Content
Highlights
3
Key figures
4
Board of Directors
5
Board of Directors’ report
6
Introduction
6
Operations review
7
Business development
8
Financial performance
9
Corporate governance
10
Enterprise risk management
12
HSSE performance
13
Organization and personnel
14
Parent company
16
Main events since yearend
16
Sustainability statement
18
Responsibility statement
43
Consolidated accounts
46
Parent company accounts
104
Country-by-Country report
118
Auditor reports
119
Alternative performance measures
130
Glossary and definitions
133
Annual Report and Accounts 2024
DNO
3
Highlights
Highlights
DNO recorded 2024 revenues of USD 667 million on the back of stellar production in the Kurdistan region of
Iraq in a year also marked by continuing North Sea expansion . Net production climbed nearly 50 percent
year-on-year to 77,300 barrels of oil equivalent per day (boepd), to which Kurdistan contributed 59,000
boepd, North Sea 15,200 boepd and West Africa 3,100 boepd.
At Kurdistan’s Tawke license (75 percent and operator), DNO increased gross production from the Tawke
and Peshkabir fields by nearly 70 percent year-on-year to 78,600 boepd, with oil sold at its Fish Khabur
terminal as the Iraq-Türkiye export pipeline remained shut in. Sales prices averaged USD 35 per barrel with
payments deposited into DNO’s international bank accounts ahead of deliveries.
Maintaining strict capital spending discipline, DNO drilled no new wells on the Tawke license in 2024.
Notwithstanding, output was increased by bringing three previously drilled wells onstream and by workovers
and interventions on more than 20 other wells across the license.
In 2024, DNO took steps to expand its North Sea business by acquiring a 25 percent interest in the
producing Arran field in the United Kingdom and interests in four producing fields and one development
asset in the Norne area offshore Norway. Following these acquisitions and restart of production at the Trym
field following a five-year shutdown, DNO’s North Sea production climbed to 19,000 boepd in the fourth
quarter of the year.
Meanwhile, DNO is taking part in four ongoing North Sea field development projects expected to come
online between 2025 and 2028 that represent proven and probable reserves of some 30 million barrels of oil
equivalent (boe) net to the Company. Among the exploration highlights in a year of multiple discoveries was
the play-opening Othello light oil discovery (50 percent and operator), Norway’s second largest find in 2024.
Reflecting non-cash impairments of USD 146 million, annual operating profit dropped to USD 6 million.
However, cash from operations increased nearly 50 percent year-on-year to USD 433 million.
During 2024, the Company paid USD 103 million in dividends, exiting the year with cash deposits of USD
899 million and net cash of USD 99 million.
Following the end of the reporting period, in March 2025 DNO announced the transformative acquisition of
Sval Energi Group AS for a cash consideration of USD 450 million based on an enterprise value of USD 1.6
billion. The Sval Energi assets are complementary to DNO’s North Sea portfolio and will add scale and
diversification to solidify the Company’s position as a leading listed European independent oil and gas
company.
Looking ahead, the Company will continue to be characterized by low-cost production, successful
exploration, attractive growth prospects and a robust balance sheet. Norway’s oldest oil and gas company,
DNO, proudly retains its bold and nimble Viking DNA.
1
“DNO”, “Company” and “Group” may be used for convenience where reference is made to those companies. Likewise, the words “we”,
“us”, “our” and “ourselves” may be used with respect to the companies of the DNO Group.
4
DNO
Key figures
Key figures
Key financials (USD million)
2024
2023
Revenues
666.8
667.5
EBITDAX
422.2
431.5
EBITDA
333.3
383.8
Operating profit/loss
6.1
218.3
Net profit/loss
-27.1
18.6
Free cash flow
58.8
-86.8
Operational spend
568.0
561.9
Net cash/debt
99.0
152.7
Lifting costs (USD/boe)
6.5
10.7
Key operational data
2024
2023
Gross operated production (boepd)
80,280
46,500
Net production (boepd)
77,269
52,566
Sales volume (boepd)
33,918
28,885
Net 2P reserves (MMboe)
281.9
290.1
For reconciliation and more information about key figures, see the section on alternative performance measures.
Board of Directors
Annual Report and Accounts 2024
DNO
5
Board of Directors
BIJAN MOSSAVAR-RAHMANI
Executive Chairman
Bijan Mossavar-Rahmani has served as DNO’s Executive Chairman of the Board of Directors since 2011
and is a member of the nomination and remuneration committees.
Mr. Mossavar-Rahmani’s full-time role encompasses strategic, managerial and operational responsibilities at DNO,
of which he is the largest shareholder. An experienced industry executive, he has served as Chairman of the Board
of RAK Petroleum plc between 2013-2022, co-founder and Chairman of Foxtrot International since 1998 and
founder and first Chief Executive Officer of Apache International Inc. between 1988-1992. In addition to his industry
positions, he is active in philanthropy, education and the arts. He is a Trustee of the New York Metropolitan
Museum of Art where he chairs the Audit Committee and the Visiting Committee on Islamic Art and is a member of
the Executive Committee and the Finance Committee, a Director of the Persepolis Foundation and a member of
Harvard University’s Global Advisory Council and of Princeton University’s Nassau Hall Society. He has published
more than ten books on global energy markets and was decorated Commandeur de l’Ordre National de la Côte
d’Ivoire for services to the energy sector of that country. Mr. Mossavar-Rahmani is a graduate of Princeton (AB) and
Harvard Universities (MPA).
GUNNAR HIRSTI
Deputy Chairman
Gunnar Hirsti was elected to DNO’s Board of Directors in 2007, chairs the audit committee and is a member
of the remuneration committee.
Mr. Hirsti has extensive experience from various managerial, executive and board positions in the oil and gas
industry as well as the information technology industry in Norway. He was Chief Executive Officer of DSND Subsea
ASA (now Subsea 7 S.A.) for a period of six years. He also served as Executive Chairman of the Board of Blom
ASA for eight years. Mr. Hirsti holds a degree in drilling engineering from Tønsberg Maritime Høyskole in Norway.
ELIN KARFJELL
Director
Elin Karfjell was elected to DNO’s Board of Directors in 2015 and is a member of the audit committee.
Ms. Karfjell has held various management positions across a broad range of industries, including Director Property
Management and Development of Statsbygg, Managing Partner of Atelika AS and Chief Executive Officer of Fabi
Group, Chief Financial Officer of Atea AS and partner of Ernst & Young AS and Arthur Andersen. Current
directorships include Philly Shipyard ASA, North Energy ASA, Contesto AS and Scale Leap Capital I. Ms. Karfjell is
a state authorized public accountant with a Bachelor of Science in Accounting from OsloMet and a Higher Auditing
degree from the Norwegian School of Economics (NHH).
ANITA MARIE HJERKINN AARNÆS
Director
Anita Marie Hjerkinn Aarnæs was elected to DNO’s Board of Directors in 2022 and is a member of the HSSE
committee.
Ms. Hjerkinn Aarnæs is Managing Partner Nordics at The Board Practice. She has extensive international
experience with strategy development, governance and organizational effectiveness across industries and in
particular within the energy sector. She held the position as Director of Human Resources in the Company from
2012 to 2015, prior to which she had served as Managing Partner at Heidrick & Struggles and as Management
Consultant with PA Consulting Group. Ms. Hjerkinn Aarnæs was a member of the Board of Directors of Norwegian
Finans Holding ASA from its inception. She is a certified EFQM assessor. She holds a degree in Public Law and is
a graduate of the University of Oslo (Cand Mag) and Harvard University (MPA).
NAJMEDIN MESHKATI
Director
Najmedin Meshkati was elected to DNO's Board of Directors in 2023 and chairs the HSSE committee.
Dr. Najmedin Meshkati is a Professor of Civil/Environmental Engineering; Industrial & Systems Engineering and
International Relations at the University of Southern California. As a global leader and expert in human performance and
safety culture, Dr. Meshkati has served on numerous boards, councils and panels, including the United States panel
analyzing the causes of the Deepwater Horizon explosion. Dr. Meshkati holds a BS in Industrial Engineering and a
BA in Political Science from Sharif (Arya-Mehr) University of Technology and Shahid Beheshti University (National
University of Iran), respectively. He holds a MS in Engineering Management and a PhD in Industrial and Systems
Engineering from the University of Southern California. He is a Certified Professional Ergonomist.
Board of Directors’ report
6
DNO
Board of Directors’ report
Introduction
2024 full-year results highlights
●
million);
●
million) and North Sea revenues totaled USD 436 million
(2023: USD 414 million);
●
million);
●
million in 2023;
●
million in net cash (USD 719 million in cash and USD 153
million in net cash yearend 2023)
●
containing the Tawke and Peshkabir fields, averaged 78,615
barrels of oil per day (bopd) compared to 46,276 bopd in
2023;
●
52,566 boepd in 2023;
●
3,103 boepd of net production from equity accounted
investment; and
●
of oil equivalent (MMboe), compared to 290 MMboe at
yearend 2023.
For a detailed financial review, see section on financial
performance.
Our vision and strategic priorities
DNO is a Norwegian oil and gas operator active in the Middle
East, the North Sea and West Africa. DNO’s vision is to remain
a leading, growth-oriented exploration and production company
seeking to deliver attractive returns to shareholders by finding
and producing oil and gas at low cost and at an acceptable
level of risk in a socially responsible and environmentally
sensitive manner. To achieve this vision, our strategic priorities
include:
●
existing reserves base;
●
exploration and appraisal drilling;
●
efficient allocation of capital in line with DNO’s full-cycle
business model to deliver growth at a low unit cost;
●
best talent in the industry;
●
●
commitments and managing risks to the business;
●
best practices in our areas of operation; and
●
resources and control emissions.
Production strength and capacity
Across the portfolio, DNO’s gross operated production
averaged 80,280 boepd, up from 46,500 in 2023. In Kurdistan,
gross operated production was up 69 percent year-on-year to
78,620 bopd as output was held steady following the 2023
disruptions caused by the closure of the Iraq-Türkiye Pipeline
(ITP). Total net production averaged 77,269 boepd, up from
52,566 boepd in 2023. With net 2P reserves totaling 282
MMboe, DNO has the asset base to sustain material levels of
production over the long term.
Organic reserves and resource growth
Done in a structured manner, successful exploration can be one
of the most cost-efficient methods of delivering significant
reserves growth and associated value creation. At DNO, we
focus our efforts on areas where we have in-depth subsurface
knowledge, playing to our technical and operational strengths.
We benchmark each prospect so that capital deployed to
exploration is only allocated to those opportunities that meet our
technical, financial and strategic requirements. Looking ahead,
we will continue to pursue opportunities in the North Sea,
potentially complemented by selected targets in high potential
basins across the Middle East and West Africa with the goal of
transforming resources into reserves at a low unit cost.
Operational control and financial flexibility
We operate our most significant oil and gas assets and have
the experienced team and operational capabilities to efficiently
deliver our work programs. To maintain the financial strength
and flexibility to fund growth opportunities, we will look to
internally generated funds and, when necessary, to
international capital markets to strengthen the Company’s
balance sheet.
Encouraging an entrepreneurial culture
DNO’s growth and success revolve around the quality and
commitment of our people. We are an entrepreneurial company
with a flat organizational structure which means we can make
decisions quickly and execute flexibly. Our employment
practices and policies help our staff realize their full potential.
We are committed to developing local talent in each of our
areas of operations.
Mergers and acquisitions
In addition to organic growth, we continuously evaluate new
assets and take an opportunistic approach to potential
acquisitions.
Corporate governance and managing risk
One of our priorities is to ensure that DNO is a responsible and
transparent enterprise. We are committed to the highest
standards of corporate governance, business conduct and
corporate social responsibility. Recognizing that the success of
an oil and gas company is directly linked to how well risks are
managed, we seek to improve our systems designed to identify
and effectively manage risks. We respect fundamental human
rights, provide decent working conditions and are committed to
the health, safety and security of our employees, contractors
and the communities in which we operate. In addition, the
Company is continuously working to reduce the environmental
impact of our activities including with respect to greenhouse gas
(GHG) emissions. Such environmental, social and governance
matters are discussed in DNO’s first sustainability statement,
which is included in this Annual Report. The sustainability
statement has been prepared in accordance with the European
Sustainability Reporting Standards (ESRS). On human rights
and decent working conditions specifically, DNO will also report
according to the Norwegian Transparency Act and publish its
2024 statement by 30 June 2025.
Board of Directors’ report
Annual Report and Accounts 2024
DNO
7
Operations review
Annual Statement of Reserves and
Resources
The Company’s Annual Statement of Reserves and Resources
(ASRR) has been prepared in accordance with the Oslo Stock
Exchange listing and disclosure requirements Circular No.
1/2013. International petroleum consultants DeGolyer and
MacNaughton (D&M) carried out an independent assessment of
the Tawke license (containing the Tawke and Peshkabir fields)
and the Baeshiqa license (containing the Baeshiqa and Zartik
structures) in the Kurdistan region of Iraq (Kurdistan).
International petroleum consultants RPS Energy Consultants
(RPS) carried out an independent assessment of DNO reserves
and resources in Norway and the United Kingdom (UK). In
Norway, contingent resources also include volumes that are
classified as RC7F (production not evaluated) as reported by
the Norwegian Offshore Directorate (NOD). In 2023, the
international petroleum consultants Beicip-Franlab carried out
an independent assessment of DNO's CI-27 license (held
through its indirect 33.33 percent interest in the operating entity)
in Côte d’Ivoire. For the P2543 license (Agar) in the UK and
Block 47 in Yemen, DNO’s contingent resources are internally
assessed. The Dutch acreage held by DNO does not hold any
reserves or resources.
At yearend 2024, DNO’s net 1P reserves stood at 178.9
MMboe, compared to 206.4 MMboe at yearend 2023, after
adjusting for production during the year and changes due to
acquisitions and divestments, reclassifications and technical
revisions. On a 2P basis, DNO’s net reserves stood at 281.9
MMboe, compared to 290.1 MMboe at yearend 2023. On a 3P
basis, DNO’s net reserves were 340.1 MMboe, compared to
360.5 MMboe at yearend 2023. DNO’s net contingent (2C)
resources were 213.4 MMboe, up from 205.0 MMboe at
yearend 2023 after adjusting for new discoveries, volumes
moved to reserves and technical revisions.
While net production of 28.3 MMboe during 2024 drew on
DNO’s reserves, the impact was partially offset by acquisitions,
volumes moved up from contingent resources, as well as
technical revisions. Notably, DNO's 2024 acquisitions of stakes
in the Arran field offshore UK and Norne area assets in Norway
added a total of 4.9 MMboe in net 1P reserves, 7.8 MMboe in
net 2P reserves and 11.4 MMboe in net 3P reserves (after
allowing for divestment of Ringhorne East, used as part of the
consideration for the Norne area assets). Volumes moved from
contingent resources to reserves all relate to the 2024
sanctioning of the Bestla field development in Norway, which
added 2.9 MMboe to 1P reserves, 7.6 MMboe to 2P reserves
and 14.4 MMboe to 3P reserves, all on a net basis.
DNO’s net production in 2024 was 28.3 MMboe of which 21.6
million barrels (MMbbls) of oil were in Kurdistan, 4.8 MMboe in
Norway, 0.8 MMboe in the UK and 1.1 MMboe in Côte d’Ivoire.
Net production in 2023 was 19.2 MMboe of which 12.7 MMbbls
were in Kurdistan, 5.1 MMboe in Norway, 1.3 MMboe in Côte
d’Ivoire and the balance in the UK.
The Company’s net 2024 yearend Reserve Life Index (R/P)
stood at 6.3 years on a 1P reserves basis, 10.0 years on a 2P
reserves basis and 12.0 years on a 3P reserves basis.
The ASRR report for 2024 is available on the Company’s
website.
Kurdistan
Gross production from the DNO operated Tawke license,
containing the Tawke and Peshkabir fields, averaged 78,615
bopd during 2024 (46,276 bopd in 2023). The Tawke field
contributed 29,153 bopd (26,577 bopd in 2023) and the
Peshkabir field contributed 49,462 bopd (19,699 bopd in 2023).
Gross Tawke license production was up 70 percent year-on-
year as output was held steady in 2024 following the disruptions
caused by the closure of the ITP export route in 2023.
DNO sold its oil at its Fish Khabur terminal to local traders as
the ITP remained shut. Maintaining strict capital spending
discipline, DNO drilled no new wells on the Tawke license in
2024. Notwithstanding, output was kept at a high level by
bringing three previously drilled wells onstream and by
workovers and interventions on more than 20 other wells across
the license.
DNO holds a 75 percent operated interest in the Tawke license
with partner Genel Energy International Limited holding the
remaining 25 percent.
On DNO’s other Kurdistan license, Baeshiqa, gross operated
production averaged 5 bopd (224 bopd in 2023). The 2024
production resulted from well testing programs conducted in the
fourth quarter of the year. Based on the test results, DNO took
a partial impairment on the asset and is currently minimizing
running costs while determining its future work program.
DNO holds a 64 percent operated interest in the Baeshiqa
license (80 percent paying interest) with partners including the
Turkish Energy Company Limited (TEC) with a 16 percent
interest (20 percent paying interest) and the Kurdistan Regional
Government (KRG) with a 20 percent carried interest.
RESERVES
On a net basis at yearend 2024, 1P reserves in the Company’s
Kurdistan portfolio totaled 142.8 MMbbls (175.1 MMbbls at
yearend 2023), 2P reserves totaled 224.9 MMbbls (244.5
MMbbls at yearend 2023) and 3P reserves totaled 257.9
MMbbls (298.0 MMbbls at yearend 2023). Net 2C resources
were 59.5 MMbbls, unchanged from yearend 2023 level.
The Company’s Kurdistan reserves relate entirely to the Tawke
license. Out of the net 2C contingent resources in the Kurdistan
portfolio, the Baeshiqa license represented 38.1 MMbbls (39.1
MMbbls at yearend 2023).
North Sea
In 2024, DNO had diversified production across 15 fields in the
North Sea of which 12 were in Norway and three in the UK. In
2024, DNO took steps to expand its North Sea business by
acquiring a 25 percent interest in the producing Arran field in
the United Kingdom and interests in four producing fields and
one development asset in the Norne area offshore
Norway. With contributions from the new assets coming in at
the end of the year, North Sea net production increased to an
average of 15,201 boepd (14,203 boepd in 2023). Of the total,
13,057 boepd were attributable to Norway and 2,144 to the UK
(13,926 boepd and 277 boepd, respectively, in 2023).
Meanwhile, DNO is taking part in four ongoing North Sea field
development projects expected to come online between 2025
and 2028 that represent proven and probable reserves of 26.2
Board of Directors’ report
8
DNO
MMboe net to the Company. These are Andvare (32 percent),
Bestla (39.2 percent), Verdande (10.5 percent) and Berling (30
percent). In addition, DNO continued to mature other
discoveries towards project sanction.
DNO drilled three exploration wells in the North Sea in 2024,
namely Othello (50 percent and operator), Cuvette (20 percent)
and Ringand (20 percent). All three were discoveries. The play-
opening Othello light oil discovery was Norway’s second largest
find in 2024, significantly derisking nearby prospects in DNO’s
exploration portfolio. In addition, DNO drilled two combined
exploration and appraisal wells in 2024 to assess the resource
potential surrounding the 2023 Heisenberg discovery (spanning
two licenses in which DNO holds 49 and 20 percent,
respectively). While Heisenberg was successfully delineated,
the additional exploration targets (Hummer and Angel) did not
deliver the desired results.
RESERVES
At yearend 2024, DNO held 85 licenses in Norway in various
stages of exploration, development and production (73 licenses
at yearend 2023). Across its Norway portfolio and on a net
basis, DNO’s 1P reserves totaled 27.7 MMboe, 2P reserves
stood at 44.9 MMboe, 3P reserves totaled 66.0 MMboe and 2C
resources stood at 144.0 MMboe. The comparable yearend
2023 figures were 1P reserves of 23.7 MMboe, 2P reserves of
34.8 MMboe, 3P reserves of 49.0 MMboe and 2C resources of
132.0 MMboe. In 2024, reserves in Norway increased with the
sanctioning of the Bestla field development and the acquisition
of Norne area assets.
In the UK, DNO held seven licenses at yearend 2024 (four
licenses at yearend 2023). On a net basis, 1P reserves totaled
1.9 MMboe, 2P reserves stood at 2.8 MMboe, 3P reserves
totaled 4.1 MMboe and 2C resources of 22.1 MMboe at
yearend 2024. The comparable yearend 2023 figures were 1P
reserves of 0.1 MMboe, 2P reserves of 0.3 MMboe, 3P
reserves of 0.4 MMboe and no 2C resources, all on a net basis.
The increase in reserves and resources was due to both the
acquisition of the Arran field and the inclusion of the license
containing the Agar discovery, the latter formally allocated to
DNO in February 2024.
West Africa
Through a one-third stake in the operating company, Foxtrot
International, DNO holds a nine percent interest in Côte
d’Ivoire’s Block CI-27. The block includes four fields producing
over 75 percent of Côte d’Ivoire’s domestic gas supply.
Formerly, Foxtrot International also operated the CI-12
exploration block, from which it withdrew in October 2024 after
having fulfilled the exploration obligations pertaining to the
license.
RESERVES
In West Africa, DNO held yearend 2024 1P reserves of 6.4
MMboe, 2P reserves of 9.4 MMboe, 3P reserves of 12.0
MMboe and 2C resources of 5 MMboe. The comparable
yearend 2023 figures were 1P reserves of 7.6 MMboe, 2P
reserves of 10.5 MMboe, 3P reserves of 13.2 MMboe and 2C
resources of 8.6 MMboe, all on a net basis.
Yemen
Production start-up at the Yaalen field at Block 47 in Yemen,
currently under force majeure, remains on hold. At yearend
2024, 2C resources at Block 47 stood at 4.8 MMbbls on a net
basis, unchanged from yearend 2023.
Business development
During 2024, DNO stepped up its business development
activities with a particular focus on acquiring producing assets
in the North Sea to complement its strong development and
exploration portfolio in the region.
In May 2024, the Company completed the acquisition of a 25
percent interest in the Arran gas field on the UK Continental
Shelf. Acquired by the Company’s wholly-owned subsidiary
DNO Exploration UK Limited from ONE-Dyas E&P Limited, the
field is operated by Shell UK Limited and was brought on
stream in 2021 as a subsea tie-back to the Shell-operated
Shearwater A platform. The consideration paid upon completion
was approximately USD 60 million. Arran is expected to have a
short payback period, in part due to financial synergies between
Arran and DNO’s existing position in the UK.
In September 2024, the Company completed the acquisition of
stakes in five oil and gas fields, including an operatorship, in the
Norne area in the Norwegian Sea from Vår Energi ASA.
Following closing, DNO’s wholly-owned subsidiary DNO Norge
AS holds interests in all producing and under development
fields in the greater Norne area, making it a core area for the
Company on the Norwegian Continental Shelf. The net cash
consideration paid by DNO was approximately USD 28 million.
The transfer of DNO’s 22.6 percent interest in Ringhorne East
to Vår Energi ASA, the other element of the transaction, was
completed simultaneously.
The Norne area transaction included interests in four producing
fields, Norne (6.9 percent), Skuld (11.5 percent), Urd (11.5
percent) and Marulk (20 percent and operatorship) plus a stake
in the ongoing Verdande development (10.5 percent), which is
expected to come onstream in 2026. Prior to the transaction,
DNO held interests in Alve (32 percent), Marulk (17 percent),
and the Andvare development (32 percent) in the Norne area.
All fields in the Norne area are tied back to the Equinor-
operated Norne FPSO. With its expanded area position, DNO
has stepped up studies of near-field exploration targets and infill
well opportunities.
The acquisitions completed during 2024 contributed to increase
the gas share in the production mix of DNO North Sea, which in
the fourth quarter of 2024 stood at 43 percent (36 percent for
2024).
In the North Sea, DNO continued on high grading its portfolio in
2024 through a combination of licensing round awards, license
transactions and relinquishment of licenses deemed
unattractive following evaluation. Shortly before yearend, DNO
farmed into a 10 percent interest in the Mistral exploration well
in the Norwegian Sea. In exchange, the counterparty picked up
a 10 percent interest in the Northern North Sea Horatio
prospect, in which DNO retained a 20 percent stake.
