were able to accelerate and move up in a major way with the acquisition of the small assets. And before the shutdown, our two legs were each producing about equal volumes, about 8,000 barrels a day, and in an operational sense, of course, the net figures and the entire figures are a bit different.

Speaker #1: But we felt that the two major parts of the company were both doing well and contributing importantly in a diversified way to our performance and to our growth.

Speaker #1: Kyrgyzstan remains a very important part of our business. And we again our investing now we are the we have our own rig. We have a DNO owned rig that is drilling shallow wells but also dealing with our workovers of our existing wells.

Bijan Mossavar-Rahmani: We, again, are investing now. We have our own rig. We have a DNO-owned rig that is drilling shallow wells, but also dealing with our workovers of our existing wells. We have another larger rig drilling additional wells on Peshkabir. We have engaged a second large rig. These are rigs that can drill to the depths of our producing reservoirs in our fields. We are now looking for a third large rig to come in. We are actively drilling. I think we are the only international oil company in Kurdistan that is drilling. We are the only international oil company in Kurdistan that is producing. The others have all shut in because of security and the concerns of their own regions. We are the only one drilling. Drilling a lot. The only one producing. We are committed to Kurdistan, committed in terms of spend, in terms of activity.

Speaker #1: We have another, larger rig drilling additional wells on Eshkebir. We have engaged a second large rig. These are rigs that can drill to the depths of our producing reservoirs.

Speaker #1: In our fields, and we're now looking for a third large rig to come in. So we're actively drilling. I think we're the only international oil company in Kyrgyzstan that's drilling.

Speaker #1: We are the only international oil company in Kyrgyzstan that's producing. The others have all shut in because of security concerns or their own reasons.

Speaker #1: But we're the only one drilling. Drilling a lot. The only one producing. And we're committed to Kyrgyzstan. We're committed in terms of spend, in terms of activity.

Speaker #1: And we're able to do it because we are a large company. We do have our North Sea business that can support our presence in Kyrgyzstan.

Bijan Mossavar-Rahmani: We are able to do it because we are a large company. We do have our North Sea business that can support our presence in Kurdistan. We have been the first international oil company in Kurdistan. We have a strong presence in Kurdistan. We have great working relationships with the Kurdistan Regional Government, and we are proud of our history of our relationship with them, and that allows us to have the confidence and the support to keep going. This is not the first time. When ISIS came into northern Iraq, and they came very close to our operation, all the other companies shut down and left. In fact, the UK government instructed British citizens to leave, as did the US government. DNO stayed, and we produced. During that period, we were not paid very much.

Speaker #1: We've been the first international oil company in Kyrgyzstan. We have a strong presence in Kyrgyzstan. We have great working relationships with the Kyrgyzstan regional government, and we're proud of our history and our relationship with them.

Speaker #1: And that allows us to have the confidence and the support to keep going. And this is not the first time—when ISIS came into northern Iraq, they came in very, very close to our operation.

Speaker #1: All the other companies shut down and left. In fact, the UK government instructed British citizens to leave, as did the US government. But DNO stayed, and we produced.

Speaker #1: And during that period, we weren't paid very much. But it was important for us to be a good corporate citizen and to be there for Kyrgyzstan.

Bijan Mossavar-Rahmani: It was important for us to be a good corporate citizen and to be there for Kurdistan at a very difficult moment when millions of refugees had come into the country. Kurdistan's financial support from Baghdad was cut. We felt we needed to be supportive and be with in Kurdistan at bad times as well as in good times. That mindset continues. Both then and now, we remain committed to operation in Kurdistan. That shows that we are able to do it because of our size and our diversity and our history there and our relationships with the people of Kurdistan, the government of Kurdistan, and the Ministry of Natural Resources there. We feel that they have our back, we have their back, and we are going to keep going. Hopefully, the situation in the Middle East will resolve itself.

Speaker #1: And a very, very difficult moment, when millions of refugees had come into the country. Kurdistan's financial support from Baghdad was cut, and we felt we needed to be supported.

