DNO Participates in Mistral Discovery; Eyes Quick Tieback

DNO ASA, the Norwegian oil and gas operator, has announced a significant gas/condensate discovery on the Mistral prospect in the Norwegian Sea license PL1119. The discovery, made by DNO's wholly-owned subsidiary DNO Norge AS, encountered a 45-meter hydrocarbon column with good reservoir properties in the Garn Formation. Preliminary estimates of gross recoverable resources encountered are in the range of 19-44 million barrels of oil equivalent (MMboe).

The Mistral discovery is located some 20 kilometers southwest of Equinor's ongoing Lavrans subsea development, making it a candidate for a fast-track tieback to this field. Given the good reservoir properties, the discovery likely allows for simplified development solutions, which could lead to a short payback period.

DNO entered into the Mistral license through a swap agreement with OKEA ASA, announced on 19 December 2024, shortly before the spud date of the discovery well. In exchange, OKEA picked up a 10 percent interest in North Sea license PL1109 containing the Horatio prospect, in which DNO has retained a 20 percent interest. Exploration drilling is ongoing at Horatio, and the DNO-OKEA transaction is subject to government approval.

The Mistral discovery aligns with DNO's strategic exploration portfolio, as it is a candidate for a fast-track tieback to existing infrastructure, reducing development costs and time. The discovery also demonstrates DNO's ability to successfully explore and develop new prospects in the Norwegian Sea, which is a key area of focus for the Company. In addition, the Mistral discovery is a result of DNO's strategy to diversify its exploration portfolio by entering into swap agreements with other companies, such as OKEA, to acquire interests in promising prospects.

The swap agreement with OKEA ASA allows DNO to diversify its exploration portfolio by entering a new geological play in the Norwegian Sea. While there are potential benefits, such as access to new prospects and synergies with existing operations, there are also risks associated with exploration, operations, regulations, and market fluctuations.

In conclusion, DNO's participation in the Mistral discovery and its plans for a quick tieback to the Lavrans field highlight the Company's strategic focus on near-infrastructure exploration and its ability to successfully develop new prospects in the Norwegian Sea. The swap agreement with OKEA ASA further demonstrates DNO's commitment to diversifying its exploration portfolio and balancing its exploration and development portfolio to reduce risks and increase the likelihood of success.