Across the portfolio, the Company continues to develop a
pipeline of new business opportunities to supplement its current
position in the Middle East, the North Sea and West Africa. It
actively pursues growth opportunities across the exploration
and production lifecycle, including exploration, development
Board of Directors’ report
Annual Report and Accounts 2024
DNO
9
and production, both organically as well as through potential
mergers and acquisitions.
Financial performance
Revenues, operating profit and cash
Total revenues in 2024 stood at USD 666.8 million (USD 667.5
million in 2023). Kurdistan revenues stood at USD 230.8 million
(USD 253.2 million in 2023), while the North Sea generated
revenues of USD 436.0 million (USD 414.4 million in 2023). The
reported 2024 revenues were negatively impacted by the March
2023 ITP shutdown in Kurdistan, causing lower Kurdistan
production with volumes sold in the local market at lower
realized oil prices than previously achieved through export.
The Group reported an operating profit of USD 6.1 million (USD
218.3 million in 2023). The lower operating profit in 2024 was
driven by impairments, higher cost of goods sold and higher
exploration expenses.
The Group ended the year with USD 899.0 million in cash and
USD 99.0 million in net cash (USD 718.8 million in cash and
USD 152.7 million in net cash at yearend 2023).
Net cash flows from operating activities for the year was USD
413.0 million, up from USD 194.1 million in 2023. The
significant increase in net cash flows from operating activities
was mainly due to increase in trade and other payables and
lower tax payments in the North Sea, partly offset by increase in
trade and other receivables and interest payments. The
difference between the cash generated from operations from
the cash flow statement and the operating profit relates mainly
to depreciation, impairment charges and increase in trade and
other payables.
Investing activities of USD 354.2 million (USD 281.0 million in
2023) consist of USD 287.0 million in asset investments, USD
84.8 million in license transactions (Arran, Norne area) and
USD 4.9 million in decommissioning, partly offset by USD 22.4
million cash inflow from equity accounted investments (West
Africa).
Net cash inflow from financing activities of USD 123.2 million
(outflow of USD 147.0 million in 2023) was mainly related to
proceeds from borrowings partly offset by repayment of
borrowings and paid dividends.
Cost of goods sold
In 2024, the total cost of goods sold was USD 406.9 million,
compared to USD 364.8 million in 2023. The increase in cost of
goods sold was mainly driven by higher depreciation costs due
to higher production.
Impairment charges
The Group’s total impairment charges stood at USD 146.0
million in 2024, of which USD 89.0 million related to Baeshiqa
license in Kurdistan and USD 57.0 million to the North Sea
(USD 24.9 million in 2023 entirely related to the North Sea).
Exploration costs expensed
Total expensed exploration costs for the year were USD 88.9
million, up from USD 47.7 million in 2023, mainly driven by
expensing of wells.
Capital expenditures
Total capital expenditures for the year were USD 287.0 million
in 2024 (USD 278.3 million in 2023), of which USD 46.8 million
were in Kurdistan and USD 239.3 million in the North Sea (USD
73.0 million and USD 204.4 million in 2023, respectively). Of the
total, USD 87.2 million (USD 114.6 million) were related to
exploration drilling activities. The reduction in Kurdistan capital
expenditures was a result of the Company’s cost reduction
measures, following the ITP shutdown in March 2023.
Assets, liabilities and equity
At yearend 2024, total assets stood at USD 2,966.1 million,
compared to USD 2,638.3 million at yearend 2023. The
increase in total assets compared to last year was mainly due
to increase in cash balance, goodwill from asset acquisitions,
trade receivables and capitalized exploration cost partly offset
by higher impairments. Total property, plant and equipment
(PP&E), intangible assets and goodwill increased from USD
1,378.5 million at yearend 2023 to USD 1,440 at yearend 2024.
Total liabilities were USD 1,886.1 million, compared to USD
1,403.5 million at yearend 2023. The equity ratio stood at 36.4
percent at yearend 2024 (46.8 percent at yearend 2023). The
equity ratio dropped primarily due to the issue of the DNO05
bond, recognition of decommissioning liabilities in connection
with asset acquisitions and a net loss in 2024.
Going concern
The Company regularly evaluates its financial position, cash
flow forecasts and its compliance with financial covenants by
considering multiple combinations of oil and gas prices,
production volumes, and operational spend scenarios.
As required under the Norwegian Accounting Act, the
Company’s Board of Directors conducted a review of the going
concern assumption considering all relevant information
available up to the date the DNO consolidated and Company
accounts are issued and taking into account all available
information about the future covering at least 12 months from
the end of the reporting period. The Board of Directors’ review
included, in particular, assessment of the Group’s projected
cash reserves and access to financing arrangements, debt
maturities, operational outlook and work programs, while
maintaining appropriate headroom in respect of sound equity,
liquidity and financial covenant compliance throughout the
assessment period.
Following its review, the Board of Directors confirmed, pursuant
to the Norwegian Accounting Act section 3-3a, that the
requirements of the going concern assumption are met and that
these financial statements have been prepared on that basis.
Board of Directors’ report
10
DNO
Corporate governance
DNO’s corporate governance policy is based on the
recommendations of the Norwegian Code of Practice for
Corporate Governance.
The Articles of Association and the Norwegian Public Limited
Liability Companies Act form the corporate legal framework for
DNO’s business activities. In addition, DNO is subject to, and
complies with, the requirements of Norwegian securities
legislation.
The Group regularly reports on its strategy and the status of its
business activities through annual reports, half-year and full-
year results and other market presentations and releases.
Equity and dividends
SHAREHOLDERS’ EQUITY
It is DNO’s policy to maintain a strong credit profile and robust
equity level. The financial covenants of the bonds issued by
DNO require that the Group maintains either an equity ratio of
30 percent or a total equity of a minimum of USD 600 million.
As of 31 December 2024, the equity ratio was 36.4 percent and
total equity was USD 1,080 million.
DIVIDEND POLICY AND DISTRIBUTIONS
The Board of Directors assesses on an annual basis whether
authorizations to the Board to distribute dividend should be
proposed for approval by the shareholders at the Annual
General Meeting (AGM). Assessment is based on planned
operational spend, cash flow projections and DNO’s objective of
maintaining a strong credit profile and robust capital ratios.
Based on the authorizations granted, the Board also assesses
dividend capacity prior to each resolution on dividend payment.
At the 2023 AGM, 99.93 percent of the votes cast approved the
resolution to authorize the Board of Directors to approve
dividend distributions at its own discretion from the date of the
2023 AGM until the date of the 2024 AGM. Following this, the
Board of Directors resolved to distribute quarterly dividends of
NOK 0.25 in August and November 2023, as well as in
February and May 2024.
At the 2024 AGM, 100 percent of the votes cast approved of the
resolution to authorize the Board of Directors to approve
dividend distributions at its own discretion from the date of the
2024 AGM until the date of the 2025 AGM. Following this, the
Board of Directors decided to distribute quarterly dividends of
NOK 0.3125 in August and November 2024, as well as in
February 2025.
OTHER AUTHORIZATIONS TO THE BOARD OF
DIRECTORS
Going into 2024, the Board of Directors had authorizations from
the 2023 AGM to acquire treasury shares, increase the share
capital and raise convertible bonds until the 2024 AGM, but no
later than 30 June 2024. These authorizations were not utilized.
A new authorization to acquire treasury shares was approved
by the 2024 AGM, as the Board of Directors was given the
authority to acquire treasury shares with a total nominal value of
up to NOK 24,375,000 which corresponds to 97,500,000
shares. The maximum amount that can be paid for each share
is NOK 100 and the minimum is NOK 1. The acquisition and
sale of treasury shares may take place in any way the Board
may find appropriate other than by subscription of shares. The
authorization is valid until the 2025 AGM, but not beyond 30
June 2025.
The 2024 AGM also authorized the Board of Directors to
increase the Company’s share capital by up to NOK 24,375,000
which corresponds to 97,500,000 new shares. The
authorization is time-limited until the 2025 AGM, and not
beyond 30 June 2025.
In addition, the Board of Directors was given the authority to
raise convertible bonds with an aggregate principal amount of
up to USD 300,000,000. Upon conversion of bonds issued
pursuant to the authorization, the Company’s share capital may
be increased by up to NOK 24,375,000. The authorization is
valid until the 2025 AGM, but not beyond 30 June 2025.
Equal treatment of shareholders and
transactions with related parties
The Company has one class of shares and each share
represents one vote. We are committed to treating all
shareholders equally.
All transactions between the Company and related parties shall
be on arm’s length terms. Members of the Board of Directors
and senior management are required to notify the Board if they
have any direct or indirect material interest in any transaction
entered into by the Company.
Freely negotiable shares
The Company’s shares are listed on the Euronext Oslo Stock
Exchange and are freely negotiable.
General meetings
The AGM, usually held in the end of May or early June each
year, is the highest authority of the Company. The minutes of
the meetings are available on the Company’s website.
AGMs are convened by written notice to all shareholders with a
known address and published on the Company’s website
together with all appendices, including the recommendations of
the nomination committee. The notice is sent and published no
later than 21 days prior to the date of the meeting. Any person
who is a shareholder at the time of the AGM can attend and
vote, provided they have been registered as a shareholder no
later than the fifth working day before the meeting.
Shareholders unable to attend a general meeting may vote
through a proxy.
In accordance with the Norwegian Public Limited Liability
Companies Act, the external auditor of DNO, or shareholders
representing at least five percent of the share capital, may
request an extraordinary general meeting to deal with specific
matters. The Board of Directors must ensure that the meeting is
held within one month after the request has been submitted.
Board of Directors’ composition
The Company’s Articles of Association require that the Board of
Directors consist of three to seven members. All members,
including the Executive Chairman, are elected with an election
period until the 2025 AGM. As of 31 December 2024, the Board
Board of Directors’ report
Annual Report and Accounts 2024
DNO
11
of Directors consisted of five members, all of whom have
relevant and broad experience.
The board members’ shareholdings are specified in the notes to
the consolidated accounts.
The Board of Directors’ work
The role of the Board of Directors is to supervise the
Company’s overall management and strategic development in
accordance with the long-term interests of the Company’s
shareholders and other stakeholders.
The Board of Directors is subject to a set of procedural rules
that, among other things, defines its responsibilities and the
matters to be discussed at board level. The Board of Directors
also regularly establishes work directives for the Managing
Director.
Directors’ and officers’ insurance
The Company has directors’ and officers’ liability insurance
which covers the cost of compensation claims made against the
Company’s directors and key managers (officers) for alleged
wrongful acts.
The Board of Directors’ committees
AUDIT COMMITTEE
The audit committee consists of two members: Mr. Gunnar
Hirsti (chair) and Ms. Elin Karfjell. The audit committee monitors
the financial accounting and reporting process, including
sustainability reporting. Its responsibilities by law include
monitoring the systems for internal control, risk management
and the internal audit function, as well as reviewing and
monitoring the appointment, independence, and performance of
the external auditor.
HSSE COMMITTEE
The HSSE (health, safety, security and environment) committee
consists of Dr. Najmedin Meshkati (chair) and Ms. Anita Marie
Hjerkinn Aarnæs. Its mandate is to review the Company’s
management of operational HSSE risks and performance.
REMUNERATION COMMITTEE
The remuneration committee consists of two members: Mr.
Bijan Mossavar-Rahmani and Mr. Gunnar Hirsti. Its mandate is
to consider matters relating to the compensation of senior
management.
NOMINATION COMMITTEE
The Company’s nomination committee consists of Mr. Bijan
Mossavar-Rahmani and two external members, Mr. Ferris J.
Hussein and Mr. Kåre Tjønneland. Its mandate is to propose
candidates for the Board of Directors and its various
committees to the AGM. It also proposes the level of
remuneration for the Board of Directors and committee
members.
It is the Company’s assessment that it is in the interest of DNO
and its shareholders that the largest shareholder is represented
on the nomination committee. To ensure the independence of
the nomination committee, it also consists of two additional
members who are both considered independent of the Board of
Directors and the Company’s main shareholders.
REMUNERATION OF DIRECTORS
The remuneration of the Board of Directors and its committees
is decided by the AGM based on a recommendation from the
nomination committee. Fees reflect the Board of Directors’
responsibility, competence, workload and the complexity of the
business and are determined separately for the Executive
Chairman, the Deputy Chairman and other members. Additional
fees are applied on a uniform basis for each director’s
participation in the committees. Further information about the
Board of Directors’ remuneration is presented in the parent
company accounts (see Note 3).
Remuneration of senior management
The remuneration of the Company’s senior management,
including the Managing Director, is subject to the evaluation
and recommendation of the remuneration committee. The
remuneration of the Company’s Managing Director is evaluated
annually and approved by the Board of Directors.
The remuneration of senior management is presented in the
parent company financial statements (see Note 3).
Responsibility for risk management and
internal control
Risk management is integral to all of the Group’s activities.
Each member of senior management is responsible for
continuously monitoring and managing risk within the relevant
business areas. Every material decision is preceded by an
evaluation of applicable business risks.
Reports on the Group’s risk exposure and reviews of its risk
management are regularly undertaken and presented to the
senior management and the Board of Directors through the
audit committee. The Company has an internal audit function
and a compliance function whose responsibilities include
ensuring that regulatory requirements and internal policies are
followed.
Information and communication
Our policy is to provide material information to all shareholders
in a timely manner.
DNO’s consolidated financial statements are prepared in
accordance with IFRS Accounting Standards as adopted by the
EU and additional disclosure requirements in the Norwegian
Accounting Act. Interim reports and other relevant information
are published on DNO’s website and through the Oslo Stock
Exchange.
DNO also publishes an annual financial calendar setting out key
dates and events, such as regular market presentations. The
DNO investor relations policy encourages open communication
with capital markets and shareholders. In addition to scheduled
quarterly presentations, we regularly hold presentations for
investors and analysts.
Takeover
The Board of Directors has a responsibility to ensure that, in the
event of a takeover bid, business activities are not disrupted
unnecessarily. The Board of Directors also has a responsibility
to ensure that shareholders have sufficient information and time
to assess any such bid. Should a takeover situation arise, the
Board of Directors would undertake an evaluation of the
proposed bid terms and provide a recommendation to the
shareholders as whether or not to accept the proposal. The
recommendation statement would clearly state whether the
Board of Directors’ evaluation is unanimous and the reasons for
any dissent.
Board of Directors’ report
12
DNO
Auditor
DNO’s external auditor is elected at the AGM, which also
approves the auditor’s fees for the parent company. The auditor
annually presents an audit plan to the audit committee and
participates in audit committee meetings to review the Group’s
internal control and risk management systems. The auditor also
participates in board meetings when considered appropriate,
with and without senior management present.
Information about the auditor’s fees, including a breakdown of
audit related fees and fees for other services, is included in the
notes to the financial statements in accordance with the
Norwegian Accounting Act.
DNO’s external auditor is Ernst & Young AS.
Enterprise risk management
The objective of DNO’s risk management is to identify potential
exposures that may impact the Group and to manage identified
risks within strict guidelines while pursuing our business
objectives. We continuously review our risk profile,
incorporating industry-recognized risk identification and
quantification processes. The Board of Directors and its
committees also regularly monitor the Group’s risk
management systems and internal controls.
Financial risk
Risks related to oil and gas prices, interest rates and currency
exchange rates, liquidity risk, concentration risk and credit risk
constitute financial risks for the Group. Financial risks are
managed by the Group finance function based on guidelines set
by the Board of Directors. For more information about how we
manage financial risk, see Note 23 in the consolidated
accounts.
Entitlement risk
DNO has interests in two licenses in Kurdistan through
Production Sharing Contracts (PSCs) and has based its
entitlement calculations on the terms of these PSCs.
The Company notes from public reports that on 15 February
2022, the Federal Supreme Court of Iraq (FSCI) ruled on two
matters, one stemming back to 2012 and another related matter
dating back to 2019. Reportedly, the FSCI found amongst other
things that the Kurdistan Oil and Gas Law No. 27/2007 (KOGL)
is unconstitutional, that the KRG is to hand over all oil
production from areas located in the Kurdistan region of Iraq
(KRI) to the Federal Government of Iraq (FGI) and that the FGI
has the right to pursue the nullity of the oil contracts concluded
by the KRG. DNO was not a party to these proceedings.
Further, DNO learned via media reports that on 4 July 2022, the
Karkh commercial court in Baghdad ruled that PSCs signed
between the KRG and four international oil companies
(including DNO) should be voided. Similar cases were reported
as regards four other international oil companies over the
ensuing weeks. Media then reported that on 21 August 2022,
the KRG filed third party objections to the reported 2022
Baghdad court rulings including those understood to concern
DNO. On 18 December 2024, it was reported that the Karkh
Court of Appeal ruled in favor of inter alia the KRG, confirming
that the PSCs in question were valid. That ruling was also
reportedly appealed by the FGI, however, on 22 January 2025,
DNO learnt, again from media reports, that the Court of
Cassation dismissed the FGI’s appeal and thus confirmed that
the PSCs are valid. On 27 February 2025, there were reports
that the FGI had requested a correction of the rulings of the
Court of Cassation. The Company notes that this process does
not allow the FGI to introduce new evidence or arguments; it
merely seeks to correct perceived errors in the Court of
Cassation’s ruling. As far as the Company is aware, that
process is still pending. Throughout the period when these
cases were pending, the KRG issued repeated assurances that
the PSCs remain valid and there were also several rulings in
Erbil courts affirming the validity of the PSCs.
In 2014, the FGI initiated an arbitration case against the
Government of Türkiye and its state-owned pipeline operator
BOTAS relating to the ITP. Following an arbitration ruling which
became publicly known on or around 24 March 2023, and which
were in parts in favor of Iraq, the ITP was closed on 25 March
2023. As of the reporting date, the ITP remains closed, despite
Türkiye’s announcement in October 2023 that the ITP is ready
to resume operations. Timing of export resumption is uncertain.
Consequently, DNO initiated cost reduction measures in
Kurdistan and commenced local sales on a cash and carry
basis, where the oil is transported by traders by road tanker or
pipelined to local refineries. The contractor entities’ entitlement
is sold by DNO. Varying by contract, local selling prices were in
the mid USD 30s per barrel during 2024, significantly lower than
the international prices previously achieved through pipeline
export. However, all local deliveries are prepaid by the buyers
directly to DNO, eliminating counterparty credit risk.
The FGI’s 2023-2025 Federal Iraqi Budget Law (Budget Law)
entered into force in June 2023. The details of FGI-KRG budget
allocations, implementation of the Budget Law and the
monetary size of the budget transfers to the KRG are not clear
to DNO. DNO notes however that on 2 February 2025, the Iraqi
Parliament approved amendments of the Budget Law. There
have been several media reports that indicate that the Budget
Law amendment may enable restart of export of Kurdish oil
through the ITP. DNO and other member companies of the
Association of the Petroleum Industry of Kurdistan (APIKUR)
have repeatedly stated that they are prepared to resume
exports, contingent upon reaching agreements that provide for
payment surety for past and future exports, direct payment and
preservation of the legal, commercial and economic terms of
their production sharing contracts (Conditions). It is unclear to
the Company how implementation of the amended Budget Law
can facilitate satisfaction of the Conditions. It is also not clear
how the KRG and the FGI will address these matters. DNO
continues its operations in Kurdistan, and developments are
closely monitored.
Due to the disagreements between the FGI and the KRG,
economic conditions in Kurdistan and limited oil export
channels, DNO has historically faced constraints in fully
monetizing the oil it produces in Kurdistan. There is no
guarantee that oil can be exported or sold locally in sufficient
quantities or at prices required to sustain DNO’s operations and
investment plans or that the Group will promptly receive its full
entitlement payments for any oil it delivers for export if the ITP
reopens. Export sales have not always followed the PSC terms.
Furthermore, there has also previously been uncertainty related
to receipt of payments for oil sold to the KRG but
notwithstanding sometimes lengthy delays, payments have
ultimately been received by DNO.
At yearend 2024, the Company was owed a total of USD 298.1
million, excluding any interest, by the KRG mainly related to
Board of Directors’ report
Annual Report and Accounts 2024
DNO
13
export oil sales to the KRG for the months October 2022
through March 2023. These receivables are past due (see Note
15). The KRG has repeatedly stated that it is and remains
committed to its PSCs.
Timing of export resumption and payments for previous oil
sales by the KRG is uncertain. The Company continues to
engage with the KRG regarding recovery of the arrears and
payment terms and conditions for any future oil exports.
The Company’s PSCs include rights for the host government to
audit the PSC accounts and there is uncertainty relating to the
outcome and impact of any such audit on the Company’s
recovery of costs and financial results. During 2024 in
Kurdistan, such audits were carried out with respect to the
Baeshiqa 2018-2019 Accounts and the Tawke 2021 Accounts.
Operational risk
DNO is exposed to operational risks across its portfolio.
Operational risk applies to all stages of upstream operations,
including exploration, development and production. Failure to
manage operations efficiently can manifest itself in project
delays, cost overruns, higher-than-estimated operating costs
and lower-than-expected oil and gas production and/or
reserves. Exploration activities are capital intensive and involve
a high degree of geological risk. Sustained exploration failure
can affect the future growth and upside potential of DNO. Our
ability to effectively manage and deliver value from our
exploration, development and production activities is dependent
on the quality of our staff and contractors. Inefficiency or
interruption to our supply chain or the unwillingness of service
contractors to engage in our areas of operation may also
negatively affect operations.
DNO seeks to mitigate its operational risk through diligent
follow-up and management of both operated and partner-
operated assets. Defined targets and milestones are set for all
exploration and development projects, against which progress
is continuously monitored, allowing for early identification of
complications and timely remedial action. Risks of inefficiency
or interruption in the value chain are managed through close
monitoring of operational progress, efforts to eliminate the
probability of occurrence, as well as plans to mitigate adverse
consequences of such incidents should they occur.
Political risk
Our portfolio is located in some countries where political, social
and economic instability may adversely impact our business.
Relevant political developments on both the federal and
regional level in Iraq and otherwise in the Middle East are
closely monitored by the Group, although our operations to date
have been minimally impacted.
The Company notes the implications for commodity prices and
potential interruptions of supply chains and third-party services
from the ongoing conflicts. DNO is monitoring international
sanctions and trade control legislation to ensure compliance
and mitigate the potential impact on the Company’s operations.
Stakeholder risk
In order to operate effectively, the Company is maintaining
productive and proactive relationships with its stakeholders,
host governments, business partners and the communities in
which we operate. Failure to do so can result in difficulties in
progressing initiatives as well as delays to ongoing operations.
Other risks
Environmental, climate-related, security and compliance risks
are described in the Sustainability Statement.
HSSE performance
Our HSSE standards, procedures and protocols are based on
the following principles:
●
●
operations on the environment;
●
and
●
During 2024:
●
compared to 1.50 in 2023.
●
to one in 2023.
●
distances driven of 2.8 million kilometers.
●
of 7.4 billion cubic feet (bcf) of otherwise-flared associated
gas was captured and injected in 2024, delivering GHG
savings of 528,426 tonnes of CO
2
e.
●
captured and injected since gas injection started in 2020,
delivering GHG savings of 2.1 million tonnes of CO
2
e.
●
and
●
barrels in 2023, most of which was removed and remediated.
A key metric for assessing and benchmarking the Company’s
safety performance is the Total Recordable Injury Frequency
(TRIF). In 2024, DNO had a TRIF of 1.06 in its operational
activities, down from 1.50 in 2023. The 2024 figure is above the
industry average TRIF of 0.84 (based on data from International
Association of Oil and Gas Producers (IOGP) for 2023, the
latest year for which data is available). The Company is
determined to improve its safety performance and aims for a
TRIF at the IOGP industry average or better.
In 2024, DNO took additional concrete steps to improve traffic
safety at its Kurdistan sites. Driving represents considerable
risk to personnel in onshore oil and gas operations and
contractor drivers have historically had the worst accident
statistics. In response to this, portable In-Vehicle Monitoring
System (IVMS) units were introduced in contractor vehicles
entering DNO sites in 2024. The IVMS gives the contractor
drivers feedback in real-time about driving behaviors and allows
DNO to monitor speeds, acceleration and harsh braking linked
directly to at-risk driving habits. This and other initiatives
contributed to improvement in road safety, leading to zero
serious driving incidents in 2024.