Speaker #1: And be with, in Kyrgyzstan at bad times as well as in good times. And so that mindset continues, and both then and now, we remain committed to operation in Kyrgyzstan.

Speaker #1: And that shows that we're able to do it because of our size, and now our diversity, and our history there, and our relationships with the people of Kyrgyzstan and the government of Kyrgyzstan.

Speaker #1: And the Ministry of Natural Resources there. So we feel that they have our back. We have their back. And we're going to keep going, and hopefully the situation in the Middle East will resolve itself.

Speaker #1: It can't go on like this. And once it does, and we hit the accelerator, we're going to go faster than any other company, and hopefully that will make up for the period in which our production and our operations have been, at some points, disturbed.

Bijan Mossavar-Rahmani: It can't go on like this. Once it does, we hit the accelerator, we're going to go faster than any other company. Hopefully, it'll make up for the period in which our production and our operations have been disturbed. We have the confidence, and we're putting our money where our confidence is in this respect and our operations, our activities. We support our people. We go in very regularly to be with them, to understand the security issues, the safety issues, other considerations, at multiple levels. I go to Kurdistan, Chris goes to Kurdistan, the rest of our team, we're always happy to do it, always excited to go there. We're mindful of the security conditions, and we plan our travel accordingly. We're very committed to Kurdistan.

Speaker #1: And so we have that confidence, and we're showing it by putting our money where our confidence is—in our operations and our activities. And we support our people.

Speaker #1: We go in very regularly to be with them, to understand the security issues, the safety issues, and other considerations at multiple levels. I go to Kyrgyzstan.

Speaker #1: Chris goes to Kyrgyzstan. The rest of our team, we're always happy to do. We're always excited to go there. But we're mindful of the security conditions, and we plan our travel accordingly.

Speaker #1: So we're very committed to Kyrgyzstan.

Speaker #2: Thank you.

Speaker #3: You have one point, Bijan, you covered very well, but on the financial side, I think that Kyrgyzstan sits better in our business these days.

Jostein Løvås: Thank you.

Nikolas Stefanou: Thank you.

Chris Spencer: Can I add one point? Bijan, you covered it very well, but on the financial side, I think that Kurdistan sits better in our business these days. We used to have to hold hundreds of millions of USD on the balance sheet to protect the company against downturns in Kurdistan. You've seen us successfully navigate that, especially if you're a bond investor, over 20 years. That comes at quite a significant cost, and in the years I've been with the company, many comments from equity investors pointing out the inefficiency of holding such large amounts of net cash. Now, with that engine room in the North Sea, you see the balance sheet, in my mind, is a much more healthy one for any company with a modest level of net debt.

Speaker #3: We used to have to hold hundreds of millions of dollars on the balance sheet to protect the company against downturns in Kurdistan. And you've seen us successfully navigate that, especially if you're a bond investor over 20 years.

Speaker #3: But that comes at quite a significant cost, and we have, in the years I've been with the company, had many comments from equity investors pointing out the inefficiency of holding such large amounts of net cash.

Speaker #3: Now, with that engine room in the North Sea, you see the balance sheet in my mind is a much more healthy one for any company with a modest level of net debt.

Speaker #2: Okay, thank you, Nicholas. And then the next question comes from analyst Tom Christiansen. I think I should say that if there is anyone else that wants to ask a question, you have to please use the 'raise your hand' function at the top of your screen.

Jostein Løvås: Okay. Thank you, Nikolas. The next question comes from analyst Tom Erik Kristiansen. I think I should say that if there are anyone else that wants to ask a question, please use the raise your hand function at the top of your screen. I think I didn't say that at the very beginning. If there aren't any others asking questions, then we'll wrap it up after Tom Erik's questions. Tom Erik, yeah, please go ahead.

Speaker #2: I think I didn't say that at the very beginning. But if there aren't any others asking questions, then we'll wrap it up after Tom Eric's questions.

Speaker #2: So, Tom, Eric—yeah, please go ahead.

Speaker #4: Thank you for giving me the opportunity to ask a question. Could you please talk a bit more about how you think about the export payment regime?