DNO also rolled out a campaign in 2024 called “Being Safe
24/7 - Work Safe, Safe Home,” which aims to build a bridge
between work and home life, making safety a part of
Board of Directors’ report
14
DNO
employees’ everyday life at work and at home with their
families.
Going forward, DNO seeks to further improve HSSE training in
the field in Kurdistan. To improve retention and overcome
language barriers, the Company is moving away from text-
based training and has recently introduced virtual training
methods.
Further information about HSSE performance can be found in
the Sustainability Statement under Environment and Social
sections.
Organization and personnel
At yearend 2024, DNO had a workforce of 1,070 employees, of
which 14 percent were women. A total of 55 individuals were
based at the Company’s headquarters in Oslo and 1,015 were
engaged across our international operations, including in
business unit offices in Erbil, Stavanger, Dubai and Aberdeen.
Our workforce is characterized by strong cultural, religious and
national diversity, with 39 nationalities represented.
At yearend 2024, the Board of Directors consisted of five
members, two of whom are women (40 percent). Senior
management consisted of five women (45 percent) and six
men.
The Company is committed to maintain a working environment
with equal opportunities for all based on qualifications,
irrespective of gender, ethnicity, sexual orientation, or disability.
DNO continues to recruit and promote women who at yearend
2024 represented 33 percent of employees in managerial,
administrative and other non-field operational positions. In the
Erbil office, women represented 23 percent of all employees;
the comparable figure in the Dubai office was 23 percent and
41 percent across the Oslo, Stavanger and Aberdeen offices
combined.
There were no incidents of discrimination reported through the
internal mechanisms for raising concerns in 2024.
Sickness absence in the Group in 2024 was 1.77 percent,
compared to 1.0 percent in 2023.
Workforce diversity in DNO Norway
In Norway, DNO had a workforce of 198 employees at yearend
2024, of which 41 percent were women. A total of three
employees worked part time during 2024, of which two were
women. No employees in DNO work part time unless they have
initiated or proposed it themselves. A total of 19 employees
were on parental leave. Women had an average of 22 weeks of
parental leave and men had an average of 10 weeks of parental
leave.
Salary mapping of 2024 average women’s salaries and
bonuses compared to those of their male colleagues in the
same job category is shown below in descending order of
seniority for Norway-based employees:
Women's compensation as percentage of those of
men's:
Base salary
Bonus
Level 1
77%
59%
Level 2
96%
108%
Level 3
96%
96%
Level 4
89%
77%
Level 5
NA
NA
All employees
83%
77%
Men and women with the same level of jobs, with equal
professional experience and who perform equally receive the
same pay in DNO. The complexity of the job, discipline area
and work experience affect the pay level of individual
employees.
As a Norway-based but international company, diversity is an
important part of our human resources processes such as
recruitment, succession planning, promotions, performance
management and employee development.
Working environment in DNO Norway
In Norway, DNO has a Working Environment Committee (WEC)
as required under the Norwegian Working Environment Act.
The committee has an important role in monitoring and
improving the working environment and in ensuring that the
Company complies with laws and regulations in this area. The
Company is committed to maintaining an open and constructive
dialogue with the employee representatives and arranged
meetings on a regular basis throughout the year. In the Board
of Directors’ view, the working environment in DNO during 2024
was good as confirmed through WEC meetings and employee
satisfaction surveys.
More information about organization and personnel can be
found in the Sustainability Statement under Social section.
Leading personnel remuneration policy
The 2024 remuneration of the Company’s senior management
was based on the latest approved remuneration guidelines at
the 2023 AGM, as published on the Company’s website.
Board of Directors’ report
Annual Report and Accounts 2024
DNO
15
Senior management
CHRIS SPENCER
Managing Director
Mr. Spencer joined DNO in 2017. Mr. Spencer previously served as CEO of Rocksource ASA and in various roles at
Royal Dutch Shell and BP. Mr. Spencer is a Chartered Engineer with the Institution of Chemical Engineers in the
United Kingdom.
ERLEND WOLLAN EINUM
Chief Business Development Officer
Mr. Einum joined DNO in 2024, coming from an executive position at Waldorf Production. Prior to this, he spent 16
years at Pareto Securities, where he was a senior partner in the firm’s investment banking division. He holds a finance
degree from the Norwegian School of Economics (NHH).
ELISABETH FEMSTEINEVIK
General Manager DNO North Sea
Ms. Femsteinevik joined DNO in 2019. She previously served in managerial roles at Faroe Petroleum and Equinor.
She holds a geoscience degree from the University of Oslo.
TONJE PARELI GORMLEY
General Counsel – Middle East
Ms. Gormley joined DNO in 2018. She was previously a partner in Arntzen de Besche law firm. She holds a law
degree from the University of Oslo and a diploma in law from the London Metropolitan University.
SAMEH HANNA
General Manager Kurdistan region of Iraq
Mr. Hanna joined DNO in 2022. He previously served as President of MI-SWACO worldwide and in various senior
roles at SLB. Mr. Hanna holds a Bachelor of Science in Electronics from Ain Shams University, Cairo, and has
completed management education programs at MIT Sloan, Lausanne School of Economics and Harvard University.
LINN HOEL
Chief Commercial Officer
Ms. Hoel joined DNO in 2024, coming from a position as corporate advisor with MP Energy Advisory. She previously
served in managerial roles at Wintershall Dea and Equinor. Ms. Hoel holds a law degree from the University of Oslo.
WIESKE PAULISSEN
Group Head of Exploration and Subsurface
Dr. Paulissen joined DNO in 2014. Dr. Paulissen previously worked as an exploration geoscientist for ExxonMobil.
She holds a PhD and a Master of Science Degree from the University of Delft in Petroleum Engineering and
Geosciences.
HAAKON SANDBORG
Chief Financial Officer
Mr. Sandborg joined DNO in 2001. In addition to his oil and gas experience, he has a background in banking,
including positions at DNB Bank. Mr. Sandborg holds a Master of Business Administration from the Norwegian School
of Economics (NHH).
GEIR ARNE SKAU
Chief Human Resources and Corporate Services Officer
Mr. Skau joined DNO in 2019. Mr. Skau previously served in the Norwegian Armed Forces and in various human
resources leadership roles at TechnipFMC. Mr. Skau was educated at the Norwegian Military Academy.
ERLING MOEN SYNNES
Chief Information Officer
Mr. Synnes joined DNO in 2019 having previously held managerial roles in various IT companies, most recently as
Vice President Global IT in PGS. Mr. Synnes has a Master of Science degree in Technical Cybernetics from the
Norwegian University of Science and Technology.
KJERSTI KAURIN
Corporate Counsel and Secretary
Ms. Kaurin joined DNO in 2019 with broad petroleum and corporate law experience from various law firms. She holds
a Master of Law degree from the University of Oslo and has attended the Advanced LLM Programme in Energy Law
offered by the Universities of Groningen, Oslo, Aberdeen and Copenhagen.
Board of Directors’ report
16
DNO
Parent company
The parent company, DNO ASA, reported a net profit of
USD 14.1 million, down from USD 86.7 million in 2023. Total
assets as of 31 December 2024 stood at USD 1,432.7 million,
up from USD 1,160.0 million at yearend 2023. The parent
company’s cash balance at yearend 2024 was USD 746.2
million, up from USD 461.2 million at yearend 2023. Total
liabilities increased from USD 572.3 million at yearend 2023 to
USD 936.5 million at yearend 2024
.
2024 was USD 496.2 million, down from USD 587.7 million in
2023. The equity ratio was 34.6 percent (50.7 percent at
yearend 2023).
Total dividend of USD 102.5 million was paid in 2024.
In
addition, a dividend of USD
26.9
million was accrued at
yearend 2024 in the
parent company accounts following board
approval in February 2025. The Board of Directors will
recommend that the shareholders approve the transfer of the
net profit of USD 14.1 million to retained earnings at the
forthcoming AGM.
Main events since yearend
On 6 February 2025, the Company announced that pursuant to
the authorization granted at the 2024 AGM, the Board of
Directors approved a dividend payment of NOK 0.3125 per
share. Payment of the dividend was made on 21 February
2025.
On 7 March 2025, the Company announced it had reached
agreement to acquire 100 percent of the shares of Sval Energi
Group AS from HitecVision for a cash consideration of USD 450
million based on an enterprise value of USD 1.6 billion. The
transaction includes non-operated interests in 16 producing
fields offshore Norway, with the largest assets being Nova,
Martin Linge, Kvitebjørn, Eldfisk, Maria, Symra and Ekofisk. The
effective date of the transaction is 1 January 2025, with
expected completion mid-year 2025, subject to customary
regulatory approvals from the Norwegian Ministry of Energy, the
Norwegian Ministry of Finance and competition authorities. The
acquisition will be financed with existing cash and other debt
financing facilities available to DNO.
On 14 March 2025, the Company announced the completion of
the placement of USD 600 million of new five-year senior
unsecured bonds with a coupon rate of 8.50 percent. The
proceeds were used to fully redeem DNO04, with the remainder
to be used for general corporate purposes.
Sustainability statement
The following section contains a sustainability statement as
required by the Norwegian Accounting Act, section 2-3. The
consolidated financial statements begin on page 46.
Bijan Mossavar-Rahmani
Executive Chairman
Gunnar Hirsti
Deputy Chairman
Elin Karfjell
Director
Anita Marie Hjerkinn Aarnæs
Director
Najmedin Meshkati
Director
Christopher Spencer
Managing Director
Board of Directors’ report
Annual Report and Accounts 2024
DNO
17
Sustainability statement
18
DNO
Sustainability statement
Table of Content
DNO Sustainability Statement 2024
1.
18
1.1 Basis for preparation 18
1.2 Governance 18
1.3 Strategy 19
1.4 IRO management 21
2.
22
2.1 Taxonomy disclosure 22
2.2 Climate change 23
2.3 Pollution 26
2.4 Resource use and circular economy 26
2.5 Reporting policies and methodology 27
3.
3.1 Own workforce 28
3.2 Working conditions 30
3.3 Health, safety and security 30
3.4 Equal treatment 32
3.5 Reporting policies and methodology 32
3.6 Workers in the value chain 33
3.7 Affected communities 34
4.
35
4.1 Business conduct 35
5.
1. General
1.1 Basis for preparation
DNO’s sustainability statement has been prepared in
accordance with the Norwegian Accounting Act and the
European Sustainability Reporting Standards, ESRS. It covers
DNO’s own operations and material upstream and
downstream value chain, as defined in section 1.3 Strategy.
DNO is a Norwegian oil and gas operator active in the Middle
East, the North Sea and West Africa. It holds interests in oil
and gas licenses in the Middle East and the North Sea as both
operator and non-operator, in West Africa its operations are
carried out through a joint venture and are equity accounted.
Unless otherwise stated, the method of consolidation is the
same as for the financial statements. However, for certain
metrics related to climate change and pollution, DNO has also
reported the partners’ share in licenses where it has
operational control of the activities.
Metrics were collected from DNO's business units through the
Company’s management reporting systems and were based
on direct measurements where practical. For certain metrics –
primarily those related to the value chain, where DNO has
limited access to reliable data – estimates were made using
secondary sources and industry averages. Where applicable,
we disclose information on measurement uncertainties and the
assumptions made by DNO.
1.2 Governance
The role of the administrative, management and
supervisory bodies
The Board of Directors consists of five members, two of whom
are women (40 percent). The Company’s largest shareholder,
Bijan Mossavar-Rahmani, serves as Executive Chairman and
all other members of the Board are independent (80 percent).
The Board has three advisory committees: audit; health,
safety, security and environment, HSSE; and remuneration.
Each committee consists of two members, each of whom are
members of the Board. The members include one woman and
one man, except for the remuneration committee, which
consists of two men. There are no executives or
representatives elected by the employees on the Board or any
of the advisory committees. Together, the Board of Directors
holds extensive industry and financial experience and uses
outside experts when needed to complement skills and
experience relevant to sustainability matters, among many
others. The Board and the advisory committees have oversight
of all material impacts, risks and opportunities (IROs) in the
Company.
The Company’s senior management, which consists of 11
members (six men, 55 percent, and five women, 45 percent),
is responsible for the overall conduct of DNO’s business
activities, including managing material IROs. DNO’s senior
management team has extensive experience within the oil and
gas industry and their area of responsibility. There is one
General Manager responsible for the Kurdistan region of Iraq
and one responsible for the North Sea region. This ensures
regional expertise within the senior management team. The
rest of the members are responsible for areas such as finance,
human resources, commercial and business development.
Regarding responsibilities for sustainability reporting and
targets, each member follows up their area of expertise and
responsibility, and the Managing Director has overall
responsibility. Senior management had meetings to discuss,
align and conclude on IROs of the Company. In addition,
specialists within the fields of environmental, social and
governance are employed to ensure proper knowledge and
internal controls within the Company. The Company is
exploring ways to further enhance the involvement of
management and the Board and its advisory committees in
setting and monitoring targets related to material IROs.
Sustainability matters addressed by the administrative,
management and supervisory bodies
Corporate and operational risks are reported to the Board of
Directors through the HSSE and audit committees on a
quarterly basis. The HSSE committee is, amongst other things,
responsible for overall supervision of the environmental
performance of the Company while the audit committee
focuses on regulatory and financial compliance as well as
sustainability reporting. Senior management and other senior
managers participate in the HSSE and audit committee
meetings. Senior management and employees present at the
HSSE committee include the Managing Director, the Board
Secretary and the General Managers and HSSE Managers of
DNO’s two business units (i.e., the Kurdistan region of Iraq
and the North Sea). Senior management and employees
present on the audit committee include the Managing Director,
Chief Financial Officer, Head of Finance, Head of Compliance,
Head of Internal Audit and the Board Secretary.
The HSSE committee is a forum in which the Company’s
HSSE performance is monitored, forward plans and strategies
Sustainability statement
Annual Report and Accounts 2024
DNO
19
related to HSSE are discussed and the Company's HSSE
policy is adjusted if necessary. The topics covered at these
meetings during the reporting period included greenhouse gas
(GHG), water and biodiversity related data. GHG emissions
related topics discussed in the committee included projects to
reduce the Company’s GHG emissions, GHG verification
standards and methodologies, the Company’s GHG emissions
targets and developments in the regulatory environment
applicable to DNO’s operations. During 2024, the audit
committee supervised the work associated with DNO’s first
double materiality process, which identified the material IROs,
as described in section 1.3 below.
DNO’s external auditor performs limited assurance procedures
over DNO’s sustainability report. The assurance activities
performed are described in the assurance statement.
Integration of sustainability-related performance in
incentive schemes
DNO’s guidelines on remuneration of senior personnel were
approved by the Company’s Annual General Meeting in May
2023. The main purpose of the Company’s remuneration
policy is to contribute to the implementation of the Company’s
overall business strategy in order to achieve the Company’s
long-term objectives and maximize value creation for the
Company and its shareholders by attracting, retaining and
motivating highly qualified employees.
Environmental performance, including GHG and climate
change related topics, is evaluated as part of the annual
appraisal and compensation process for the general managers
of the Company’s two business units, with the result of the
appraisal influencing their bonuses. The Chief Supply Chain
Officer also has performance targets tied to climate-related
engagement with suppliers. As environmental performance is
included in an overall judgement, the percentage of variable
remuneration due to sustainability factors cannot be specified.
The Company does not have other incentive schemes
specifically linked to sustainability matters.
Statement on due diligence
The mapping of the sustainability statement to the due
diligence process is included in Appendix 1.
Risk management and internal controls over sustainability
reporting
Our risk management and internal control systems cover all of
our operations to effectively identify, assess and mitigate risks.
The Company has implemented a structured approach to
sustainability reporting, with quarterly updates provided to the
audit and HSSE committees. Key risks related to sustainability
reporting include data completeness and accuracy, as well as
alignment with the reporting framework. Our internal control
procedures seek to address these risks by ensuring data
accuracy, reliability and compliance through clearly defined
roles and responsibilities, guidelines for data collection and
validation processes. In 2024, the focus has been on aligning
our reporting with ESRS. Our control framework and data
quality will continue to improve as we strengthen internal
control requirements in future reporting periods.
1.3 Strategy
Strategy, business model and value chain
DNO’s vision is to remain a leading, growth-oriented oil and
gas exploration and production company seeking to deliver
attractive returns to shareholders by finding and producing oil
and gas at low cost and at an acceptable level of risk in a
socially responsible and environmentally sensitive manner. To
achieve this vision, the Company’s strategic priorities with
respect to environmental, social and governance (ESG) factors
include:
●
best talent in the industry;
●
commitments and managing risks to the business;
●
operation; and
●
conserve resources and control emissions.
We seek to meet our commitments efficiently and
transparently, and expect the same of our host governments,
partners, employees, contractors and local communities. We
treat all stakeholders fairly and respectfully. DNO, Norway’s
oldest oil and gas company, is today an international one, with
more than one-half of our shares owned by non-Norwegians
and with a Board of Directors and senior management
representing five nationalities. Even so, we proudly fly the
Norwegian flag and carry our home country’s best practices
wherever we operate, including high health and safety
standards, minimizing our environmental footprint, active
engagement with local communities and zero tolerance for
corruption. We are dedicated to the health and safety of our
people, to the development of our host communities and to
responsible environmental practices. We adhere to high
standards of corporate governance and business conduct. We
foster an open, inclusive and diverse culture. We are
responsive to our employees’ needs. We want to build on
DNO’s success story, and we also want to help our employees
create their own success stories.
In 2024, DNO reported revenues of USD 667 million, of which
USD 171 million related to gas-oriented activities and USD 496
million related to oil-oriented activities. DNO has no revenue
from EU Taxonomy-aligned economic activities. At yearend
2024, DNO had a workforce of 1,070 employees, of which 55
were based at the Company’s headquarters in Oslo, 143 in
Stavanger and 872 were engaged across our international
operations, including our offices in Erbil (87 employees), Dubai
(71 employees), and Aberdeen (3 employees).
Our value chain includes the journey from material extraction
to the delivery of energy. DNO is dependent on inputs such as
raw materials for construction of drilling rigs, wellheads,
pipelines, separation units, storage tanks and processing
plants, among others, which we define as upstream activities.
In our own operations we utilize resources, including energy
and water, and occupy physical space for operations onshore
and offshore. The Company’s main outputs are oil and gas.
The downstream activities are defined as sale and distribution
of oil and gas produced through our own operations.
Partnerships and constructive relationships with our key
stakeholders in the value chain are crucial to our value
creation.
Interests and views of stakeholders
Wherever DNO operates, we make a concerted effort to create
mutually beneficial relationships, balancing stakeholders’
interests with our own as a 54-year-old public company with
some 16,000 shareholders. Our most relevant stakeholders
are shareholders and other investors, authorities, license
partners, banks, insurance companies, employees and local
communities. DNO engages with stakeholders in meetings
Sustainability statement
20
DNO
organized with each group. In addition, formal correspondence
as well as informal contact with stakeholders occur on an
almost daily basis. The Company uses such opportunities not
only to inform stakeholders of business performance, but also
to gain feedback needed to reflect each stakeholder’s interests
and views when identifying IROs. The main concerns of the
stakeholders are business performance and compliance with
regulations.
Material IROs and their interaction with strategy and
business model
Being an oil and gas operator with activities in the Middle East,
the North Sea and West Africa, a number of the identified
material IROs are closely linked to the Company’s strategy
and business model, while others are inherent to the nature
and geography of the business. Across the value chain,
different areas have been identified where the Company has
potential negative impacts on the environment and on society.
At the same time, DNO also has areas where the Company
contributes with positive impacts, particularly related to social
topics. Through the Double Materiality Assessment (DMA)
process, DNO has also identified some risks and opportunities.
DNO has assessed its resilience against the scenarios from
the International Energy Agency (IEA) World Energy Outlook
(WEO) report and is planning on conducting a full-scale
resilience analysis. This is described in more detail within
section 2.2 (Climate change).
In 2024, the current financial effects of our material risks and
opportunities have not led to adjustments in our financial
position. DNO does not see a significant risk of material
adjustments within the next annual reporting period related to
such ESG matters. DNO has not allocated any financial
resources to the strategy over the short, medium or long term.
However, the IROs listed below will be monitored for potential
impacts on strategy and decision-making.
The table below presents the IROs DNO identified and
assessed as material as a result of the DMA process. A brief
description, including the type of IRO, time horizon, where in
the value chain the IRO is relevant and DNO’s involvement
with the material IROs are included in the table. Information on
the relevant topics and how the Company responds to the
effects of the impacts and risks are included in the relevant
topical sections.
Material
ESRS
topics
Impact, risk or opportunity description
Type of
materiality
Part of the
value chain
Time
horizon
DNO’s
involvement with
the IRO
E1: Climate
change
Environmental impact on climate through direct GHG emissions from DNO oil and gas installations onshore
and offshore.
Negative Impact
Own operations
Short term
Caused by
GHGs released into the atmosphere as petroleum produced by DNO is consumed by end customers.
Negative Impact
Further use
Short term
Contribute
indirectly
Emissions from the supply chain, such as leased assets, purchased goods and services and waste
generation.
Negative Impact
Supply chain
Short term
Contribute
indirectly
GHG emissions from DNO’s transport of people, products and equipment.
Negative Impact
Own operations
Short term
Caused by
Supply chain GHG emissions from transportation of rigs, equipment and materials produced in different
parts of the world.
Negative Impact
Supply chain
Short term
Caused by
Supply chain GHG emissions from manufacturing and construction of installations, including steel, cement
and chemicals used.
Negative Impact
Supply chain
Short term
Contribute
indirectly
Regulations and policies, may be introduced at regional, national and global levels, adversely affecting
DNO’s financial results.
Risk
Own operations
Long term
N/A
As a first mover in reduced flaring emissions in Kurdistan, DNO may have an advantage in seeking new
opportunities.
Opportunity
Own operations
Short term
N/A
E2: Pollution
DNO’s own activities, as well as DNO-related activities up and down the value chain, may release pollutants
such as SOx, NOx, and NMVOC emissions.
Negative Impact
Supply chain,
own operations,
further use
Long term
Caused by
E5:
Circular
Economy
Raw materials are needed in the supply chain, including heavy equipment. Extraction and use may cause
environmental damage.
Negative Impact
Supply chain
Long term
Caused by
Use of raw materials, especially scarce minerals, in DNO’s own operations represents a cost risk as material
prices may be volatile.
Risk
Own operations
Medium term
N/A
Metals used in the supply chain may be scarce and use is associated with a negative environmental
impact.
Negative Impact
Supply chain
Medium term
Contribute
indirectly
Decommissioning activities offshore and onshore can result in generation and release of hazardous waste.
Negative Impact
Further use
Medium term
Contribute directly
Construction, repair, maintenance, drilling and decommissioning activities generate hazardous and non-
hazardous waste across the supply chain.
Negative Impact
Own operations
Short term
Caused by
S1: Own
workforce
DNO offers competitive compensation packages in its own operations.
Positive Impact
Own operations
Short term
Caused by
Due to the 24/7 nature of oil and gas operations and potentially high-consequence of some decisions, work-
induced stress may impact some employees’ health.
Negative Impact
Own operations
Short term
Caused by
DNO operates in an industry that is exposed to a potentially high risk of personal injuries. These injuries
range from minor to major.
Negative Impact
Own operations
Short term
Caused by
Security personnel at the field location and a layered security system increase the safety of field personnel.
Positive Impact
Own operations
Short term
Caused by
Due to the size and nature of DNO's operations, employees are offered a wide variety of tasks and
opportunities, including skill development.
Positive Impact
Own operations
Short term
Caused by
The industry and our areas of operations are male dominated. There is an inherent risk of gender disparity
in some of DNO’s operations.
Negative Impact
Own operations
Short term
Caused by
S2: Workers
in the value
chain
DNO’s supply chain is concentrated within industries with high risk of personal injuries and exposure
injuries.
Negative Impact
Supply chain,
further use
Short term
Contribute directly
DNO is dependent on sectors and industries that are traditionally male-dominated.
Negative Impact
Supply chain,
further use
Short term
Contribute directly
S3: Affected
communities
DNO uses local suppliers in Kurdistan when relevant and technically and commercially feasible, both within
its own operations and supply chain.
Positive Impact
Supply chain,
own operations
Short term
Caused by
The majority of staff in DNO’s own operations are local hires, supporting local economy and “social license
to operate”.
Positive Impact
Supply chain,
own operations
Short term
Caused by
DNO funds initiatives to benefit Kurdistan communities, such as construction of schools and roads.
Positive Impact
Own operations
Short term
Caused by
DNO uses land in Kurdistan that could alternatively have been used to directly benefit the local
communities.
Negative Impact
Own operations
Short term
Caused by
As a large employer in Kurdistan, DNO creates positive direct and indirect effects, positioning it to capture
further business.
Opportunity
Own operations
Medium term
N/A
Sustainability statement
Annual Report and Accounts 2024
DNO
21
G1:
Business
conduct
Non-compliance with rules and regulations regarding management of suppliers can lead to legal, financial
and reputational risks for DNO.
Risk
Supply chain,
own operations,
further use
Short term
N/A
Non-compliance with rules and regulations to protect whistleblowers can lead to legal, financial and
reputational risks for DNO.
Risk
Supply chain,
own operations,
further use
Short term
N/A
Non-compliance with rules and regulations regarding corruption can lead to legal, financial, and reputational
risks for DNO.
Risk
Supply chain,
own operations,
further use
Short term
N/A
1.4 IRO management
Description of the process to identify and assess material
IROs
During 2024, DNO conducted its first DMA, which among other
things, has identified sustainability matters that may
significantly impact DNO’s financial performance (i.e., financial
materiality) and the Company’s actual and potential impact on
people, the environment and society (i.e., impact materiality).
Identified matters are not limited to the Company’s operations
but also include supply chain activities and export, use and
end-of-life activities. The process encompasses all of DNO's
operations, including operated and non-operated assets.
DNO conducted the process in four phases following
guidelines from the European Financial Reporting Advisory
Group, EFRAG. The Company identified impacts using a
bottom-up approach, preparing a long list of IROs based on
DNO's value chain activities, business model and strategy.
DNO then connected the IROs to the relevant ESRS topics
and included entity-specific IROs relevant to the oil and gas
industry. After receiving feedback from stakeholders, we
adjusted the list accordingly. The views of stakeholders
collected during the DMA were presented to management and
the audit committee to support the assessment of the identified
IROs.
Participants across the Company have been involved in
identifying and selecting which IROs to report. This process
included DNO’s senior management led by the Managing
Director, supported by guidance and feedback from the
Board’s audit committee.
DNO’s four-phase methodology for identifying the IROs
Phase 1: Understand
In Phase 1, DNO's value chain and activities were mapped in
a sustainability context. The value chain was divided into main
activities, each containing various IROs within all ESG topics.
Phase 2: Identity
In Phase 2, actual and potential IROs across DNO's entire
value chain and locations were identified leveraging
knowledge and information from DNO’s previous sustainability
work, as well as dialogue with internal and external
stakeholders.
Phase 3: Evaluate
In Phase 3, we evaluated and scored the identified IROs
based on consequence and likelihood, following the
methodology outlined in the ESRS. Each score determined
whether the IRO is of low, medium or high significance.
We based the scoring system on our enterprise risk
management (ERM) system, but this was conducted as a
separate exercise independent of other risk assessments.
We assessed the score of an impact by averaging effect, scale
and irreversibility, which was multiplied by likelihood. We
evaluated the significance of risk or opportunity by selecting
and qualitatively scoring the appropriate category for
consequence (reputational, resource dependency or financial
effect) and multiplying it by the likelihood of occurrence. Both
consequence and likelihood had numerical scales from one to
five. For actual negative impacts, materiality is based on the
severity of the impact. For human rights related impacts, the
severity of the impact was weighted higher than the likelihood.
Phase 4: Decide
In Phase 4, we established the threshold for material topics
using a matrix. This matrix identified IROs with high
consequences and low likelihood scores as material and IROs
with high likelihood and low consequence as immaterial, which
resulted in a more nuanced and precise analysis. The IROs
were discussed with and approved by the senior management
and the audit committee.
Additional topical IRO process disclosures
Climate change
Identifying IROs related to climate change followed the four-
phase methodology described above. DNO has assessed its
value chain to ensure all material activities related to GHG
emissions and identified IROs have been covered, including
upstream and downstream emissions. DNO has a well-
established process for identifying and assessing climate-
related risks based on a Risk Assessment Matrix (RAM), which
is included in our company-wide risk and opportunity
assessment process. Our assessments include climate-related
physical risk and transitional risk. The assessment is
conducted quarterly based on a bottom-up risk identification,
assessment and review process. Both risks and opportunities
associated with current and future emissions and climate
change are identified and analyzed, following which relevant
mitigations are put in place. The results and insights from
these assessments were integrated into our work in
developing the DMA.
In addition, DNO has conducted a climate-related sensitivity
analysis to assess the financial resilience of our portfolio under
the three climate-focused scenarios from the IEA’s WEO
report, namely the IEA’s Net Zero 2050, Announced Pledges
and Stated Policies scenarios.
Pollution
Identifying IROs related to pollution followed the same four-
phase methodology as described above. To ensure that all
pollution-related IROs were identified, DNO assessed its site
locations related to business activities in its operations and in
the value chain. No specific consultations were conducted with
affected communities related to pollution IROs.
Water and marine resources
Identifying IROs related to water and marine resources
followed the same four-phase methodology as described
above. To ensure that all water and marine resources-related
IROs were identified, DNO assessed its assets and activities
related to business activities in its operations and in the value
chain. No specific consultations were conducted with affected
communities related to water and marine resources IROs.
Sustainability statement
22
DNO
Biodiversity and ecosystems
Our process of identifying risks and opportunities related to
biodiversity and ecosystems followed the four-phase
methodology described previously. DNO has not identified or
assessed any systemic biodiversity or ecosystem risks related
to its business model. No specific consultations were
conducted with affected communities related to biodiversity
and ecosystem IROs.
To ensure that all biodiversity and ecosystem-related IROs
were identified, DNO assessed the site locations related to
business activities in its own operations. We have not
evaluated specific sites and locations related to biodiversity
and ecosystems in our value chain. In our business model, we
have not identified any material dependencies related to
biodiversity and ecosystems. DNO does not have sites located
in or near biodiversity-sensitive areas, nor conduct activities in
protected areas that lead to the deterioration of natural
habitats. Furthermore, all operations with potential impacts on
biodiversity are compliant with applicable regulations and
follow relevant industry best practices.
Resource use and circular economy
The identification of IROs related to resource use and circular
economy followed the four-phase methodology described
previously. No consultations, besides the general stakeholder
engagement described in the methodology, were conducted
related to resource use and circular economy.
Business conduct
The identification of IROs related to business conduct followed
the four-phase methodology described previously. In order to
identify IROs related to our operations, we assessed our main
locations, suppliers and activities where we do transactions
and have operations to identify potential heightened IROs.
Based on this information, we have used nationally and
internationally recognized guidelines to identify structurally
heightened risks.
Disclosure requirements in ESRS covered by the
sustainability statement
Based on the results of the DMA, DNO assessed the
materiality of information to determine which disclosure
requirements under the ESRS were relevant to our IROs. First,
we included the mandatory disclosure requirements related to
policy, action and targets for all material ESRS topics. Second,
we reviewed the list of disclosure requirements and assessed
which ones referred to relevant elements in our material IROs.
If we found no such information, we marked the disclosure
requirement as not relevant. The list of disclosure
requirements is included in the Appendix to the sustainability
statement.
2. Environment
2.1 Taxonomy disclosure
The EU Taxonomy Regulation, which came into effect in
Norway on 1 January 2023, aims to promote environmentally
sustainable economic activities within the European Economic
Area (EEA) by providing a standardized framework for
classifying activities as environmentally sustainable. The
regulation sets specific criteria and thresholds that companies
must meet to qualify their activities as environmentally
sustainable.
EU Taxonomy eligibility and alignment assessment
An economic activity qualifies for taxonomy eligibility when it is
included with the activity description in the EU Taxonomy
Regulation. To determine eligible activities within DNO, we
reviewed the Company’s operations, products and
sustainability initiatives, comparing them to the descriptions of
economic activities outlined in the EU Taxonomy Regulation.
It was determined that the Company's activities, which are all
related to the core activity of extracting and selling oil and gas,
do not meet the eligibility criteria under the EU Taxonomy
Regulation.
As DNO does not have any eligible activities, it does not have
any activities that meet the alignment criteria under the EU
Taxonomy Regulation.
EU Taxonomy KPIs
The mandatory key performance indicators (KPIs) comprise
the portion of taxonomy eligible and aligned economic
activities for the total turnover (revenue), capital expenditures
(capex) and operational expenditures (opex) in accordance
with the EU Taxonomy Regulation. KPIs presented below are
derived from the figures reported in DNO’s consolidated
accounts prepared in accordance with IFRS as adopted by the
EU.
The components of the financial KPIs can be reconciled with
the consolidated accounts as follows:
●
consolidated accounts).
●
equipment and Intangible assets (see Note 9 and Note
10). Additions to Exploration assets recognized in
accordance with IFRS 6 are excluded as these are not
mentioned in the EU Taxonomy Regulation.
●
and consists of maintenance, other direct expenditure
related to day-to-day servicing of assets and short-term
leases. These items are included in Cost of goods sold in
the consolidated income statement.
2024
Turnover
CAPEX
OPEX
USD
%
USD
%
USD
%
Environmentally sustainable
(taxonomy-aligned) activities
-
-
-
-
-
-
Taxonomy-eligible, but not
taxonomy-aligned activities
-
-
-
-
-
-
Taxonomy-non-eligible
activities
666.7
100.0
226.4
100.0
58.6
100.0
Total
666.7
226.4
58.6
2023
Turnover
CAPEX
OPEX
USD
%
USD
%
USD
%
Environmentally sustainable
(taxonomy-aligned) activities
-
-
-
-
-
-
Taxonomy-eligible, but not
taxonomy-aligned activities
-
-
-
-
-
-
Taxonomy-non-eligible
activities
667.5
100.0
181.9
100.0
44.6
100.0
Total
667.5
181.9
44.6
In 2024, there was no significant change from the previous
year as 100 percent of turnover, capex and opex in 2023 were
also reported as taxonomy non-eligible activities.
The disclosures in accordance with Annex II to the EU
Taxonomy Regulation and the disclosure in accordance with
Annex XII to the EU Complementary Climate Delegated Act for
Sustainability statement
Annual Report and Accounts 2024
DNO
23
nuclear energy and fossil gas activities is included in Appendix
2 and 3.
2.2 Climate change
Transition plan for climate mitigation
Oil and gas are needed in the energy mix for the foreseeable
future. As a responsible producer, DNO is dedicated to
minimizing its GHG emissions from production. We actively
explore ways to reduce the carbon footprint from our
operations and our approach is guided by the principles of
responsible and sustainable oil and gas operations, which
prioritize safety, environmental protection and public health.
The majority of GHG emissions relating to our activities stem
from Scope 3 emissions, more specifically related to the use of
sold products (i.e., combustion of oil and gas produced by
DNO and associated products by end users). Abatement of
these emissions is beyond DNO’s direct control. Given the
nature of the industry, we do not have a net zero by 2050
transition plan, and currently we have no plans for adopting
such a plan. However, it should be noted that all the licenses
under which we hold our current oil and gas assets will have
expired by 2050, as such there will be no production from the
current portfolio by 2050. We continue to monitor the
regulatory environment and will adjust our approach, if
needed.
Material IROs and interaction with strategy and business
model
The DMA identified our material impacts related to climate
change. The Company's industrial processes, including the
production, processing and transportation of oil and gas, result
in direct GHG emissions from onshore and offshore
installations. Additionally, the transportation, processing,
refining and end use of our products result in the release of
CO
2
supply chain, including purchased goods and services and
waste generation, also contributes to indirect GHG emissions.
DNO has already implemented multiple projects to reduce our
own carbon footprint (i.e., Scope 1) and continues to actively
work on maturing new initiatives and opportunities.
We recognize the importance of managing our climate-related
risks and opportunities, and we have a process for identifying
and assessing risks based on a Risk Assessment Matrix. We
conduct a bottom-up risk identification, assessment and review
process on a quarterly basis. We assign all risks and
opportunities to competent owners, monitor our progress and
report substantive risks to the HSSE and audit committees.
Resilience analysis
DNO has assessed its resilience against the scenarios from
the IEA’s WEO report (i.e., the Net Zero Emissions Scenario
by 2050, the Announced Pledges Scenario and the Stated
Policies Scenario). Oil and gas price assumptions for the
scenarios have been provided by the IEA for the years 2030
and 2050 in 2023 real terms. For the sensitivity calculation, a
linear development between average actual prices for 2024
and IEA 2030, as well as between IEA 2030 and IEA 2050 has
been applied. We assessed potential impairments when
applying the price assumptions in the relevant WEO scenarios.
The Announced Pledges Scenario cuts DNO’s 2024 net profit
by USD 3.7 million, while the Stated Policies Scenario has a
slight positive impact. The Net Zero by 2050 scenario, with
IEA’s 2030 price forecast of USD 44/bbl oil and USD
4.4/MMBtu gas, reduces net profit by USD 125.2 million. DNO
is aware of the additional requirement under ESRS to perform
a comprehensive resilience analysis. The risk assessment
phase of this analysis is in progress, and we are dedicated to
prioritizing conducting the analysis going forward.
Physical climate risk
DNO's operations may be exposed to physical climate risks
including extreme weather such as flooding of facilities leading
to interruptions to production processes, infrastructure failures
and potential accidents. To understand and mitigate these
risks, DNO has integrated climate-related physical risk
assessment in its ongoing company-wide risk assessment
process. This is reviewed at least quarterly by the senior
management and the Board of Directors. When relevant, these
risk assessments involve engagement with local teams which
provide insights based on operational experience and monitor
the trends in the local environment, such as seasonal
variations in river flows. While DNO continues to refine its
approach, these assessments help inform risk management
strategies, operational preparedness and mitigation measures
to ensure business continuity and asset resilience. Time
horizons considered in these assessments are short-term (less
than a year), medium term (one to five years) and long term
(five to 30 years). DNO has not used any specific global
climate change scenarios for these risks assessments.
Transitional risk and opportunities
Climate change concerns may prompt environmental and
regulatory actions to limit the use of fossil fuels, thereby
affecting future supply and demand for oil and gas and the
pricing of these commodities. In parallel, investor appetite for
oil and gas investments both within equity and debt markets
may be reduced, inhibiting the Group’s ability to obtain
funding. This risk is continuously assessed by DNO. DNO has
used the IEA’s WEO scenarios to assess potential financial
impacts of climate policies on its portfolio. These scenarios
consider potential changes in oil and gas prices under
macroeconomic conditions driven by climate change and the
potential introduction of carbon pricing in Kurdistan, in addition
to potential increases in carbon taxes and fees in the North
Sea. Increasing concerns about adverse climate impact could
also reduce the attractiveness of oil and gas companies
(including DNO) as employers.
With relatively high CO
2
high CO
2
pricing. In part driven by expected increases in such fees,
several oil and gas installations are already powered by
electricity from shore in Norway. Further electrification
initiatives are underway and DNO actively engages in
discussions that are of relevance to its licenses. In Norway,
future transition opportunities may involve using existing
infrastructure to support offshore wind developments, CO
2
storage and blue hydrogen.
Policies related to climate change
DNO has implemented a corporate policy for GHG emissions
to mitigate impacts and risks related to climate change due to
its operations. This policy applies across the Company and
establishes the vision and minimum requirements for
managing such emissions. It requires all business units to
identify emissions reduction projects, including energy
efficiency, and to include GHG impacts / reductions in
investment proposals. The Managing Director is the most
senior executive responsible for implementing the policy
across the Company, and the business unit General Managers
are responsible for the implementation within their respective
business units. The policy is designed to be a high-level
guiding document and does not specifically address each IRO
Sustainability statement
24
DNO
in detail. The policy is available in DNO’s business
management system.
DNO, as a signatory to the Aiming for Zero Methane
Emissions Initiative, an oil and gas industry pledge coordinated
by the Oil and Gas Climate Initiative (OGCI), is committed to
reaching near zero methane emissions from the Company’s
operated oil and gas assets by 2030 and is actively working
with partners in its non-operated assets to achieve the same.
DNO is also a member of the Methane Guiding Principles
(MGP), an industry coalition to reduce methane emissions
across the global oil and gas supply chain. Through its
membership in MGP, DNO is working to continually reduce its
own methane emissions, advance strong performance across
the oil and gas value chain, improve accuracy and
transparency of methane emissions data, and advocate sound
policy and regulations on methane emissions.
DNO reports on its strategy on and performance to mitigate
GHG emissions annually to the carbon disclosure project
(CDP), a widely used platform for reporting on climate change
related topics. DNO in 2024 received a “B” rating for the sixth
consecutive year for its climate change disclosures to CDP.
Actions and resources in relation to climate change
policies
Emission Reduction Activities
At its Tawke license, the Company operates the first and only
associated gas capture and injection project in Kurdistan,
which has been operational since 2020. The project
contributed to avoidance of GHG emissions, through capturing
and injecting associated gas that would otherwise have been
flared. The project did not incur significant capex during 2024
while opex is considered part of the ongoing running costs.
DNO is actively exploring and pursuing initiatives and projects
to reduce its GHG emissions in Kurdistan. We have identified
and are considering implementing a series of projects to utilize
otherwise-flared associated gas for onsite electricity and
process heat generation at the Tawke license.
In 2024, DNO increased its renewable energy generation for
onsite use at the Tawke license. At yearend 2024, the capacity
of DNO’s photovoltaic (PV) solar panels totaled 200 kilowatts
(kW). The project did not incur significant capex during 2024
while opex is considered part of the ongoing running costs.
To reduce fugitive methane emissions from its operations,
DNO has an active Leak Detection and Repair (LDAR)
program at its largest asset, the Tawke license. This project
did not incur significant capex or opex in 2024.
These activities are under ESRS considered emission
avoidance and not reductions.
In the North Sea, as a non-operating partner in most of our
producing fields, DNO takes part in industry initiatives to lower
emissions, such as exploring ways to power offshore
installations with offshore wind farms. The Company has also
focused most of its exploration activities within tieback
distance of hubs that are already electrified with power from
shore, or for which electrification is planned, which will reduce
the environmental impact of new discoveries. DNO’s older
fields, which are powered with gas turbines and diesel
generators all have a relatively short remaining lifetime, hence
no electrification projects are planned.
In Norway, DNO was a member of the LowEmission research
center in 2024, through which it contributed to research and
development of technologies and solutions to reduce GHG
emissions on the NCS. LowEmission is coordinated by
SINTEF Energy Research and features a consortium of world-
leading Norwegian and international industrial entities, as well
as globally recognized universities and research institutes. As
the relevant scope widens to include emissions from supply
vessels and non-operated assets, access to the LowEmission
research center and development of new technology is
expected to add value to DNO. Based on identified business
needs and national petroleum strategies, DNO in Norway has
put in place a technology strategy to support, develop and
employ technologies that may improve value creation and
reduce environmental footprint, specifically targeting GHG
emissions.
Metrics and targets
DNO has set an ambition for the Company’s GHG emission
intensity (i.e., Scope 1 and Scope 2, operational control) to be
well below the average of the global upstream industry within
the relevant time horizon for the next five years. This ambition
and our 2024 performance (i.e., 12.0 kgCO
2
e/boe) compare
favorably to the target set by a group of 12 of the world’s
largest oil and gas companies comprising the OGCI to reduce
the average intensity of their upstream operations to 17
kgCO
2
e/boe by 2025 from a collective baseline of 23
kgCO
2
e/boe in 2017. DNO does not have a target for reducing
its absolute GHG emissions (majority of which is CO
2
).
On targets and ambitions to reduce its methane emissions,
DNO has also set a policy of no routine venting across all its
operated assets. As a signatory to the Aiming for Zero
Methane Emissions Initiative, DNO has set an ambition to
reach near-zero methane emissions from its operated oil and
gas assets by 2030 and actively works with its partners in its
non-operated assets to achieve the same. DNO’s total
methane emissions (Scope 1) in 2024 from its operated assets
were 16,664 tCO
2
e.
Our GHG reduction targets do not meet the requirements of
ESRS for science-based targets and are not compatible with
limiting global warming to 1.5 degree Celsius.
Sustainability statement
Annual Report and Accounts 2024
DNO
25
Energy consumption
Energy consumption and mix
Unit
2024
Fuel consumption from nuclear
MWh
-
Fuel consumption from coal and coal products
MWh
-
Fuel consumption from crude oil and petroleum products
MWh
294,505
Fuel consumption from natural gas*
MWh
296,749
Fuel consumption from other fossil sources
MWh
-
Consumption of purchased or acquired electricity, heat, steam, and
cooling from fossil sources
MWh
584
Total fossil energy consumption
MWh
591,838
Share of fossil sources in total energy consumption
percent
99.8
Fuel consumption for renewable sources, including biomass (also
comprising renewable hydrogen, etc.)
MWh
-
Consumption of purchased or acquired electricity, heat, steam, and
cooling from renewable sources
MWh
1,064
The consumption of self-generated non-fuel renewable energy
MWh
17
Total renewable energy consumption
MWh
1,081
Share of renewable sources in total energy consumption
percent
0.2
Total energy consumption
MWh
592,919
*Category includes use of associated gas
Energy consumption is reported based on financial control (equity share)
All of the total energy consumption is from activities in high climate impact sectors
Reconciliation to net revenue in financial statements
Unit
2024
Net revenue used to calculate energy intensity
USD million
666.8
Net revenue (other)
USD million
-
Total net revenue (in Financial Statements)
USD million
666.8
Energy intensity
Unit
2024
Energy intensity
MWh/USD million
889.2
Energy intensity is reported based on financial control (equity share)
All DNO activities and emissions are in the oil and gas
upstream sector, which is defined as a high impact sector.
Reporting policies and methodology are disclosed in section
2.5.
Scopes 1, 2, 3 and total GHG emissions
Financial control (equity share)
Partners' share of DNO-operated assets
Unit
Base year
2024
Base year
2024
Scope 1 GHG emissions
Scope 1 GHG emissions
tCO2e
358,860
358,860
90,319
90,319
Percentage of Scope 1 GHG emissions from regulated emission trading schemes
percent
23%
23%
0%
0%
Scope 2 GHG emissions
Location-based Scope 2 GHG emissions
tCO2e
374
374
-
-
Market-based Scope 2 GHG emissions
tCO2e
951
951
-
-
Scope 3 GHG emissions by category
Total indirect (Scope 3) GHG emissions
tCO2e
12,770,798
12,770,798
26,791
26,791
Purchased goods and services
1
tCO2e
82,476
82,476
16,907
16,907
Capital goods
2
tCO2e
11,872
11,872
3,790
3,790
Fuel and energy-related activities (not included in Scope1 or Scope 2)
3
tCO2e
6,227
6,227
3,816
3,816
Upstream transportation and distribution
4
tCO2e
9,276
9,276
2,096
2,096
Waste generated in operations
5
tCO2e
584
584
182
182
Business travel
6
tCO2e
1,701
1,701
-
-
Employee commuting
7
tCO2e
781
781
-
-
Upstream leased assets*
8
tCO2e
-
-
Downstream transportation
9
tCO2e
175,749
175,749
-
-
Processing of sold products
10
tCO2e
1,090,590
1,090,590
-
-
Use of sold products
11
tCO2e
11,383,373
11,383,373
-
-
End-of-life treatment of sold products
12
tCO2e
83
83
-
-
Downstream leased assets*
13
tCO2e
-
-
Franchises*
14
tCO2e
-
-
Investments
15
tCO2e
8,086
8,086
-
-
Total GHG emissions
Total GHG emissions (location-based)
tCO2e
13,130,031
13,130,031
117,110
117,110
Total GHG emissions (market-based)
tCO2e
13,130,608
13,130,608
117,110
117,110
*Scope 3 GHG emissions in these categories are assessed not to be applicable in 2024
DNO does not have any specific milestones or targets related
to its absolute GHG emissions, therefore they are excluded
from the table. The base year is the first year of reporting
under ESRS in 2024. DNO did not have any contractual
instruments applicable to Scope 2 GHG emissions in 2024.