Tom Erik Kristiansen: Thank you for having the opportunity to ask a question. Could you please talk a bit more about how you think about the export payment regime? Do you see that now as more proven that you see some of the companies that have got paid through that mechanism? Or is it higher risk if you take a look at Iraq's total economy and the lack of southern exports? Is that a regime you would like to change to now when you think about access export pricing, what you mean with that? Or is it this is the right time maybe to stay with the local phase? How do you think about that and timing of how to manage this process?

Speaker #4: Do you see that now as more proven, since you've seen some of the companies that have been paid through those mechanisms? Or is it higher risk if you look at Iraq’s total economy and the lack of southern exports?

Speaker #4: Is that a regime you would like to change to now? When you think about access export pricing, what do you mean by that? Or is this the right time maybe to stay with the local sales?

Speaker #4: How do you think about that, and the timing of how to manage this process?

Speaker #1: We have no visibility on the payment scheme that the other companies have set up. We know how it works, but we understand that there is a preliminary payment.

Bijan Mossavar-Rahmani: We have no visibility on the payment scheme that the other companies have set up. We know how it works, but we understand that there is a preliminary payment. I think it is based on a $16 a barrel payment. What the actual figure is, we are not sure because there is a large formula that governs that. There was to be a top-up payment, a bulk of the payments to match international pricing was to come later. It was anticipated to come in a matter of months. I do not think that payment has come. I do know that Iraq's budget is squeezed, importantly, because during part of this crisis, they have not been exporting through the Persian Gulf.

Speaker #1: I think it's $16 based on a $16-a-barrel payment. What the actual figure is, we're not sure, because there's a lot of formula that governs that.

Speaker #1: And there was to be a top-up payment, so both of the payments to match international pricing were to come later, because they were anticipated to come in a matter of months.

Speaker #1: I don't think that payment has come. I do know that Iraq's budget is squeezed importantly because during part of this crisis they have not been exporting through the Persian Gulf.

Speaker #1: And it's not a secret that the Iraqi government has said that their ability to meet various budgetary needs and commitments has been reduced by the fact that their exports have been much lower than the budget and the plan.

Bijan Mossavar-Rahmani: It is not a secret that the Iraqi government has said that their ability to meet various budgetary needs and commitments has been reduced by the fact that their exports have been much lower than the budgeted and the plan. Where that is going to go, we do not know. We, DNO, together with our partner, Genel, on Tawke, decided that we preferred certainty of payments rather than promise of payments. We have been promised payments, certainly in Kurdistan in the past, that were not made, and we had to find other ways to compensate for that. We did so successfully in the ISIS period, where we were not paid. So we put into place a plan that eventually worked out quite well for us and also for Kurdistan. So this time, we thought that we do not want uncertainty of payments.

Speaker #1: So where that's going to go, we don't know. We, DNO together with our partner Genel on the Tawke, decided that we preferred certainty of payment rather than promise of payments.

Speaker #1: We've been promised payments, certainly in Kyrgyzstan in the past, that were not made, and we had to find other ways to compensate for that.

Speaker #1: And we successfully, in a period—the ISIS period—where we weren't paid, we put in place a plan that eventually worked out quite well for us and also for Kurdistan.

Speaker #1: So this time, we thought that we don't want the uncertainty of payments. We don't want to build up receivables, as all the companies have done.

Speaker #1: And that certainty of payment would allow us to budget how much to spend to grow the business. So we thought it was better to have one bird in the hand than two birds in the air.

Bijan Mossavar-Rahmani: We do not want the built-up receivables, as all the companies have done, and that certainty of payment would allow us to budget how much to spend to grow the business. So we thought it was better to have one bird in the hand than two birds in the air. That has allowed us to conduct our business, to keep producing, because we know we are getting paid when we produce we would not otherwise, and to invest. So that is why we are uniquely placed. The one company that did not participate in that scheme is the only one producing and the only one investing. So maybe we have done something right. We have been told we have done this right. Our payment scheme, we have described it as cash and carry.