DNO reports its equity share of Scopes 1, 2 and 3 GHG
emissions across both operated and non-operated oil and gas
assets. Additionally, for assets where DNO is the operator,
share of partners from Scopes 1, 2 and 3 GHG emissions are
disclosed in the table above. All non-operated assets are in the
North Sea, and emission data for these assets are compiled
based on figures provided by the respective operators. In rare
cases where the operator does not provide all the required
data, we have applied best available approximation techniques
to estimate the emissions.
GHG intensity per net revenue
Unit
2024
Total GHG emissions (location-based) per net revenue
tCO2e/USD thousand
19.7
Total GHG emissions (market-based) per net revenue
tCO2e/USD thousand
19.7
Total GHG emissions include reported Scopes 1, 2 and 3 based on financial control
(equity share)
Reconciliation to net revenue in financial statements
Unit
2024
Net revenue used to calculate GHG intensity
USD thousand
666,764
Net revenue (other)
USD thousand
-
Total net revenue (in financial statements)
USD thousand
666,764
Reporting policies and methodology are disclosed in section
2.5.
Internal carbon pricing
In addition to paying applicable CO
2
partnerships in Norway and the UK may be required to buy
CO
2
and the UK ETS, respectively. We take into account current
Sustainability statement
26
DNO
and future carbon pricing when assessing all projects and
when planning for current and future field developments and
operations. The carbon price is evaluated annually.
GHG removals and GHG mitigation projects financed
through carbon credits
DNO did not have any GHG removal or mitigation projects
financed through carbon credits in 2024.
2.3 Pollution
DNO has identified material impacts due to environmental
pollutants through its DMA, including the release of air
pollutants such as sulfur oxides (SOx), nitrogen oxides (NOx),
non-methane volatile organic compounds (NMVOC) and
particulate matter (PM) from activities conducted across the
Company’s value chain, including its own activities. These
pollutants can impact air quality and have potential effects on
human health and the environment. The final use of petroleum
products also contributes to air pollution. Immediate impacts
include air quality degradation and adverse health effects,
while long-term impacts can involve broader environmental
and biodiversity consequences. The current and anticipated
effects of these material impacts are therefore important for
DNO’s business model, value chain, strategy and decision-
making.
Overall process to remediate negative impacts from
pollution
DNO has a corporate policy to reduce pollution which requires
all business units to identify potential impacts on the
environment (i.e. soil, air and water pollution). In addition to
policies and procedures to avoid and remediate polluting the
environment, DNO has pioneered flare reduction measures in
Kurdistan through building associated gas capture and
injection facilities (as also described under the section on
climate change), which avoided flaring of 7,390 million
standard cubic feet of associated gas in 2024 and associated
air pollution (i.e. SOx, NOx, NMVOC and PM). In the North
Sea, routine flaring has long been prohibited and the
governments in both Norway and the UK have strict
regulations on minimizing and reporting on relevant
environmental pollutants and remediate any incidents. Further,
in both Norway and the UK there are strict limitations on
discharge of chemicals, produced water and oil contaminated
solids (i.e. cuttings from drilling of wells).
Policies related to pollution
As part of DNO’s efforts to address the material impacts
related to pollution, the Company maintains commitments to
minimizing pollution effects on the environment wherever it
operates. The HSSE policy states that we commit to promoting
the reduction of emissions and pollution from our operations
and are described in more detail within G1 Business Conduct
and S1 Own workforce, respectively. The policy supports the
work on reducing the negative impacts. It is designed to be a
high-level guiding document and does as such not specifically
address each IRO in detail. DNO does not have specific
policies at the group level focused on mitigating air, water and
soil pollution although at the business unit level, tailored
policies or procedures ensure environmental pollutants are
minimized and any environmental pollutions are remediated.
Actions and resources related to pollution
DNO seeks to continue to be a leading company in associated
gas flaring (and associated air pollution) reduction measures in
Kurdistan, having built and been operating the first associated
gas capture and injection facilities in the region at the Tawke
license. These facilities capture and reinject associated gas,
leading to significant avoidance of air emissions. DNO’s
project involved the installation of three gas engines that today
power large parts of the Peshkabir field, thus greatly reducing
the reliance on diesel generators, which cause local air
pollution (mainly SOx and NOx) and noise.
Metrics and targets
In our ongoing efforts to mitigate negative impacts of our
activities related to environmental pollution, DNO will consider
developing timebound and outcome-oriented targets related to
pollution. While we focus on GHG emission reductions, we are
working on the best way to also reduce other forms of
pollution. We have not implemented other ways of tracking the
effectiveness of our policies and actions. As 2024 is the first
year of reporting and our base year, we do not disclose
change over time.
Pollution of air
To manage our environmental impact, DNO is prioritizing the
collection and analysis of data on pollution to air.
Pollutant (tonnes)
Financial
control
(equity share)
Operational
control
(100 percent)
Nitrogen oxides (NOx)
2,343
2,484
Sulfur oxides (SOx)
1,088
1,469
Non-methane volatile organic compounds (NMVOC)
569
605
Particulate matter (PM)
89
93
The numbers presented apply for 2024
Reporting policies and methodology are disclosed in section
2.5.
2.4 Resource use and circular economy
By its nature, the Company’s business model is resource
intensive given that we extract resources (i.e. oil and gas) from
the ground and rely on raw materials needed to build the
infrastructure and produce the consumables needed for oil and
gas extraction and processing.
Through the DMA, DNO identified four material negative
impacts– as well as a risk – related to resource use and
circular economy. The impacts and risk related to resource
inflows are related primarily to the use of raw materials both in
the supply chain and within the Company’s own operations,
including scarce metals and minerals, equipment for extraction
and the extraction process itself. In relation to waste, DNO has
identified negative impacts from hazardous and non-
hazardous waste generated through drilling, production and
within the supply chain, as well as from decommissioning
activities. The following section describes how DNO is working
to prevent, minimize and mitigate these negative impacts and
risks.
Policies related to resource use and circular economy
As part of DNO’s efforts to address the material impacts
related to resource use and the circular economy, the
Company maintains commitments to optimize resource use
wherever it operates. The Company’s Code of Conduct sets
out the commitment to minimize any negative environmental
impact from our operations and to prevent unplanned
emissions. Additionally, the Company’s HSSE policy states
that we commit to minimizing undesirable effects on the
environment and biodiversity resulting from our activities.
These policies apply across the DNO group and are described
in more detail within G1 Business Conduct and S1 Own
Sustainability statement
Annual Report and Accounts 2024
DNO
27
workforce, respectively. They are designed to be high-level
guiding documents and as such do not specifically address
each IRO in detail.
DNO has not yet adopted specific policies related to resource
use and the circular economy, but the Company recognizes
the importance of these areas and is actively exploring ways to
integrate them into our business strategy.
Actions and resources related resources use and circular
economy
In the North Sea, during 2024, DNO, as operator, oversaw the
continuation of the dismantling and recycling activities onshore
for the gas platforms from the Schooner and Ketch fields in the
UK, following the completion of all offshore decommissioning
work in previous years. A total of USD 1 million was spent on
these activities during the year. DNO continues to follow up on
non-operated projects in the North Sea, with special attention
to the recycling potential of Ula area assets as plans are being
developed to decommission the host platform and satellites
due to declining production.
In Kurdistan, DNO has a long tradition of reusing equipment,
going back to the first processing facility at the Tawke field
which was bought second-hand nearly 20 years ago. The
emphasis on reuse has increased with the cost saving
initiatives in recent years, which continued in 2024 and are
expected to be further strengthened in the coming years. For
example, in 2024 DNO moved a redundant but well-preserved
separator from the Central Processing Facility at Tawke field to
be used for infield separation close to the wellheads in the
eastern part of the field.
Metrics and targets
DNO is actively working on understanding and managing its
resource inflows and resource outflows more effectively. While
we have not yet adopted specific targets or related metrics in
these areas, we are exploring ways to establish measurable
goals to enhance our resource management practices.
DNO is dependent on inputs such as raw material (mainly
steel and cement) for construction of drilling rigs, wellheads,
pipelines, separation units, storage tanks and processing
plants. We utilize resources including energy and water and
occupy physical space for operations onshore and offshore.
For resource inflow, DNO’s total steel and cement
consumption across its portfolio (financial control) in 2024,
which are deemed to be the majority of raw materials used in
DNO’s assets, is estimated at 44,031 tonnes. Steel and
cement are used primarily in the construction of facilities and
infrastructure in our operations, such as oil and gas processing
units as well as drilling activities (wellhead equipment such as
Christmas trees and wellbore casings in addition to the
construction of well sites). Other key inflows include
consumables such as chemicals needed for production and
processing of oil and gas, as well as water.
DNO seeks to handle and manage waste consistent with local
regulations and relevant international standards, including to
ensure appropriate levels of waste segregation and, where
possible, reuse. Drill cuttings represent the majority of
hazardous waste generated in our Kurdistan operations and
are stored onsite for periodic remediation. The majority of
waste generated in our North Sea operations over the last
couple years relates to decommissioning activities in our
operated assets, in addition to ongoing drilling operations. We
ensure that our operations not only comply with regulatory
requirements but also advance our resource use. This includes
ongoing efforts to mitigate negative impacts, enhance resource
efficiency and explore innovative solutions that support a
circular economy.
Resource inflow
Unit
2024
Material use*
tonnes
44,031
*Represents estimated amount of cement and steel
Resource outflow
Unit
2024
Waste generated
Hazardous waste
tonnes
8,372
Non-Hazardous waste
tonnes
791
Total waste generated
tonnes
9,163
Waste recovered (recycled/ reused)
Hazardous waste
tonnes
2,628
Non-Hazardous waste
tonnes
116
Total waste recovered
tonnes
2,744
Waste non-recovered*
Hazardous waste
tonnes
5,745
Non-Hazardous waste
tonnes
675
Total waste non-recovered
tonnes
6,419
*This entry aggregates all disposal streams, including incineration and landfill
Resource inflow and resource outflow is reported based on financial control (equity share)
Reporting policies and methodology are disclosed in section
2.5.
2.5 Reporting policies and methodology
Reported metric*
Policy, methodology and assumptions
Energy
consumption
Fuel
consumption
Fuel consumption values are calculated based on volume
of fuels consumed and assumed heating values for each
fuel or values reported directly by the operators. Self-
generated non-fuel renewable energy represents
estimated onsite electricity generation from solar PV
panels in Tawke license. Purchased electricity from
renewable sources is estimated based on national
electricity supply averages (location-based methodology).
GHG
emissions
Scope 1
DNO quantifies Scope 1 emissions from its operated
assets based on requirements and guidelines of the widely
used International Petroleum Industry Environmental
Conservation Association’s (IPIECA) “Petroleum industry
guidelines for reporting greenhouse gas emissions” and
Alberta Government’s “greenhouse gas quantification
methodologies” and are mainly based on onsite
measurements. Scopes 1 emissions from non-operated
assets are based on data reported by operators). DNO has
made best estimates when data are unavailable.
GHG
emissions
Scope 2
Scope 2 emissions are quantified based on actual (and
when unavailable, estimates are used) electricity
purchased and used in DNO’s operations and offices and
estimated GHG intensity of the electricity grid in the
corresponding countries, or actual intensities disclosed by
electricity providers when available.
GHG
emissions
Scope 3
Scope 3 emissions quantification is based on the UK
Government GHG Conversion Factors for Company
Reporting 2024, IPIECA Estimating Petroleum Industry
Value Chain Greenhouse Gas Emissions (2016), Stanford
University’s OPGEE tool, University of Calgary’s PRELIM
tool and American Petroleum Institute’s (API)
Compendium of Greenhouse Gas Emissions
Methodologies for the Natural Gas and Oil Industry.
Scopes 3 emissions are inherently less reliable due to
DNO’s limited control and visibly over the entire value
chain.
Pollution
Pollution of
Air
Quantification of air pollution is done using emission
factors published in the UK Government’s National
Atmospheric Emissions Inventory (NAEI) and gas
composition analyses when relevant and actual amount of
fuels used. Operators’ data are used when available.
Resource
inflow
Total steel
and cement
consumption
Spend-based method is used to estimate mass of steel
parts and cement used across DNO’s portfolio (based on
2024 capital cost and operating cost).
Resource
outflow
Waste
generated
Mass of waste generated is calculated based on actual
measurements and estimates of different waste streams
(hazardous and not-hazardous waste). Operators’ data are
used when available.
Resource
outflow
Waste
recovered
Mass of waste recovered (reused and recycled) by DNO or
by third-parties (when reliable data are available) is
reported based on actual measurements and estimates of
different waste streams (Hazardous and non-hazardous
waste). Operators’ data are also used when available.
*The metrics in this chapter have not been validated by an external body other than our
assurance provider
Sustainability statement
28
DNO
3. Social
3.1 Own workforce
People are DNO’s most important resource. We celebrate
diversity in the DNO family in nationality, gender, race, culture,
religion, and age, and our 1,070 employees represent 39
different nationalities. The Company has offices in Stavanger,
Oslo, Erbil, Dubai and Aberdeen, as well as onshore and
offshore operations across the Middle East, the North Sea and
West Africa. We consider our workforce to include DNO
employees across all offices and operated fields, including
both permanent and temporary employees. Some of the health
and safety policies and procedures also cover contractors that
work at DNO sites. These contractors are classed as workers
in the value chain rather than part of own workforce;
nevertheless, certain health and safety disclosures related to
this category of workers are included within this section.
Our DMA has identified six material impacts related to our
workforce in the short term, of which three are positive and
three are negative. The negative impacts are considered to be
inherent and driven by the nature of our industry and regions
of operation. All of our workforce is potentially subject to these
impacts and are included in our disclosure; however, some of
the impacts are more relevant for certain groups of employees.
Employees at our operated fields face a higher risk of injuries,
females in the industry may experience gender disparity and
the industry's 24/7 operations can contribute to work-induced
stress. While the risk of negative impact from injuries would
typically involve individual incidents, potential impacts related
to gender disparity and work-induced stress are considered to
be more widespread and could affect either individuals or
groups of employees.
On the positive side, DNO enhances employee well-being
through competitive compensation, a strong commitment to
health and safety and diverse career opportunities. In the
Kurdistan region of Iraq, DNO takes an active role as a
responsible employer, contributing to significant job
opportunities and career advancements for local hires. The
Company also brings best-in-class health and safety standards
to its operations everywhere and encourages everyone to take
responsibility. Through the DMA, the Company assessed the
impacts and risks related to the workforce and based on in-
depth knowledge of the industry, the specifics of the
Company’s operations and engagement with stakeholders
DNO identified the employees at operated fields as the
categories with an elevated risk. DNO operations are not
considered to be at risk of significant incidents of child labor.
The Company has not identified any material risks or
opportunities that arise from dependencies on people in the
workforce.
As we have not developed a net-zero transition plan, this does
not currently affect our workforce.
The following section outlines how we engage with employees
and address these impacts through policies, targets and
actions.
Policies related to own workforce
To manage the material IROs related to DNO’s own workforce,
we have established multiple policies. These include the Code
of Conduct, HSSE policy, Diversity and Inclusion policy and
Major Accident Prevention policy. Our human rights
commitments are based on the UN Global Compact Principles
as set out in our Code of Conduct. Each of the relevant
policies are described in more detail below.
The Code of Conduct is described in section 4.1 Business
conduct and covers the fundamental principles for how we
strive to keep our workforce safe from harm, protect our
assets, contribute to the communities in which we operate and
minimize our environmental footprint. We expect everyone
working for or with DNO, or otherwise acting on behalf of the
Company, to be fully familiar with and adhere to these
principles. The Code of Conduct sets out standards and basic
rules for ensuring a safe working environment and defines
DNO’s commitment to respecting human rights. It also
explicitly states that DNO does not tolerate any form of
harassment. In addition to this general proscription, the Code
of Conduct specifically rejects discrimination based on race,
color, age, gender or sexual orientation.
Our HSSE policy guides our treatment of coworkers. The key
elements of our HSSE policy with regard to our workforce
include:
●
cooperation and a shared understanding of DNO's values
where concerns can be freely raised;
●
responsibilities of everyone who works for and with DNO;
●
accidents, are identified, understood, assessed and
controlled; and
●
alignment with our values and goals.
The HSSE policy states that we strive to create a rewarding
working environment for our employees, contractors and the
communities in which we operate. We are committed to
specific actions related to our employees’ health and
wellbeing, safety and security through the policy.
Our Diversity and Inclusion policy promotes equal treatment of
our employees. This is an ongoing effort aimed at reducing
gender-related disparities in an industry that remains largely
male-dominated. DNO believes that employing a diverse
workforce brings valuable perspectives and knowledge. We
recruit individuals based solely on merit and their suitability for
the role, and provide equal opportunities for all employees. To
ensure discrimination is prevented, leaders in DNO receive
training to ensure employees are treated fairly and evaluated
objectively. The procedures for reporting and following up on
incidents of discrimination are described below in the section
“Processes to remediate negative impacts and channels to
raise concerns”.
The Company’s Major Accident Prevention policy ensures that
DNO and its employees do everything they can to prevent
severe accidents and to protect employees from such
accidents should they nonetheless occur. The Company has
an occupational health and safety management system which
is used for mitigation and reporting incidents. The Code of
Conduct sets out everyone’s responsibility to report HSSE
incidents, unsafe conditions and near misses to the line
manager or the HSSE manager.
The Company’s Managing Director is accountable for the
Code of Conduct and HSSE policies across the organization.
The Diversity and Inclusion and Major Accident Prevention
Sustainability statement
Annual Report and Accounts 2024
DNO
29
policies are implemented by management at all levels of the
Company through the Company's business management
system. All policies are available for all of our employees on
the Company’s intranet site.
DNO's Board of Directors and senior management are also
committed to ensuring that there is no modern slavery
(including forced labor and child labor) or human trafficking in
any part of our business. This is safeguarded through the ERM
system, with provisions included in the Business Partner Code
of Conduct, as well as through our broader commitment to
uphold fundamental human rights, as outlined in the Code of
Conduct, although modern slavery is not explicitly mentioned
in a policy.
Processes for engaging with own workforce and workers’
representatives about impacts
DNO is committed to maintaining an open and constructive
dialogue with its employees. In all areas of operation, the most
important channel for employee engagement is direct
engagement through line management. In addition, the
Company’s Chief Human Resources and Corporate Services
Officer has functional responsibility for ensuring that employee
engagement takes place and for informing DNO’s senior
management about the results.
In Norway, the Company engages with its workforce through
the Working Environment Committees (WECs), which were
established as required under the Norwegian Working
Environment Act. Committee meetings are conducted on a
quarterly basis. The committees have an important role in
monitoring and improving the working environment and in
ensuring that the Company complies with laws and
regulations. DNO also arranges meetings on a regular basis
throughout the year with the elected employee representatives
and conducts employee satisfaction surveys. The engagement
with own workforce is primarily used to evaluate the
effectiveness of actions and initiatives. However, it may also in
some cases also be used to discuss and determine
approaches to mitigation. We consider that the channels we
use to engage with our employees are effective. The
effectiveness is assessed through various measures, including
the employee satisfaction surveys, and the analysis of trends
in reporting of concerns both in terms of number and
materiality.
Processes to remediate negative impacts and channels
for own workforce to raise concerns
DNO does its utmost to remediate any negative impact on
employees. The general procedure for providing remedy is not
set out in a formalized process, as it will depend on the
specific case and circumstances and determined on a case-
by-case basis where necessary.
Employees are encouraged to report any concerns relating to
the workplace to their line manager, or if circumstances require
it, a representative from the Human Resources department or
a compliance officer. DNO has a whistleblowing channel for
those who wish to raise such matters in strict privacy or even
anonymously. Only the Head of Compliance has access to
reports submitted via the whistleblowing channels and is
obliged to assess all such reports and to investigate all cases
that are assessed as eligible in accordance with the
Company’s whistleblowing and incident investigation
procedures. The status of concerns raised is reported by the
Compliance department to the Managing Director quarterly
and the audit committee biannually.
Information about the channels to raise concerns is outlined in
the Company’s Code of Conduct and the Whistleblowing
procedure, which all employees and contractors are expected
to have received, read and understood. This is reinforced
through the mandatory Code of Conduct training digitally
and/or face-to-face. The Company continuously monitors
whether employees have the necessary trust in the channels
to raise concerns via employee surveys in some locations and
direct engagement in all.
Through its risk assessment, DNO has identified field workers
as exposed to risk of injuries due to the nature of the oil and
gas industry. The results were validated through the materiality
assessment carried out for this report. The materiality
assessment also identified a risk that female workers may feel
isolated in a male-dominated environment. Building on these
insights, DNO is taking steps to continuously improve its HSSE
procedures. In 2024, the Company also established a Diversity
and Inclusion policy expressing the principles to be followed.
Actions related to own workforce
At DNO, we are committed to managing material IROs through
specific actions and resource allocation. We focus on the
prevention of work-related injuries and actively promote health
to reduce risks associated with the work environment,
including both physical and mental ill-being. Our actions are
primarily focused on formalizing policies and procedures and
covering all operational activities. DNO continuously strives to
improve any areas with negative impact on the workforce.
Through feedback from the employee survey and line manager
dialogues, employees can highlight areas where additional
actions are needed. The need for changes in processes or
policies is also assessed through the follow-up of reporting
through the occupational health and safety management
system.
The policies and processes that DNO have in place, along with
channels for reporting, ensure the Company’s own practices
do not cause or contribute to material negative impacts on the
workforce. They also serve as safeguards to ensure the
workforce is protected against any tensions that arise between
prevention and mitigation of material negative impacts and
other business pressures.
The human resources team at the corporate office oversees
areas such as diversity and inclusion, training and
performance management. In addition, employees within the
business units monitor these areas, with a primary focus on
health and safety matters. The cost of these roles and the
implementation of related actions related to our own workforce
are considered part of the running costs.
Below are descriptions of the key actions and metrics related
to working conditions, health, safety and security and equal
treatment and opportunities for all. The Company continues to
monitor these material areas and assesses the effectiveness
of actions and initiatives by regularly reviewing the relevant
metrics. In relation to own workforce, the ambitions within the
different material areas are set out below and these are
primarily based on absolute ambitions, such as the ambition of
zero serious health and safety incidents each year, rather than
measures of progress from a base line.
Sustainability statement
30
DNO
3.2 Working conditions
As of 31 December 2024, DNO had a workforce of 1,070
employees, of which 14 percent were women. Fifty five
individuals were based at the Company’s headquarters in Oslo
and 1,015 were engaged across our North Sea and Middle
East operations, including in offices in Erbil, Stavanger, Dubai
and Aberdeen. Our workforce is characterized by strong
cultural, religious and national diversity.
During our work with the DMA, we assessed impacts related to
the working conditions of our employees. We found that we
have material impacts on adequate wages and work-life
balance, which are inherent impacts in our industry. Working
condition metrics are tracked and closely followed by the
human resources team to ensure adequate wages, secure
employment and work-life balance. Employees in Norway
anonymously answer an employee satisfaction survey
annually in order for the effectiveness of policies and actions to
be measured. The survey is also used to map out potential
areas of improvement.
DNO aims to provide competitive wages to all of our
employees. The majority of our employees are individually
remunerated, and salaries are based on several factors. We
conduct regular market assessments to ensure we are offering
competitive wages to employees in each of the regions in
which we operate.
Further, as an employee in DNO, you are entrusted with a
wide range of responsibilities and various tasks. This can
sometimes be a time-consuming and stressful job, which in
turn may impact the health and work-life balance of DNO
employees. DNO aims to achieve a healthy balance between
its employees' work and private lives. In order to monitor
negative impacts related to work-life balance, DNO in some of
the locations undertakes annual employee satisfaction surveys
and has working environment committees, while in all locations
it maintains dialogue with employees through line
management. The purpose of this engagement is to assess
the level of the potential impact and identify areas where
additional measures are required. Internal employee surveys
show stable levels of job satisfaction. DNO has not
experienced increased sick leave due to health impacts that
can be linked to poor work-life balance, such as burnout. DNO
has not set any specific actions related to mitigating our
negative impact on our own workforce when it comes to work-
life balance, although the Company’s intentions are clearly
described in the Code of Conduct’s principle 2 (ensure a safe
working environment) and principle 3 (treat everyone with
respect).
DNO does its utmost to remediate the negative impact it may
have on employees. However, some impacts are hard to
remediate as they are out of DNO’s control and consequences
of larger geopolitical situations. Issues are handled on a case-
by-case basis based on employee feedback. It is our
experience that this is the best approach to accommodate our
employees and their needs resulting from specific impacts.
During 2024, there were no actual material impacts that
required the Company to take action to provide or enable
remedy in relation to working conditions. DNO aims to
continuously track the effectiveness of our policies as part of
the actions outlined throughout this section. We emphasize
continued learning and awareness to prevent actual instances
of negative impacts. If such impacts occur, we have measures
in place to handle the cases within relevant legal frameworks.
Additionally, we track and openly communicate numerous
metrics on our own workforce as outlined below, which may be
utilized for future decision making.
Metrics
Adequate wages
DNO's ambition is to offer adequate and fair wages to all
employees according to the equal pay for equal work of equal
value principle. The majority of our employees are individually
remunerated, and salaries are based on several factors. DNO
has grouped employees according to their placement in the
Company’s job ladder to ensure fair compensation practices.
We ensure that all of our employees are paid an adequate
wage that aligns with applicable benchmarks for their location.
Characteristics of employees
Employment figures are yearend figures and represent
headcount. All data is directly sourced from our employee
management system. The figures can be cross-referenced
with the Country-by-Country Report 2024, which is included in
this Annual Report. In 2024, we had a five percent turnover
rate as 55 employees left the Company.
Employees headcount by gender
Gender
Number of employees
Male
922
Female
148
Other
-
Not reported
-
Total employees
1070
Employees headcount by countr
y
Country
Number of employees
Norway
198
Kurdistan
796
United Kingdom
3
UAE
71
Other
2
Employees by contract type, broken down by gender
(headcount)
Financial year 2024
Female
Male
Not
disclosed
Total
Number of employees
148
922
-
1,070
Number of permanent employees
140
847
-
987
Number of temporary employees
8
75
-
83
Number of non-guaranteed hours
employees
-
-
-
-
Employees by contract type, broken down by region
(headcount)
Financial year 2024
Middle
East
North Sea
Corporate
Total
Number of employees
869
146
55
1,070
Number of permanent employees
812
123
52
987
Number of temporary employees
57
23
3
83
Number of non-guaranteed hours
employees
-
-
-
-
3.3 Health, Safety and Security
Health and safety
The health and safety of employees and contractors is
paramount to DNO. We believe all accidents are preventable
and are committed to zero serious health and safety incidents.
Ensuring a safe working environment by mitigating risks is
essential for maintaining efficient operations and a motivated
workforce. Our approach to health, safety and security is
Sustainability statement
Annual Report and Accounts 2024
DNO
31
formalized in our HSSE policy and Code of Conduct. DNO
acknowledges and respects internationally recognized human
and labor rights standards. The majority of the actions to
mitigate and prevent the negative impacts related to health
and safety are ongoing processes and procedures as part of
daily operations, rather than time-bound actions. The most
important processes and procedures are described below,
along with additional actions implemented in 2024 and those
planned for the future.
Our comprehensive occupational health and safety
management system is used to identify, understand, mitigate
and manage risks throughout our operations, while following
regulatory requirements and industry standards. All employees
and contractors are covered by the system and must comply
with it. If an incident or accident occurs, it must be reported
using the available channels. An investigation is then carried
out to identify the necessary, corrective and remediate
measures which are required to be put in place. The
implementation and effectiveness of these measures is
followed up by the relevant line managers and tracked in
management reporting systems.
To help keep the workplace safe, we prioritize asset integrity
through sound design, regular maintenance, inspections and
effective management of change procedures. We ensure an
open reporting culture for incidents and near misses, allowing
us to learn from and prevent recurring incidents in all parts of
the business.
DNO has implemented “safe cards” as a reporting tool in its
Kurdistan operations to promote awareness and reporting of
conditions and behaviors that do not align with DNO's policies,
procedures or industry standards in terms of HSSE matters.
Safe cards are submitted electronically via DNO’s internal
management reporting system, allowing developments to be
continuously monitored and assessed, with mitigation actions
implemented as and when required.
In 2024, DNO took additional concrete steps to improve traffic
safety at its Kurdistan sites. Driving represents a considerable
personnel risk within onshore oil and gas operations,
especially in the value chain (e.g., contractors). To improve
driving safety, portable In-Vehicle Monitoring System (IVMS)
units were introduced in contractor vehicles entering DNO
sites in 2024. The IVMS gives the driver feedback in real-time
about driving behaviors and allows DNO to monitor speed,
acceleration and harsh braking, which are linked directly to at-
risk driving habits. The effectiveness of this initiative is
reflected in the complete elimination of serious motor vehicle
incidents compared to the previous year. The incidents are
graded on a scale from 1 to 5, with 'serious' categorized as
level 3 (resulting in a lost workday) and above. DNO also
rolled out a campaign in 2024 called “Being Safe 24/7 - Work
Safe, Safe Home” which aims to build a bridge between work
and home life, making safety a key part of employees’
everyday life at work and at home with their families. The
effectiveness of this initiative is planned measured through
safety performance metrics.
Going forward, DNO seeks to further improve HSSE training in
the field in Kurdistan. To improve retention and overcome
language barriers, the Company has recently introduced virtual
training methods in addition to its traditional text-based
training, induction programs and “toolbox” talks. This is
expected to increase safety awareness which in turn may
reduce the rate of incidents.
During the year, one work-related incident involving an
employee and three incidents involving contractors were
recorded. Each case was thoroughly investigated and
addressed in line with DNO’s policies and procedures, with
corrective actions implemented where necessary.
Security
DNO is committed to providing a secure work environment for
all personnel involved in its activities. Due to a security
environment which at times can be challenging in Kurdistan,
there are security personnel at all field locations at all times to
ensure the safety of all employees. This consists of both DNO-
hired security staff and the government-run oil police force.
DNO has also established a layered security system whereby
personnel and visitors are required to pass through several
security checkpoints before entering the premises.
Metrics
A key metric widely used for benchmarking safety performance
of companies in the oil and gas industry is the Total
Recordable Injury Frequency (TRIF), which is equivalent to the
ESRS defined metric of Work Related Accident Rate. TRIF is
defined as the number of recordable injuries per million hours
worked. It includes all work-related incidents requiring medical
treatment beyond first aid, restricted work cases and lost-time
injuries. All incidents are tracked in the management reporting
system and reported weekly to management and quarterly to
the Board’s HSSE committee. In 2024, DNO had a TRIF of
1.06 in its operational activities (including both employees and
contractors working at DNO’s facilities), down from 1.50 in
2023. The 2024 figure is above the industry average TRIF of
0.84 (based on data from the International Association of Oil
and Gas Producers (IOGP) for 2023, the latest year for which
data is available). The Company is determined to improve its
safety performance and aims for a TRIF at the IOGP industry
average or better.
Health and safety
Indicator
2024
Number of fatalities as a result of work-related injuries and work-related ill health
Employees
-
Contractors
-
Total
-
Work Related Accident Rate*
Employees (per million hours worked)
0.49
Contractors (per million hours worked)
1.73
Total (per million hours worked)
1.06
Number of Work Related Accidents**
Employees
1
Contractors
3
Total
4
Exposure hours
Employees (thousand hours)
2,059
Contractors (thousand hours)
1,730
Total (thousand hours)
3,789
Number of recordable work-related ill health of employees
-
Number of days lost to work-related injuries and fatalities from work-
related accidents, work-related ill health and fatalities from ill health
from employees
-
*Work Related Accident Rate is equivalent to Total Recordable Injury Frequency (TRIF)
** Work Related Accidents is equivalent to Recordable Injuries
Sustainability statement
32
DNO
3.4 Equal treatment and opportunities for all
The oil and gas industry globally and in our areas of
operations, Kurdistan and in the North Sea, historically has
had a workforce with a higher proportion of men, which
contributes to gender disparity. DNO’s approach to offering
employees, both women and men, a wide variety of tasks and
responsibilities, including training and development, continues
to have a positive impact on employees’ career development.
The majority of actions related to these areas are embedded in
the Company’s processes and procedures, rather than through
time-bound actions and initiatives. The processes are
described below.
DNO’s Code of Conduct sets out a commitment to equal
treatment and opportunities for all, in addition to stating the
Company’s commitment to inclusion and focus on fostering an
open and diverse culture. The Company aims to eliminate
discrimination, including harassment, and promote equal
opportunities to advance diversity and inclusion. The Code of
Conduct explicitly addresses discrimination based on race,
religion, sexual orientation, age and gender.
Managers at DNO are responsible for setting the tone and
serving as role models, while ensuring that everyone in their
respective team receives the same information and
opportunities to contribute. They have an important role in
preventing, mitigating and acting upon discrimination once
detected and advancing diversity and inclusion. The Company
has zero tolerance for any form of abuse, bullying, humiliation,
intimidation or harassment and does not condone any
threatening or degrading behavior. Employees are encouraged
to stand up against harassment, treat everyone with respect
and be sensitive to different cultures and customs.
The Board, senior management and all leaders in DNO are
committed to and accountable for focusing on diversity and
inclusion. We expect all of our employees, contractors, interns
and visitors at all levels and locations in DNO to value diversity
and equality and contribute to building a truly inclusive culture.
DNO has introduced a Diversity and Inclusion policy outlining
guiding principles and implementation strategy.
In cases of actual negative impact, any remediating efforts
would be determined on a case-by-case basis, depending on
the specific details and circumstances. During the year, there
were three reported cases of harassment which were
investigated and addressed in line with DNO’s policies and
procedures, with corrective actions implemented where
necessary.
DNO aims to continuously track the effectiveness of our
policies as part of the actions outlined throughout this section.
We emphasize continued learning and awareness to prevent
actual instances of negative impacts. If such impacts occur, we
have measures in place to handle the cases within relevant
legal frameworks. Additionally, we track and openly
communicate numerous metrics on our own workforce as
outlined below, which may be utilized for future decision
making.
Metrics
DNO continues to recruit and promote women, who
represented 14 percent of the Company’s overall workforce
and 33 percent of employees in managerial, administrative and
other non-field operational positions as of yearend 2024. In
2024, two members of the Board of Directors and five of the
Company’s senior management were women, representing 40
and 45 percent of the total, respectively. By age group,
employees below 30 years old represented 15 percent of
employees, while 66 percent were between 30 and 50 with the
remaining 19 percent were over 50 years old.
Remuneration
Indicator
2024
Gender pay gap
-71.9%
Annual total remuneration ratio
22.1
Incidents, complaints and severe human rights impacts
Indicator
2024
Incidents of discrimination (including harassment)
3*
Number of complaints made through the channel to raise concerns
32
Total amount of fines, penalties, and compensation for damages (USD)
0
*No discrimination cases reported; three harassment cases reported. None of the
reported cases were raised to the National Contact Point for OECD Multinational
Enterprises
In 2024, DNO received no concerns on human rights violations
and/or incidents in relation to our own workforce, nor did we
incur any fines, penalties or compensation for human rights
related issues.
Employees who participated in regular performance and career development
reviews
Indicator
2024
Male
100%
Female
100%
Total
100%
DNO does not have accurate data on average training hours
per employee for 2024 but is implementing routines to ensure
availability in future reports.
3.5 Reporting policies and methodology
Reported
metric*
Policy, methodology and assumptions
Headcount
Number of employees at year end.
Turnover rate
Turnover rate is defined as the number of employees who left the
Company divided by the average number of employees, multiplying
by 100.
Work Related
Accident Rate
Work related accident rate is defined as number of work related
accidents divided by exposure hours, multiplied by 1,000,000.
Number of Work
Related
Accidents
Number of work related accidents is defined as the number of
reported cases of accidents reported in our health and safety
management system.
Exposure hours
own workforce.
Gender pay gap
Gender pay gap is defined as the difference of average pay levels
between female and male employees, expressed as percentage of
the average pay level of male employees.
Annual total
remuneration
ratio
The annual total remuneration ratio is defined as the highest paid
individual to the median annual total remuneration for all employees.
To ensure comparable data, the calculations are performed based
on the annual salary of all permanent workers.
*The metrics in this chapter have not been validated by an external body other than our
assurance provider
Sustainability statement
Annual Report and Accounts 2024
DNO
33
3.6 Workers in the value chain
DNO cares about the welfare of all workers within its value
chain. This encompasses people performing a wide variety of
tasks such as production and processing of raw materials,
manufacturing of equipment, transportation, drilling of wells,
petroleum processing, waste disposal and bringing products to
the market. DNO works to identify, understand and manage
personnel risks in our value chain to ensure that we operate
sustainably and responsibly. Due to the Company’s large and
complex value chain, including suppliers and sub-suppliers
within some regions and industries that have a lower
enforcement rate of human rights, there is a risk that instances
of child and forced labor might occur within DNO’s value chain
activities. Despite DNO’s strict requirements and processes for
supplier risk assessment, such cases may be difficult to
uncover.
Value chain workers at DNO’s operated sites are subject to the
same workplace HSSE standards as our own employees and
any incidents involving such value chain workers are
investigated and recorded in our safety statistics. In general,
the Company maintains strict oversight of its facilities to
ensure a safe working environment. For value chain workers
employed outside of DNO’s operated sites, the Company
seeks to address working condition concerns through its
contracting and supplier risk assessment processes.
From the DMA, we identified two material IROs concerning
workers within the value chain over the short term, both of
which have a potential negative impact. The negative impacts
cover the elevated risk of personal and exposure injuries for
workers within several parts of the value chain, and the
possible gender disparity women may experience working in a
male-dominated industry. These issues are considered
inherent to the industry in which we operate.
Policies related to value chain workers
DNO has a clear governance framework by which we conduct
our affairs related to our value chain workers. We have a
Business Partner Code of Conduct that applies to all suppliers
and customers, which requires commitment to comply with
DNO’s environmental and safety requirements, and
internationally recognized employment practices, including, but
not limited to, prevention of modern slavery, child labor,
harassment or discrimination, and acceptance of freedom of
association, whilst promoting decent working hours and living
wages set in accordance with applicable laws. We have
dialogue with our suppliers to assess and improve their
performance, including with respect to the environment. We
use risk assessments to identify the frequency and level of
detail of such dialogue. The supplier risk assessment is based
on the type of services provided, geographic location, incident
reports, contract size and operational location. For suppliers
with an increased risk profile, DNO assesses documented
policies and practices of suppliers and implements preventive
and mitigating measures with continuous tracking and when
necessary, DNO takes corrective actions. We also audit
selected suppliers to ensure compliance with relevant
regulations and DNO’s standards, including with respect to
ESG standards. In addition to the Business Partner Code of
Conduct, DNO has embedded HSSE requirements in all of its
contracts with suppliers. The Managing Director is accountable
for the policy, the General Managers of each business unit are
responsible for implementing the policy aided by DNO’s supply
chain function and the Head of Compliance. As we set the
same expectations for our business partners as for ourselves,
the Diversity and Inclusion policy and the Major Accident
Prevention policy are also considered relevant for our value
chain workers. All of these, including the HSSE requirements,
reduce the risk of major accidents and disparity (e.g., based on
gender) in our value chain. The Business Partner Code of
Conduct is available on DNO’s website and other relevant
policies are made available to the supplier workers, as
required.
DNO acknowledges and respects internationally recognized
human and labor rights standards. Our human rights
commitments have UN Global Compact as a reference for
responsible business conduct, as set out in the Code of
Conduct. Our Business Partner Code of Conduct does not
currently mention engagement with value chain workers;
however, we will evaluate and modify our policies and
procedures as risks are ever evolving. DNO did not identify
any actual adverse impacts on human rights and decent
working conditions in 2024 related to our value chain.
Process of engaging with value chain workers about
impacts
At our operated sites, value chain workers are subject to the
same rights and obligations as our own employees and are
expected to report on matters relevant to working conditions.
Informational flyers are available, highlighting key aspects of
the Code of Conduct and other essential procedures. DNO
conducts a risk assessment prior to contract signing, which is
described within the actions below. This risk assessment
includes dialogue with representatives for the supplier,
particularly for suppliers with a higher risk profile. As part of the
ERM, DNO can and does conduct audits of its suppliers
against the requirements set out in the Business Partner Code
of Conduct, including but not limited to HSSE standards and
the working conditions of value chain workers. Apart from this,
DNO does not currently have in place any formalized
processes to engage with value chain workers, but the
Company is assessing whether any measures should be
implemented.
DNO’s non-operated sites in the North Sea are in highly
regulated countries with established legal frameworks and
renowned operators. These regulatory environments set clear
requirements for worker rights and safety. DNO follows up
through existing mechanisms, including engagement with
operators and participation in joint governance structures.
Process to remediate negative impacts and channels for
value chain workers raise concerns
We encourage workers in the value chain or those with
concerns regarding our workers in the value chain to raise
these through our channel for concerns. The confidential
channel is described in more detail within section 4.1 Business
conduct. Workers in the value chain are made aware of such
channels for raising concerns through the Code of Conduct
available on the Company’s website. DNO is currently
exploring ways to ensure the effectiveness of the channel and
assess awareness and trust in using it to raise concerns.
All processes and actions with regards to providing remedy in
instances where DNO has caused or contributed to actional
material impacts would be determined on a case-by-case
basis. The individual circumstances would be assessed in
order to determine appropriate follow-up and remedial
measures.
Sustainability statement
34
DNO
Actions related to value chain workers
In order to prevent and mitigate negative impacts related to
workers in the value chain, DNO has established a company-
wide risk assessment system to gain insights into the working
conditions across our value chain. The supplier risk
assessment is based on credible proxies for engagements and
analyzes the type of services provided, geographic location,
incident reports, contract size and operational location. For
suppliers with an increased risk profile, DNO assesses
documented policies and practices of suppliers, as well as
implementing preventive and mitigating measures with
continuous tracking, and when necessary, we take corrective
actions.
The risk assessment is conducted upon contract signing and
periodically afterwards to ensure that suppliers meet DNO's
ethical behavior and business conduct standards. The Head of
Compliance has the responsibility of ensuring that the process
is conducted. DNO has a robust supply chain process and
management team working with nearly 1,000 suppliers
worldwide.
Following the closure of the export pipeline in Kurdistan in
March 2023 and the commencement of local sales, DNO has
had a different set of suppliers and other business partners
than in previous years. As DNO entered into new contracts,
the Company used the opportunity to underscore the
importance of respect for human rights and decent working
conditions in DNO’s Business Partner Code of Conduct.
Concerning our suppliers, we aim to implement improved risk
assessment tools to better visualize our supply chain risks.
The results of our risk assessment process described above
determine further actions DNO takes related to our suppliers,
such as providing or enabling remedies concerning material
impact on workers in the value chain. The Company has
sufficient and appropriate policies, procedures and initiatives in
place for contractors working on DNO sites. Incidents reported
are monitored through the management reporting system. The
tracking of any high-risk suppliers is used to follow up on
workers in the value chain that DNO has less direct interaction
with.
During 2024, DNO introduced portable IVMS units in
contractor vehicles entering the Company’s sites. This initiative
is described under 3.1 (Own workforce) above.
At DNO procurement employees primarily oversee suppliers
and their risk assessments, while HSSE staff monitor both
contractors and employees. The costs of these roles and
related workforce actions are included in regular business
expenses.
3.7 Affected communities
DNO’s land-based operations are particularly prone to
affecting local communities due to the nature and location of
the business activities. The Company takes a proactive
approach, ensuring that its business model is informed by and
adapted to the needs of local communities. Our operations in
Kurdistan are centered in the areas of Tawke and Baeshiqa,
with villages located near both sites. DNO’s sites cover a
considerable area of land and require a significant number of
workers to build, operate and maintain. Our operations
contribute to the development of local communities,
particularly in Kurdistan, where we create jobs and hire and
train local staff. We also partner with local companies for
services such as civil work, maintenance, transportation,
remediation, catering, health care, security and waste
disposal. We work to ensure that our service providers are not
just competitive but also competent and compliant with DNO’s
Business Partner Code of Conduct and with internationally
recognized human rights standards.
Our DMA identified five IROs related to affected communities
in both the short and medium term. Of these, three are
positive, one is negative, and one represents an opportunity.
The positive impacts are primarily linked to our operations in
Kurdistan. We use our operational presence and capability to
provide support to the nearby communities. During DNO’s
more than 20 years in Kurdistan, the Company has supported
infrastructure, agriculture, health and education projects. This
enables the development of infrastructure and boosts local
development.
We also support local communities by prioritizing local
recruitment, where suitably qualified candidates can be
identified, which has resulted in most of our employees being
local hires. Additionally, DNO prioritizes selecting local
suppliers over international alternatives when qualifications are
equal. DNO funds various initiatives aimed at supporting local
communities, such as construction of schools and roads.
These efforts foster strong, mutually beneficial relationships
with the communities where we operate.
The potential negative impact arises from DNO's use of land in
Kurdistan that could have directly benefited local communities
through alternative land uses. We acknowledge that the land
on which we operate, especially related to our onshore
activities, could have been used for other activities, including
farming. DNO is in continuous dialogue with these
communities to ensure that we understand and limit any
negative impacts to the best of our ability, and we have
procedures in place for compensating landowners as
described below. Maintaining a good relationship with local
and affected communities as we minimize negative impacts
and optimize positive impacts and opportunities is important to
DNO. This opportunity for business expansion in the future is
largely connected with the positive impacts described above.
The opportunity lies in DNO’s role as a major employer in
Kurdistan, which generates both direct and indirect positive
effects for the local economy. Our engagement in affected and
local communities is also a reputational opportunity as it
enhances our relationship with the community and opens
avenues for further business expansion and partnerships.
Policies related to affected communities
DNO has implemented procedures governing land acquisition
and Corporate Social Responsibility (CSR) projects in
Kurdistan. The Land Acquisition and Compensation procedure
outlines how DNO engages with affected communities,
including private landowners, when acquiring or leasing land
for operational, drilling or project needs. The procedure
includes a land return process, assessing potential
environmental or social risks to the owner before land is
handed back, reinforcing DNO’s commitment to responsible
land management. The CSR projects procedure outlines steps
taken to identify and execute CSR projects which provide
benefit to local communities that are close to the Company's
operations. The procedures do not explicitly mention
indigenous people or refer to UN Guiding Principles on
Business and Human Rights, however, they mandate
collaboration with a local committee that plays a role in the
Sustainability statement
Annual Report and Accounts 2024
DNO
35
decision-making process, ensuring community voices are
heard and fair compensation is provided. There have been no
reported cases of non-respect of the UN Guiding Principles on
Business and Human Rights, the ILO Declaration on
Fundamental Principles and Rights at Work or the OECD
Guidelines for Multinational Enterprises that involve affected
communities during the year.
The procedures are applicable to employees working in or
involved in decision-making which could affect local
communities. It is the General Manager for the Kurdistan
business unit who is accountable for the implementation of the
policy and the policy is available for all employees through the
Company’s intranet.
Together with the Code of Conduct, which sets out the
Company’s policies for behavior of employees and how we
contribute to the communities in which we operate, the
procedures reinforce DNO’s commitment to respecting human
rights and following the principles of the UN Global Compact.
Processes for engaging with affected communities about
impacts
The Company is focused on developing strong engagement
with affected communities in Kurdistan. The communities are
mainly small villages located in vicinity of our field operations
that might be affected by drilling or production activities in the
area. This engagement involves discussions with local leaders
and authorities at all affected locations to understand
community needs. There are no set intervals between such
meetings as frequency depends on the need. The
responsibility for this engagement lies with the Country
Manager in Kurdistan. Typically, it is DNO that initiates these
meetings. Local leaders are, however, able to contact the
Company through the CSR manager to either ask for a
meeting, to raise concerns or to give feedback. The
effectiveness of DNO's engagement is assessed through the
successful implementation of CSR projects and visible
community improvements. DNO also supports local economies
by employing local workers and using local suppliers. Actions
in relation to this are integrated into regular operations at the
business unit level.