Speaker #1: And that's allowed us to conduct our business, to keep producing, because we know we're getting paid when we produce—we wouldn't otherwise—and to invest.

Speaker #1: So that's why we're uniquely placed. One company that didn't participate in that scheme is the only one producing and the only one investing. So maybe we've done something right.

Speaker #1: We've been told we've done this right. And our payment scheme, we've described it as cash and carry. We don't really mean cash and carry, although during the ISIS period, bankers would show up with suitcases of cash, and we'd fill it like—boil the gas station.

Bijan Mossavar-Rahmani: We don't really mean cash and carry, although during the ISIS period, bankers would show up with suitcases of cash, and we'd fill, it's like going to the gas station, and we'd fill them up. Now, of course, it's not cash as such, but we do get payments in advance of deliveries. Typically, companies deliver the oil, and they're paid, depending on the location, approximately to market, they're paid 45 days later, 60 days later. We get it in advance, and we deliver the amount of oil that was prepaid for through the trading companies. That's worked out well for us. It's worked well for them. That leaves a margin for them. We don't know what that margin is, but just the fact that they're prepaying, there's a cost to them. We try to have a good relationship with them and work with them.

Speaker #1: And we'd fill them up. Now, of course, it's not cash as such. But we do get payments in advance of deliveries. If you let companies deliver the oil and they're paid depending on the location, approximately the market, they're paid 45 days later, 60 days later.

Speaker #1: We get it in advance, and we deliver the amount of oil that was prepaid for through the trading companies. And that's worked out well for us.

Speaker #1: It's worked well for them. That gives a margin for them. We don't know what that margin is, but it's just the fact that they're prepaying.

Speaker #1: There's a cost to them. We try to have a good relationship with them and work with them. We work to try to get that price as close to the actual market price as possible.

Bijan Mossavar-Rahmani: We work to try to get that price as close to the actual market price as possible. We would love to export, but there are, as you know, political and other constraints. Kurdistan is landlocked. It has to export through a neighbor. That neighborhood is a difficult neighborhood. The outlet of choice for the companies in Kurdistan, for others, has been through the pipelines that go through Turkey to the Mediterranean or to Ceyhan. We'd like to access that. We always work towards trying to get to that point. That's a work in progress. I can't give any visibility or projection or guidance on when that'll happen, but that clearly is our aspiration. We hope that will be possible.

Speaker #1: We would love to export, but there are, as you know, political and other constraints. Kyrgyzstan is landlocked; it has to export through a neighbor.

Speaker #1: That neighborhood is a difficult neighborhood. The outlet of choice for the companies in Kyrgyzstan, for others, has been through the pipelines that go through Turkey to the Mediterranean or to Tehran.

Speaker #1: We'd like to access that. We have always worked towards trying to get to that point, and that's a work in progress. I can't give any visibility, projection, or guidance on when that'll happen, but that clearly is our aspiration.

Speaker #1: And we hope that will be possible. I can't give you a date, but that is an aspiration, and I assure you we work on finding a way to do that on a very, very regular ongoing basis.

Bijan Mossavar-Rahmani: I can't give you a date, but that is an aspiration, and I assure you we work on that, on finding a way to do that in a very regular, ongoing basis and speak to the different stakeholders. But as I said, it's complicated and complex. If we get there, that will be a fantastic thing. Hope to get us there, but I can't give you a date. But in the meanwhile, we're doing, I think, quite well, thank you very much, because our payments are secure. We use part of those payments to reinvest. As long as we're producing and getting those payments, we recover our costs pretty quickly. But as Chris said, and as I've suggested, we have a backup now. In the past, the backup was several hundred million dollars target that we had to always have that cash on hand.

Speaker #1: And speak to the different stakeholders. But we understand it's complicated and complex. If we get there, then it'll be fantastic. Hope to get us there.

Speaker #1: But I can't give you a date. But in the meantime, we're doing, I think, quite well. Thank you very much. Because our payments are secure and we use part of those payments to reinvest.