In the North Sea, DNO’s operated and non-operated activities
primarily take place offshore, meaning there are few local
communities that are directly affected by operations. However,
there are stakeholders such as fisheries which could be
affected by activities. All drilling activities require discharge
permits that are subject to public consultations. Field
development projects require comprehensive impact
assessments that are subject to public hearing, forming the
basis for the governmental approval process.
Processes to remediate negative impacts and channels
for affected communities to raise concerns
DNO compensates local landowners in Kurdistan for land use
in accordance with local laws and government guidelines while
striving to minimize its footprint and negative impacts.
When we no longer require land for our operations, we
remediate it before returning it to its owner. Aligning our
remediating processes with the needs and wishes of the
affected communities and the local and regional authorities is
important to us. We develop these actions based on the
outcomes of our engagement with relevant communities and
the authorities. We determine effectiveness by observing
community improvements and gathering feedback from them.
The communities can raise concerns through the authorities,
local leaders or by reaching out to DNO’s local CSR manager.
In the North Sea, rules for remediation of negative impacts are
set by governments and the various license partnerships are
responsible for complying with relevant regulations.
The actions related to preventing and mitigating negative
impacts on the local communities are derived through the
current processes and procedures in place. Specific actions
are developed on a case-by-case approach and DNO does not
currently have other specific actions planned, as the Company
deems the processes and procedures currently in place to be
sufficient measures to mitigate and remedy any negative
impacts identified. The Company continues to work closely in
dialogue with local leaders and authorities, to ensure any
changes in impacts or need for additional actions are handled
in an appropriate manner. DNO does not have any targets nor
metrics that are considered relevant to affected communities.
The effectiveness of the existing processes and procedures is
assessed through continuous dialogue with local leaders and
authorities, as outlined above.
4. Governance
4.1 Business conduct
DNO operates in some of the most challenging areas of the
world and is committed to ethical, sustainable and responsible
operating policies and practices of the highest order. It is
therefore critical that each and every one of us always keeps
in mind how we act and how we conduct our business. The
section below describes how DNO has put in place policies,
procedures and processes to guide and inform employees of
their expectations and responsibilities.
The DMA identified three material IROs related to governance,
which are the risks related to non-compliance with rules and
regulations regarding corruption, whistleblowers and
management of suppliers. Each of the risks are linked to
potential legal, financial and reputational implications for DNO.
Policies
DNO’s Code of Conduct sets out the fundamental principles by
which we conduct all of our business.
Norwegian Code of Practice for Corporate Governance. The
Articles of Association and the Norwegian Public Limited
Liability Companies Act form the legal framework for DNO’s
business activities. DNO is also subject to and complies with
the requirements of Norwegian securities legislation.
Our Code of Conduct sets clear expectations for the business
conduct of everyone working for or with DNO or otherwise
acting on behalf of the Company. It therefore covers risks and
opportunities throughout the Company’s value chain. The
Code sets out six principles:
●
●
●
●
●
●
Sustainability statement
36
DNO
The Managing Director is accountable for the Code of Conduct
and the Head of Compliance carries the responsibility to
ensure its implementation throughout the Company. The Code
of Conduct is publicly available on DNO’s website.
Failure to comply with our Code of Conduct will lead to
disciplinary action. Our Code of Conduct encourages our
personnel to raise concerns about unethical or illegal behavior
and breaches of DNO’s Code of Conduct or other Company
policies. When concerns are raised, our compliance
department assesses and categorizes each case, and then
handles them internally or externally, as warranted. If the
concern raises credible allegations of illegal activity, it will be
reported to the relevant authorities.
The Company has a confidential channel for internal and
external stakeholders that wish to raise such matters in strict
privacy or anonymously. If someone becomes aware of
business conduct at DNO that conflicts with the Code of
Conduct, we encourage them to tell us directly or use our
confidential channels, without fear of retaliation. DNO has strict
procedures to protect whistleblowers including support with
legal advice, if necessary. The Company has established
procedures for whistleblowing and investigations, the latter of
which includes guidelines for interviews. The procedures form
part of the Company’s business management system, which is
available to staff via DNO’s internal portals. Additional
promotional campaigns on reporting and whistleblower
awareness are displayed in all DNO offices and workplaces,
translated into local languages where appropriate. The
whistleblower procedure states that employees who exercise
their right to notify DNO about misconduct will be protected
from any retaliation.
DNO has a zero-tolerance policy for bribery, corruption and
other illegal, fraudulent or unethical business practices. This is
stated in principle one of our Code of Conduct. We have also
adopted an anti-corruption policy that employees must follow.
The policy is available on the “My DNO Compliance” intranet
site and brings together all compliance policies, interactive
training programs, business hospitality requests and conflict of
interest registrations. The Code of Conduct is also publicly
available on DNO’s website. Awareness of corruption and
bribery risks are raised via the mandatory Code of Conduct
training for all staff. Functions particularly exposed to
corruption risk, such as those interacting closely with suppliers,
customers and government bodies, are subject to strict
procedures. This includes requirements for approval of
business hospitality and for reporting conflicts of interest, as
well as strict separation of responsibilities in tender processes
and a “four-eye principle” for financial approvals.
Every second year, we require company-wide training in our
Code of Conduct, including anti-corruption, bribery and
whistleblowing. It is designed to equip employees with the
knowledge and skills to identify and prevent corruption and
bribery and to report concerns should they arise. All staff,
including members of the administration, management and the
Board, are required to receive the training. Extra training is
given to staff at-risk functions and staff who receive reports of
potential breaches of Company policy. We have identified the
supply chain and human resources departments as at-risk
functions. These are consequently given additional face-to-
face training and updates on relevant issues. In 2024, all
management for the at-risk functions received the required
training.
Management of suppliers
DNO is committed to managing procurement processes fairly
and with transparency. The Company has a policy to guide our
conduct with suppliers, including regular audits and
assessments to monitor compliance and address any issues.
Non-compliance with regulations may have legal, financial and
reputational consequences.
When entering into a contract with a new supplier, appropriate
due diligence is made both upon contract signing and
periodically thereafter to ensure that the supplier meets DNO's
ethical behavior and business conduct standards.
Environmental and social criteria are also integrated into
DNO's supplier selection process.
Ensuring that our suppliers get paid in a timely manner is
important to DNO. Payment terms differ between jurisdictions
and the maximum number of days until the due date is
sometimes also a matter of negotiation. There are currently no
legal proceedings outstanding against DNO for late payments.
Corruption and bribery
Non-compliance with rules and regulations regarding
corruption can lead to legal, financial and reputational risks.
DNO is committed to maintaining integrity and transparency in
our operations. As described above, DNO has implemented a
system that includes policies, procedures, training programs
and reporting mechanisms to prevent and detect corruption
and bribery. Our Managing Director is accountable for its
implementation throughout the Company.
This includes an anti-corruption policy communicated to all
employees and relevant stakeholders, outlining the Company's
zero-tolerance stance on corruption and bribery. Detection
mechanisms such as regular audits, risk assessments and
monitoring systems are in place to identify potential instances
of corruption and bribery. We take a bottom-up approach to
identifying and mitigating risks, with the Board providing
strategic input and oversight.
When allegations or incidents are reported, the course of
action is based on the nature of the investigations. Our
compliance department assesses whether an investigation is
warranted and, if so, whether it should be internal or external
and whether the issue needs to be reported to the relevant
authorities. In rare cases, the allegations or incidents are
reviewed by an independent committee, separate from the
management chain involved, to ensure impartiality and
transparency in the process. The outcomes of these
investigations are reported to the Managing Director quarterly
and to the Board’s audit committee biannually to maintain
accountability and transparency.
During the reporting period, DNO’s compliance team received
32 tips on potential Code of Conduct violations via the
confidential channel for reporting, of which three were related
to suspicions of corruption or bribery. None of the tips resulted
in substantiated cases of corruption or bribery and no actions
were required to address breaches of policies or procedures
related to anti-corruption and anti-bribery. There were no
confirmed incidents involving dismissals, disciplinary actions,
contract terminations, or public legal cases related to
corruption or bribery, and there were zero convictions or fines
for anti-corruption and anti-bribery law violations against the
Company.
Sustainability statement
Annual Report and Accounts 2024
DNO
37
Metrics
Actions are integrated into regular operations at the corporate
and business unit level, utilizing human and financial
resources. Resources allocated to business conduct are not
tracked independently but included in the overall operating and
capital expenditure. DNO has not set any targets in relation to
its governance as the Company is focused on building a strong
foundation through policies and processes.
Anti-corruption and bribery
Indicator
2024
Confirmed incidents of corruption
Total number of incidents
-
Confirmed cases employees
-
Confirmed cases contractor
-
Employees directly involved in corruption incidents in the value chain
-
Significant fines
Public legal cases
-
Number of convictions
-
Value (USD)
-
Sustainability statement
38
DNO
5. Appendix
Appendix 1: Mapping of sustainability statement to the due diligence process
Core element of due diligence
Paragraphs in the sustainability statement
Embedding due diligence in governance, strategy and
business model
Cross-topic
Information provided to sustainability matters addressed by the administrative, management and supervisory bodies
Integration of sustainability-related performance in incentive schemes
Material IROs and their interaction with strategy and business model
Engaging with affected stakeholders
Cross-topics
Interests and views of stakeholders
Description of the process to identify and assess material IROs
Social
Processes for engaging with own workforce and workers’ representatives about impacts
Process of engaging with value chain workers about impacts
Processes for engaging with affected communities about impacts
Identifying and assessing adverse impacts
Cross-topic
Description of the process to identify and assess material IROs
Environment
Material IROs and interaction with strategy and business model
Social
Processes to remediate negative impacts and channels for own workforce to raise concerns
Process to remediate negative impacts and channels for value chain workers raise concerns
Processes to remediate negative impacts and channels for affected communities to raise concerns
Taking actions and describing processes to address those
adverse impacts
Environment
Actions and resources in relation to climate change policies
Actions and resources related to pollution
Actions and resources related resources use and circular economy
Social
Actions related to own workforce
Actions related to value chain workers
Processes to remediate negative impacts and channels for affected communities to raise concerns
Governance
Corruption and bribery
Tracking and communicating the effectiveness of these efforts
Environment
Metrics and targets (under 2.2)
Energy consumption
Scopes 1, 2, 3 and total GHG emissions
Pollution of air
Metrics and targets (under 2.4)
Social
Actions related to own workforce
Equal treatment and opportunities for all
Adequate wages
Health, safety and security
Appendix 2: Disclosures in accordance with Annex II to the EU Taxonomy Regulation
Sustainability statement
Annual Report and Accounts 2024
DNO
39
Appendix 3: Disclosure in accordance with Annex XII the EU Complementary Climate Delegated Act
for nuclear energy and fossil gas activities
Row
Nuclear energy related activities
1
The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from
nuclear processes with minimal waste from the fuel cycle.
NO
2
The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of
district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies.
NO
3
The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district
heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades.
NO
5
Fossil gas related activities
4
The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels.
NO
5
The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels.
NO
6
The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels.
NO
Sustainability statement
40
DNO
Appendix 4: Disclosure requirements and references
Material ESRS
topic
Disclosure requirements
Page
ESRS 2
BP-1: General basis for preparation of sustainability statements
18
BP-2: Disclosures in relation to specific circumstances
18
GOV-1: The role of the administrative, management and supervisory bodies
18
GOV-2: Information provided to and sustainability matters addressed by the undertaking’s administrative, management and supervisory bodies
18
GOV-3: Integration of sustainability-related performance in incentive schemes
19
GOV-4: Statement on due diligence
19
GOV-5: Risk management and internal controls over sustainability reporting
19
SBM-1: Strategy, business model and value chain
19
SBM-2: Interests and views of stakeholders
19
SBM-3: Material impacts, risks and opportunities and their interaction with strategy and business model
20
IRO-1: Description of the process to identify and assess material impacts, risks and opportunities
21
IRO-2: Disclosure requirements in ESRS covered by the undertaking’s sustainability statement
22
E1 Climate
change
E1-1: Transition plan for climate change mitigation
23
E1-2: Policies related to climate change mitigation and adaptation
23
E1-3: Actions and resources in relation to climate change policies
24
E1-4: Targets related to climate change mitigation and adaptation
24
E1-5: Energy consumption and mix
25
E1-6: Gross Scopes 1, 2, 3 and total GHG emissions
25
E1-7: GHG removals and GHG mitigation projects financed through carbon credits
26
E2 Pollution
E2-1: Policies related to pollution
26
E2-2: Actions and resources related to pollution
26
E2-3: Targets related to pollution
26
E2-4: Pollution of air
26
E5 Circular
economy
E5-1: Policies related to resource use and circular economy
26
E5-2: Actions and resources related to resource use and circular economy
27
E5-3: Targets related to resource use and circular economy
27
E5-4: Resource inflows
27
E5-5: Resource outflow
27
S1 Own
workforce
S1-1: Policies related to own workforce
28
S1-2: Processes for engaging with own workforce and workers’ representatives about impacts
29
S1-3: Processes to remediate negative impacts and channels for own workforce to raise concerns
29
S1-4: Taking action on material impacts on own workforce, and approaches to managing material risks and pursuing material opportunities related to own workforce,
and effectiveness of those actions
29
S1-5: Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities
29
S1-6: Characteristics of the undertaking’s employees
30
S1-9: Diversity metrics
32
S1-10: Adequate wages
30
S1-13: Training and skills development metrics
32
S1-14: Health and safety metrics
31
S1-16: Remuneration metrics (pay gap and total remuneration)
32
S1-17: Incidents, complaints and severe human rights impacts
31
S2 Workers in
the value chain
S2-1: Policies related to value chain workers
33
S2-2: Processes for engaging with value chain workers about impacts
33
S2-3: Processes to remediate negative impacts and channels for value chain workers to raise concerns
33
S2-4: Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain
workers, and effectiveness of those actions
34
S2-5: Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities
34
S3 Affected
communities
S3-1 Policies related to affected communities
34
S3-2 Processes for engaging with affected communities about impacts
35
S3-3 Processes to remediate negative impacts and channels for affected communities to raise concerns
35
S3-4 Taking action on material impacts on affected communities, and approaches to managing material risks and pursuing material opportunities related to affected
communities, and effectiveness of those actions
35
S3-5 Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities
35
G1 Business
conduct
G1-1: Business conduct policies and corporate culture
35
G1-2: Management of relationships with suppliers
36
G1-3: Prevention and detection of corruption and bribery
36
G1-4: Incidents of corruption or bribery
37
G1-6: Payment practices
36
Disclosure Requirement and related
datapoint
SFDR reference
Pillar 3 reference
Benchmark Regulation
reference
EU Climate
Law reference
Materiality DNO
ESRS 2 GOV-1 Board's gender diversity
paragraph 21 (d)
Indicator number 13 of Table #1 of
Annex 1
Commission Delegated
Regulation (EU)
2020/1816 (27), Annex II
Material
ESRS 2 GOV-1 Percentage of board members
who are independent paragraph 21 (e)
Delegated Regulation (EU)
2020/1816, Annex II
Material
ESRS 2 GOV-4 Statement on due diligence
paragraph 30
Indicator number 10 Table #3 of
Annex 1
Material
ESRS 2 SBM-1 Involvement in activities related
to fossil fuel activities paragraph 40 (d) i
Indicators number 4 Table #1 of
Annex 1
Article 449a Regulation (EU) No 575/2013;
Commission Implementing Regulation (EU)
2022/2453 (28) Table 1: Qualitative information on
Environmental risk and Table 2: Qualitative
information on Social risk
Delegated Regulation (EU)
2020/1816, Annex II
Material
Sustainability statement
Annual Report and Accounts 2024
DNO
41
ESRS 2 SBM-1 Involvement in activities related
to chemical production paragraph 40 (d) ii
Indicator number 9 Table #2 of
Annex 1
Delegated Regulation (EU)
2020/1816, Annex II
Immaterial
ESRS 2 SBM-1 Involvement in activities related
to controversial weapons paragraph 40 (d) iii
Indicator number 14 Table #1 of
Annex 1
Delegated Regulation (EU)
2020/1818 (29), Article
12(1) Delegated
Regulation (EU)
2020/1816, Annex II
Immaterial
ESRS 2 SBM-1 Involvement in activities related
to cultivation and production of tobacco
paragraph 40 (d) iv
Delegated Regulation (EU)
2020/1818, Article 12(1)
Delegated Regulation (EU)
2020/1816, Annex II
Immaterial
ESRS E1-1 Transition plan to reach climate
neutrality by 2050 paragraph 14
Regulation (EU)
2021/1119,
Article 2(1)
Material
ESRS E1-1 Undertakings excluded from Paris-
aligned Benchmarks paragraph 16 (g)
Article 449a
Regulation (EU) No 575/2013; Commission
Implementing Regulation (EU) 2022/2453
Template 1: Banking book-Climate Change
transition risk: Credit quality of exposures by
sector, emissions and residual maturity
Delegated Regulation (EU)
2020/1818, Article12.1 (d)
to (g), and Article 12.2
Immaterial, DNO does not
have a transition plan in
line with the Paris
agreement. Thus, only E1-
1 16 (a) is a material
disclosure requirement
ESRS E1-4 GHG emission reduction targets
paragraph 34
Indicator number 4 Table #2 of
Annex 1
Article 449a
Regulation (EU) No 575/2013; Commission
Implementing Regulation (EU) 2022/2453
Template 3: Banking book – Climate change
transition risk: alignment metrics
Delegated Regulation (EU)
2020/1818, Article 6
Material
ESRS E1-5 Energy consumption from fossil
sources disaggregated by sources (only high
climate impact sectors) paragraph 38
Indicator number 5 Table #1 and
Indicator n. 5 Table #2 of Annex 1
Material
ESRS E1-5 Energy consumption and mix
paragraph 37
Indicator number 5 Table #1 of
Annex 1
Material
ESRS E1-5 Energy intensity associated with
activities in high climate impact sectors
paragraphs 40 to 43
Indicator number 6 Table #1 of
Annex 1
Material
ESRS E1-6 Gross Scopes 1, 2, 3 and Total
GHG emissions paragraph 44
Indicators number 1 and 2 Table #1
of Annex 1
Article 449a; Regulation (EU) No 575/2013;
Commission Implementing Regulation (EU)
2022/2453 Template 1: Banking book – Climate
change transition risk: Credit quality of exposures
by sector, emissions and residual maturity
Delegated Regulation (EU)
2020/1818, Article 5(1), 6
and 8(1)
Material
ESRS E1-6 GHG emissions intensity
paragraphs 53 to 55
Indicators number 3 Table #1 of
Annex 1
Article 449a Regulation (EU) No 575/2013;
Commission Implementing Regulation (EU)
2022/2453 Template 3: Banking book – Climate
change transition risk: alignment metrics
Delegated Regulation (EU)
2020/1818, Article 8(1)
Material
ESRS E1-7 GHG removals and carbon credits
paragraph 56
Regulation (EU)
2021/1119,
Article 2(1)
Immaterial
ESRS E1-9 Exposure of the benchmark
portfolio to climate-related physical risks
paragraph 66
Delegated Regulation (EU)
2020/1818, Annex II
Delegated Regulation (EU)
2020/1816, Annex II
DNO will not report on this
in 2024 as it is a phase-in
requirement
ESRS E1-9 Disaggregation of monetary
amounts by acute and chronic physical risk
paragraph 66 (a)
ESRS E1-9 Location of significant assets at
material physical risk paragraph 66 (c).
Article 449a Regulation (EU) No 575/2013;
Commission Implementing Regulation (EU)
2022/2453 paragraphs 46 and 47; Template 5:
Banking book - Climate change physical risk:
Exposures subject to physical risk.
DNO will not report on this
in 2024 as it is a phase-in
requirement
ESRS E1-9 Breakdown of the carrying value of
its real estate assets by energy-efficiency
classes paragraph 67 (c).