Speaker #1: And as long as we're producing and getting those payments, we recover our cost pretty quickly. But as Chris said, and as I've suggested, we have a backup now.

Speaker #1: In the past, the backup was several hundred million dollars—target—that we had; always have that cash on hand. Now, we don't need that in the same way because we have the North Sea.

Bijan Mossavar-Rahmani: Now we don't need that in the same way because we have the North Sea. The North Sea has its own challenges, but payments isn't one of them. In the past, Chris mentioned the bond market. The bond market was really the only way we could raise funds to invest in DNO, given our portfolio at the time. We now have access to pre-financing because of our North Sea oil and gas. The cost of that pre-financing is probably half of our blended cost of bonds and our hybrids. So we now have access to financing that the very largest oil and gas companies have across the globe because they're part of our pre-financing arrangements, and we're effectively borrowing against their balance sheets as part of this arrangement that we have. We give them secure supply, committed supply, and they help us with the financing.

Speaker #1: The North Sea has its own challenges, but payments isn't one of them. And in the past, Chris mentioned the bond market. The bond market was really the only way we could raise funds to invest in DNO, given our portfolio at the time.

Speaker #1: We now have access to pre-financing in terms of our North Sea oil and gas. The cost of that pre-financing is probably half of our blended cost of bonds and our hybrids.

Speaker #1: So, we now have access to financing that the very largest oil and gas companies have across the globe, because they're part of our pre-financing arrangements.

Speaker #1: And we're effectively borrowing against their balance sheets as part of this arrangement that we have. We give them secure supply, committed supply, and they help us with the financing.

Speaker #1: That's going to make a significant difference to the company. We'll need to maintain as large cash balances as we can. We can use those cash balances to invest in drilling, in bolt-on acquisitions, and other acquisitions.

Bijan Mossavar-Rahmani: That's going to make a significant difference to the company. Won't need to maintain as large cash balances. We can use those cash balances to invest in drilling, in bolt-on acquisitions, and other acquisitions, and do so with cost of money being something under 6%, versus 12% for other Kurdistan oil and gas companies, versus other companies anywhere that are not of that size and scale of the Seven Sisters. That makes a big difference to us as well, and allows us to keep going in Kurdistan.

Speaker #1: And do so with a cost of money being something under 6%, versus 12% for other Kyrgyzstan oil and gas companies, versus other companies anywhere.

Speaker #1: Or not of that size and scale of the big sisters. And that makes a big difference to us as well and allows us to keep going in Kyrgyzstan.

Speaker #2: Any further questions?

Speaker #1: Anything more on that point, or have I covered it?

Speaker #3: No, I think now we have a very efficient and sustainable balance sheet, unless you say we now have a broader portfolio of financing sources.

Jostein Løvås: Any further questions?

Bijan Mossavar-Rahmani: More on that point, or have I covered this?

Birgitte Wendelbo Johansen: No, I think now we have a very efficient and sustainable balance sheet. As you say, we now have a broader portfolio of financing sources that fits the purpose and is also correctly priced. So yeah.

Speaker #3: That fits our purpose and is also correctly priced. So, yeah.

Speaker #2: Chris?

Speaker #1: Any more to add on this, or any other points?

Speaker #4: No, I think you've covered it very well.

Bijan Mossavar-Rahmani: Chris, more to add on this or any other points?

Speaker #2: Okay. With that.

Speaker #1: Thank you very much.

Chris Spencer: No, I think you have covered it very well, sir.

Speaker #2: With that, we can safely conclude this earnings call. Thank you all for attending, and see you again next quarter.

Jostein Løvås: Okay. With that.

Birgitte Wendelbo Johansen: Thank you, everybody.

Jostein Løvås: we can safely conclude this earnings call. Thank you to all for attending, and see you again next quarter.

Speaker #1: Thank you.

Speaker #4: Thank you.

Bijan Mossavar-Rahmani: Thank you.

Jostein Løvås: Thank you.

Chris Spencer: Thank you.

Birgitte Wendelbo Johansen: Thank you.

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