Article 449a Regulation (EU) No 575/2013;
Commission Implementing Regulation (EU)
2022/2453 paragraph 34;Template 2:Banking book
-Climate change transition risk: Loans
collateralized by immovable property - Energy
efficiency of the collateral
DNO will not report on this
in 2024 as it is a phase-in
requirement
ESRS E1-9 Degree of exposure of the portfolio
to climate- related opportunities paragraph 69
Delegated Regulation (EU)
2020/1818, Annex II
Immaterial, DNO will not
report on this in 2024 as it
is a phase-in requirement
ESRS E2-4 Amount of each pollutant listed in
Annex II of the E-PRTR Regulation (European
Pollutant Release and Transfer Register)
emitted to air, water and soil, paragraph 28
Indicator number 8 Table #1 of
Annex 1 Indicator number 2 Table
#2 of Annex 1 Indicator number 1
Table #2 of Annex 1 Indicator
number 3 Table #2 of Annex 1
Material
ESRS E3-1 Water and marine resources
paragraph 9
Indicator number 7 Table #2 of
Annex 1
Immaterial
ESRS E3-1 Dedicated policy paragraph 13
Indicator number 8 Table 2 of Annex
1
Immaterial
ESRS E3-1 Sustainable oceans and seas
paragraph 14
Indicator number 12 Table #2 of
Annex 1
Immaterial
ESRS E3-4 Total water recycled and reused
paragraph 28(c )
Indicator number 6.2 Table #2 of
Annex 1
Immaterial
ESRS E3-4 Total water consumption in m 3 per
net revenue on own operations paragraph 29
Indicator number 6.1 Table #2 of
Annex 1
Immaterial
ESRS 2- SBM 3 - E4 paragraph 16 (a) i
Indicator number 7 Table #1 of
Annex 1
Immaterial
ESRS 2- SBM 3 - E4 paragraph 16 (b)
Indicator number 10 Table #2 of
Annex 1
Immaterial
ESRS 2- SBM 3 - E4 paragraph 16 (c)
Indicator number 14 Table #2 of
Annex 1
Immaterial
ESRS E4-2 Sustainable land / agriculture
practices or policies paragraph 24 (b)
Indicator number 11 Table #2 of
Annex 1
Immaterial
ESRS E4-2 Sustainable oceans / seas
practices or policies paragraph 24 (c)
Indicator number 12 Table #2 of
Annex 1
Immaterial
ESRS E4-2 Policies to address deforestation
paragraph 24 (d)
Indicator number 15 Table #2 of
Annex 1
Immaterial
ESRS E5-5 Non-recycled waste paragraph 37
(d)
Indicator number 13 Table #2 of
Annex 1
Material
ESRS E5-5 Hazardous waste and radioactive
waste paragraph 39
Indicator number 9 Table #1 of
Annex 1
Material
ESRS 2- SBM3 - S1 Risk of incidents of forced
labor paragraph 14 (f)
Indicator number 13 Table #3 of
Annex I
Immaterial
ESRS 2- SBM3 - S1 Risk of incidents of child
labor paragraph 14 (g)
Indicator number 12 Table #3 of
Annex I
Immaterial
ESRS S1-1 Human rights policy commitments
paragraph 20
Indicator number 9 Table #3 and
Indicator number 11 Table #1 of
Annex I
Material
ESRS S1-1 Due diligence policies on issues
addressed by the fundamental International
Labor Organization Conventions 1 to 8,
paragraph 21
Delegated Regulation (EU)
2020/1816, Annex II
Material
ESRS S1-1 processes and measures for
preventing trafficking in human beings
paragraph 22
Indicator number 11 Table #3 of
Annex I
Immaterial, forced labor
and child labor are not
material sub-topics under
ESRS S1
Sustainability statement
42
DNO
ESRS S1-1 workplace accident prevention
policy or management system paragraph 23
Indicator number 1 Table #3 of
Annex I
Material
ESRS S1-3 grievance/complaints handling
mechanisms paragraph 32 (c)
Indicator number 5 Table #3 of
Annex I
Material
ESRS S1-14 Number of fatalities and number
and rate of work-related accidents paragraph
88 (b) and (c)
Indicator number 2 Table #3 of
Annex I
Delegated Regulation (EU)
2020/1816, Annex II
Material
ESRS S1-14 Number of days lost to injuries,
accidents, fatalities or illness paragraph 88 (e)
Indicator number 3 Table #3 of
Annex I
Material
ESRS S1-16 Unadjusted gender pay gap
paragraph 97 (a)
Indicator number 12 Table #1 of
Annex I
Delegated Regulation (EU)
2020/1816, Annex II
Material
ESRS S1-16 Excessive CEO pay ratio
paragraph 97 (b)
Indicator number 8 Table #3 of
Annex I
Material
ESRS S1-17 Incidents of discrimination
paragraph 103 (a)
Indicator number 7 Table #3 of
Annex I
Material
ESRS S1-17 Non-respect of UNGPs on
Business and Human Rights and OECD
Guidelines paragraph 104 (a)
Indicator number 10 Table #1 and
Indicator n. 14 Table #3 of Annex I
Delegated Regulation (EU)
2020/1816, Annex II
Delegated Regulation (EU)
2020/1818 Art 12 (1)
Immaterial, forced labor
and child labor are not
material sub-topics under
ESRS S1
ESRS 2- SBM3 – S2 Significant risk of child
labor or forced labor in the value chain
paragraph 11 (b)
Indicators number 12 and n. 13
Table #3 of Annex I
Material
ESRS S2-1 Human rights policy commitments
paragraph 17
Indicator number 9 Table #3 and
Indicator n. 11 Table #1 of Annex 1
Material
ESRS S2-1 Policies related to value chain
workers paragraph 18
Indicator number 11 and n. 4 Table
#3 of Annex 1
Material
ESRS S2-1Non-respect of UNGPs on Business
and Human Rights principles and OECD
guidelines paragraph 19
Indicator number 10 Table #1 of
Annex 1
Delegated Regulation (EU)
2020/1816, Annex II
Delegated Regulation (EU)
2020/1818, Art 12 (1)
Material
ESRS S2-1 Due diligence policies on issues
addressed by the fundamental International
Labor Organization Conventions 1 to 8,
paragraph 19
Delegated Regulation (EU)
2020/1816, Annex II
Material
ESRS S2-4 Human rights issues and incidents
connected to its upstream and downstream
value chain paragraph 36
Indicator number 14 Table #3 of
Annex 1
Material
ESRS S3-1 Human rights policy commitments
paragraph 16
Indicator number 9 Table #3 of
Annex 1 and Indicator number 11
Table #1 of Annex 1
Material
ESRS S3-1 non-respect of UNGPs on
Business and Human Rights, ILO principles or
OECD guidelines paragraph 17
Indicator number 10 Table #1 Annex
1
Delegated Regulation (EU)
2020/1816, Annex II
Delegated Regulation (EU)
2020/1818, Art 12 (1)
Material
ESRS S3-4 Human rights issues and incidents
paragraph 36
Indicator number 14 Table #3 of
Annex 1
Material
ESRS S4-1 Policies related to consumers and
end-users paragraph 16
Indicator number 9 Table #3 and
Indicator number 11 Table #1 of
Annex 1
Immaterial
ESRS S4-1 Non-respect of UNGPs on
Business and Human Rights and OECD
guidelines paragraph 17
Indicator number 10 Table #1 of
Annex 1
Delegated Regulation (EU)
2020/1816, Annex II
Delegated Regulation (EU)
2020/1818, Art 12 (1)
Immaterial
ESRS S4-4 Human rights issues and incidents
paragraph 35
Indicator number 14 Table #3 of
Annex 1
Immaterial
ESRS G1-1 United Nations Convention against
Corruption paragraph 10 (b)
Indicator number 15 Table #3 of
Annex 1
Material
ESRS G1-1 Protection of whistle- blowers
paragraph 10 (d)
Indicator number 6 Table #3 of
Annex 1
Material
ESRS G1-4 Fines for violation of anti-
corruption and anti-bribery laws paragraph 24
(a)
Indicator number 17 Table #3 of
Annex 1
Delegated Regulation (EU)
2020/1816, Annex II)
Material
ESRS G1-4 Standards of anti- corruption and
anti- bribery paragraph 24 (b)
Indicator number 16 Table #3 of
Annex 1
Material
Sustainability statement
Annual Report and Accounts 2024
DNO
43
Responsibility statement
DNO ASA’s consolidated financial statements for the period 1 January to 31 December 2024 have been prepared and presented in
accordance with IFRS Accounting Standards as adopted by the EU and additional disclosure requirements in the Norwegian Accounting
Act. The separate financial statements for DNO ASA for the period 1 January to 31 December 2024 have been prepared in accordance
with the Norwegian Accounting Act and Norwegian accounting standards.
We confirm to the best of our knowledge that the consolidated and separate financial statements for the period 1 January to 31
December 2024 have been prepared in accordance with applicable accounting standards and give a fair view of the assets, liabilities,
financial position and results for the period viewed in their entirety, and that the Board of Directors’ report includes a fair review of any
significant events that arose during the period and their effect on the financial statements, any significant related parties’ transactions
and a description of the significant risks and uncertainties to which the Group and the parent company are exposed. Additionally, we
confirm to the best of our knowledge that the Country-by-Country report as presented in a separate section has been prepared in
accordance with the requirements in the Norwegian Accounting Act.
We further confirm to the best of our knowledge that the 2024 sustainability statement has been prepared in accordance with the
requirements of the Norwegian Accounting Act, European Sustainability Reporting Standards (ESRS) and EU taxonomy regulations.
Oslo, 2 April 2025
Bijan Mossavar-Rahmani
Executive Chairman
Gunnar Hirsti
Deputy Chairman
Elin Karfjell
Director
Anita Marie Hjerkinn Aarnæs
Director
Najmedin Meshkati
Director
Christopher Spencer
Managing Director
Sustainability statement
44
DNO
Consolidated accounts
Annual Report and Accounts 2024
DNO
45
Group company accounts
Consolidated statements of comprehensive income
46
Consolidated cash flow statements
49
Consolidated statements of changes in equity
50
Note disclosures
Note 1
Accounting principles
51
Note 2
Segment information
53
Note 3
Revenues
55
Note 4
Cost of goods sold
57
Note 5
Administrative/Other expenses
58
Note 6
Exploration expenses
60
Note 7
Financial income and financial expenses
61
Note 8
Income taxes
62
Note 9
Intangible assets
65
Note 10
Property, plant and equipment
68
Note 11
Impairments
71
Note 12
Business combinations
75
Note 13
Joint venture
78
Note 14
Inventory
79
Note 15
Other non-current receivables/Trade and receivables
80
Note 16
Cash and cash equivalents
81
Note 17
Equity
82
Note 18
Interest-bearing liabilities
84
Note 19
Lease liabilities
86
Note 20
Asset Retirement obligations
87
Note 21
Other liabilities
88
Note 22
Trade and other payables
88
Note 23
Financial instruments
89
Note 24
Commitments and contingencies
93
Note 25
Earnings per share
94
Note 26
Group companies
95
Note 27
Oil and gas reserves (unaudited)
96
Note 28
Oil and gas license portfolio
98
Note 29
Significant events after the reporting date
102
Parent company accounts
Income statement
104
Balance sheet
104
Cash flow statement
106
Note disclosures
107
Country-by-Country report
118
Auditor’s report
119
Alternative performance measures
130
Glossary and definitions
133
Consolidated accounts
46
DNO
Consolidated statements of comprehensive income
1 January - 31 December
USD million
Note
2024
2023
Revenues
2, 3
Cost of goods sold
4
-406.9
-364.8
Gross profit
Share of profit/loss from Joint Venture
13
Other income/expenses
Administrative expenses
5
-23.5
-23.3
Other operating expenses
5
-2.5
-7.9
Impairment oil and gas assets
11
-146.0
-24.9
Exploration expenses
6
-88.9
-47.7
Net gain on disposal of licenses
21
Operating profit/loss
Financial income
7
Financial expenses
7
-66.7
-112.0
Profit/loss before income tax
-13.3
Tax income/expense
8
-13.8
-132.7
Net profit/loss
-27.1
Other comprehensive income
Currency translation differences
-25.8
-10.9
Items that may be reclassified to profit or loss in later periods, net of tax
-25.8
-10.9
Total other comprehensive income, net of tax
-25.8
-10.9
Total comprehensive income, net of tax
-52.9
Net profit/loss attributable to:
Equity holders of the parent
-27.1
Non-controlling interests
Total comprehensive income attributable to:
Equity holders of the parent
-52.9
Non-controlling interests
Weighted average number of shares outstanding (millions)
Earnings per share, basic (USD per share)
25
-0.03
Earnings per share, diluted (USD per share)
25
-0.03
Consolidated accounts
Annual Report and Accounts 2024
DNO
47
Consolidated statements of financial position
Years ended 31 December
USD million
Note
2024
2023
ASSETS
Non-current assets
Deferred tax assets
8
Goodwill
9
Other intangible assets
9
Property, plant and equipment
10
Investment in Joint Venture
13
Other non-current receivables
15
Total non-current assets
Current assets
Inventories
14
Trade and other receivables
15
Tax receivables
8
Cash and cash equivalents
16
Total current assets
TOTAL ASSETS
EQUITY AND LIABILITIES
Equity
Shareholders' equity
17
Total equity
Non-current liabilities
Deferred tax liabilities
8
Interest-bearing liabilities
18
Lease liabilities
19
Asset retirement obligations
20
Other liabilities
21
Total non-current liabilities
Current liabilities
Trade and other payables
22
Income taxes payable
8
Current interest-bearing liabilities
18
Current lease liabilities
19
Asset retirement obligations
20
Other liabilities
21
Total current liabilities
Total liabilities
TOTAL EQUITY AND LIABILITIES
Consolidated accounts
48
DNO
Bijan Mossavar-Rahmani
Executive Chairman
Oslo, 2 April 2025
Gunnar Hirsti
Deputy Chairman
Elin Karfjell
Director
Anita Marie Hjerkinn Aarnæs
Director
Najmedin Meshkati
Director
Christopher Spencer
Managing Director
Consolidated accounts
Annual Report and Accounts 2024
DNO
49
Consolidated cash flow statements
1 January - 31 December
USD million
Note
2024
2023
Operating activities
Profit/loss before income tax
-13.3
Adjustments to add/deduct(-) non-cash items:
Exploration cost previously capitalized carried to cost
6
Depreciation, depletion and amortization
4
Impairment oil and gas assets
11
Loss/gain(-) on PP&E
10
-3.0
Time value effects receivables
7,15
-11.4
Share of profit/loss in Joint Venture
13
-3.3
-11.9
Amortization of borrowing issue costs
18
Accretion expense on ARO provisions
7,21
Interest expense
7
Interest income
7
-38.1
-36.5
Other
-8.3
-10.0
Changes in working capital items and provisions:
- Inventories
14
-30.8
- Trade and other receivables
15
-46.1
-2.3
- Trade and other payables
22
-23.0
- Provisions for other liabilities and charges
21
-28.7
Cash generated from operations
Income taxes paid
-0.8
-123.1
Tax refund received
Interest received
Interest paid
-53.7
-46.4
Net cash from/used in operating activities
Investing activities
Purchases of intangible assets
-87.2
-114.6
Purchases of tangible assets
-199.8
-163.6
Payments for decommissioning
-4.9
-17.9
Payments for license transactions
12
-84.8
-5.1
Equity contribution into Joint Venture
13
-9.4
-6.9
Dividends from Joint Venture
13
Net cash from/used in investing activities
-354.2
-281.0
Financing activities
Proceeds from borrowings
18
Repayment of borrowings
18
-131.2
Payment of debt issue costs
-5.6
Purchase of treasury shares
17
-50.7
Paid dividend
17
-102.5
-92.0
Payments of lease liabilities
-2.5
-4.3
Net cash from/used in financing activities
-147.0
Net increase/decrease in cash and cash equivalents
-233.9
Cash and cash equivalents at beginning of the period
Exchange gain/losses on cash and cash equivalents
-1.9
-1.9
Cash and cash equivalents at end of the period
16
Of which restricted cash
16
Consolidated accounts
50
DNO
Consolidated statements of changes in equity
Other
comprehensive
income
Currency
Share
Share
translation
Retained
Total
USD million
capital
premium
difference
earnings
equity
Total shareholders' equity as of 31 December 2022
-29.0
Currency translation differences
-10.9
-10.9
Other comprehensive income
-10.9
-10.9
Profit/loss for the period
Total comprehensive income
-10.9
Purchase of treasury shares
-1.1
-49.5
-50.5
Payment of dividend
-91.6
-91.6
Transactions with shareholders
-1.1
-141.1
-142.1
Total shareholders' equity as of 31 December 2023
-39.9
Other
comprehensive
income
Currency
Share
Share
translation
Retained
Total
USD million
capital
premium
difference
earnings
equity
Total shareholders' equity as of 31 December 2023
-39.9
Currency translation differences
-25.8
-25.8
Other comprehensive income
-25.8
-25.8
Profit/loss for the period
-27.1
-27.1
Total comprehensive income
-25.8
-27.1
-52.9
Payment of dividend
-101.9
-101.9
Transactions with shareholders
-101.9
-101.9
Total shareholders' equity as of 31 December 2024
-65.7
Consolidated accounts
Annual Report and Accounts 2024
DNO
51
Note 1
Accounting principles
■
Principal activities and corporate information
The principal activities of the Group are
organized and existing under the laws of
Norwegian Public Limited Liability Companies Act
(“allmennaksjeloven”). The Company was incorporated on 6
August 1971 and its registration number is 921 526 121. The
shares in the Company have been listed on the Oslo Stock
Exchange since 1981, currently under the ticker "DNO". The
Company's registered office is located at
.
■
Statement of compliance
The consolidated financial statements of DNO ASA have been
prepared in accordance with IFRS Accounting Standards as
adopted by the EU and additional disclosure requirements in the
Norwegian Accounting Act, effective as of 31 December 2024.
The consolidated financial statements were approved by the
Board of Directors on 2 April 2025.
■
Basis for preparation
The consolidated financial statements have been prepared on a
historical cost basis.
As permitted by International Accounting
Standard (IAS) 1
Presentation of Financial Statements
conformity with industry practice, the expenses in the
consolidated statements of comprehensive income are presented
as a combination of nature and function as this gives the most
relevant and reliable presentation for the Group.
Due to rounding, the figures in one or more rows or columns
included in the financial statements and notes may not add up to
the subtotals or totals of that row or column.
■
Significant accounting estimates and assumptions
The preparation of the Group’s financial statements requires
management to make judgments, estimates and assumptions that
affect the reported amounts of revenues and expenses, assets
and liabilities, the accompanying disclosures, and the disclosure
of contingent liabilities at the reporting date. Estimates and
assumptions are based on management’s best knowledge and
experience and various other factors that are believed to be
reasonable under the circumstances. Uncertainty about these
estimates and assumptions could result in outcomes that require
a material adjustment to the carrying amount of assets or
liabilities affected in future periods.
The key assumptions concerning the future and other key sources
of estimation uncertainty at the reporting date that have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are
described in the relevant notes throughout this report, see below
for references to notes. The Group based its assumptions and
estimates on parameters available when the Group financial
statements were prepared. However, existing circumstances and
assumptions about future developments may change due to
market changes or circumstances arising beyond the control of
the Group. Such changes are reflected in the assumptions when
they occur.
■
Estimates and assumptions
The key assumptions and key sources of estimation uncertainty
for the Group are described in each of the following notes:
• Entitlement risk associated with operating in Kurdistan (Note 3
and 15);
• Notional corporate income tax/deferred taxation in Kurdistan
(Note 8);
• Impairment assessment of capitalized exploration expenditures
(Note 9);
• Impairment/reversal of oil and gas assets (Note 11);
• Application of the acquisition method for business combinations
(Note 12);
• Estimation of the cost for decommissioning (Note 20);
• Reserves and resources estimates (Note 27).
■
Group accounting and consolidation principles
Basis for consolidation
The consolidated financial statements include the financial
statements of DNO ASA and its subsidiaries. The Company
currently holds a 100 percent interest in all of its subsidiaries.
■
Functional and presentational currency
The consolidated financial statements are presented in USD,
which is also DNO ASA’s functional currency and presentation
currency.
Statements of comprehensive income and statements of cash
flows of subsidiaries and joint operations that have a functional
currency different from the parent company are translated into the
presentation currency at average exchange rates each month.
Statements of financial position items are translated using the
exchange rate at the reporting date, with the translation
differences taken directly to other comprehensive income.
■
Interest in jointly controlled operations (assets)
A joint arrangement is present when DNO holds a long-term
interest which is jointly controlled by DNO and one or more other
parties under a contractual arrangement in which decisions about
the relevant activities require the unanimous consent of the
parties sharing control. Such joint arrangements are classified as
either joint operations or joint ventures.
Joint operations
DNO recognizes its investments in joint operations by reporting its
share of related revenues, expenses, assets, liabilities and cash
flows under the respective items in the Group's financial
statements.
Joint ventures
The Group’s investments in a joint venture are accounted for
using the equity method in accordance with
IAS 28 Investments in
Associates and Joint Ventures
.
■
License acquisitions, farm-in/out and swaps
Individual assessment is made whether the acquisition of an oil
and gas license should be treated as a business combination or
as an asset purchase. Generally, purchase of a license in
development or production phase is regarded as a business
combination, while purchase of a license in the exploration phase
is regarded as an asset purchase.
Consolidated accounts
52
DNO
A farm-in or farm-out of an oil and gas license takes place when
the owner of a working interest (the farmor) transfers all or a
portion of its working interest to another party (the farmee) in
return for an agreed upon consideration and/or action, such as
conducting subsurface studies, drilling wells or developing the
asset. Any cash consideration received directly from the farmee is
credited against costs previously capitalized in relation to the
whole interest with any excess accounted for by the farmor as a
gain on disposal.
In the development or production phase, a farm-in/farm-out
agreement will be treated as a transaction recorded at fair value
as represented by the costs carried by the farmee. Any gain or
loss arising from the farm-in/farm-out is recognized in the
statements of comprehensive income.
License swaps are measured at the fair value of the asset being
exchanged, unless the transaction lacks commercial substance,
or neither the fair value of the asset received, nor divested, can
be reliably measured. In the exploration phase, the Group
normally recognizes license swaps based on historical cost basis.
■
Changes in accounting policies
The accounting policies adopted are consistent with those of the
previous financial year.
Other amendments and interpretations may apply for the first time
in 2024 but are not considered to have any material impact on the
Group’s financial statements.
Consolidated accounts
Annual Report and Accounts 2024
DNO
53
Note 2
Segment information
Accounting policies
Segment information
DNO’s operating segments correspond to its reportable segments. The Company identifies and reports its segments based on the
nature of the risk and return within its business and by the geographical location of the Group’s assets and operations. The segment
information is provided to the senior management and the Board of Directors who are considered to collectively be the Chief
Operating Decision Maker and is used as the basis for allocation of resources and decision making.
The accounting policies of the reporting segments equal those described in these consolidated financial statements. Transfer pricing
between the segments and companies is set using the arm’s length principle in a manner similar to transactions with third parties and
are eliminated at the consolidated level. Segment profit/loss includes profit/loss from inter-segment sales.
The Company reports the following three operating segments: Kurdistan, the North Sea (which includes DNO’s oil and gas activities in
Norway and the UK) and West Africa (which represents DNO’s equity accounted investment in Côte d'Ivoire, see Note 13). Remaining
operating segments are included in the other category based on a materiality assessment. The country-by-country reporting for
companies in extractive industries in line with the Norwegian Accounting Act can be found on page 118 of this report.
USD million
Total
Un-
Full-Year ending
West
reporting
allocated/
Total
31 December 2024
Note
Kurdistan
North Sea
Africa
Other
segments
eliminated
Group
COMPREHENSIVE INCOME INFORMATION
Revenues
3
230.8
436.0
-
-
666.8
-
666.8
Inter-segment sales
-
-
-
-
-
-
-
Production costs
-83.0
-142.6
-
-
-225.6
0.7
-224.9
Movement in overlift/underlift
-
2.1
-
-
2.1
-
2.1
Depreciation, depletion and amortization
-116.7
-64.1
-
-
-180.8
-3.4
-184.1
Cost of goods sold
4
-199.7
-204.5
-
-
-404.2
-2.7
-406.9
Gross profit
31.1
231.5
-
-
262.6
-2.7
259.9
Share of profit/loss from Joint Venture
13
-
-
3.3
-
3.3
-
3.3
Other income
0.3
0.6
-
-
0.9
0.1
1.0
Administrative expenses
5
-0.5
-10.6
-
-1.5
-12.7
-10.8
-23.5
Other operating expenses
5
-1.7
-
-
-0.9
-2.5
-
-2.5
Impairment of oil and gas assets
11
-89.0
-57.0
-
-
-146.0
-
-146.0
Exploration expenses
6
-
-88.9
-
-
-88.9
-
-88.9
Net gain on disposal of licenses
20
-
3.0
-
-
3.0
-
3.0
Operating profit/loss
-59.8
78.4
3.3
-2.4
19.5
-13.4
6.1
Net financial income/expense
7
11.6
-10.3
1.5
1.2
4.0
-23.4
-19.4
Tax income/expense
8
-
-13.8
-
-
-13.8
-
-13.8
Net profit/loss
-48.2
54.3
4.8
-1.2
9.7
-36.8
-27.1
FINANCIAL POSITION INFORMATION
Non-current assets
663.1
902.5
48.8
-
1,614.5
12.1
1,626.6
Current assets
237.4
283.2
-
1.3
521.8
817.7
1,339.5
Total assets
900.5
1,185.7
48.8
1.3
2,136.3
829.8
2,966.1
Non-current liabilities
71.4
705.1
-
-
776.5
755.7
1,532.2
Current liabilities
142.3
177.4
-
8.1
327.8
26.1
353.9
Total liabilities
213.8
882.4
-
8.1
1,104.3
781.8
1,886.1
Consolidated accounts
54
DNO
USD million
Total
Un-
Full-Year ending
West
reporting
allocated/
Total
31 December 2023
Note
Kurdistan
North Sea
Africa
Other
segments
eliminated
Group
COMPREHENSIVE INCOME INFORMATION
Revenues
3
253.2
414.4
-
-
667.5
-
667.5
Inter-segment sales
-
-
-
-
-
-
-
Production costs
-101.7
-122.1
-
-
-223.8
-0.3
-224.1
Movement in overlift/underlift
-
5.6
-
-
5.6
-
5.6
Depreciation, depletion and amortization
-97.0
-45.9
-
-
-143.0
-3.4
-146.4
Cost of goods sold
4
-198.7
-162.4
-
-
-361.1
-3.7
-364.8
Gross profit
54.5
252.0
-
-
306.4
-3.7
302.7
Share of profit/loss from Joint Venture
13
-
-
11.9
-
11.9
-
11.9
Other income
-
1.6
-
-
1.6
-
1.6
Administrative expenses
5
-0.3
-5.3
-
-2.2
-7.8
-15.4
-23.3
Other operating expenses
5
-1.8
-
-
-6.1
-7.9
-
-7.9
Impairment of oil and gas assets
11
-
-24.9
-
-
-24.9
-
-24.9
Exploration expenses
6
-
-47.7
-
-
-47.7
-
-47.7
Operating profit/loss
52.4
181.4
11.9
-8.3
237.4
-19.1
218.3
Net financial income/expense
7
-50.2
-6.7
0.8
0.5
-55.6
-11.4
-67.0
Tax income/expense
8
-
-132.7
-
-
-132.7
-
-132.7
Net profit/loss
2.2
42.1
12.7
-7.9
49.1
-30.5
18.6
FINANCIAL POSITION INFORMATION
Non-current assets
855.1
639.0
67.9
-
1,562.0
14.2
1,576.2
Current assets
219.2
334.4
-
3.3
556.9
505.2
1,062.1
Total assets
1,074.3
973.4
67.9
3.3
2,118.9
519.4
2,638.3
Non-current liabilities
69.8
508.3
-
-
578.1
410.3
988.4
Current liabilities
67.3
189.9
-
7.9
265.1
150.0
415.1
Total liabilities
137.0
698.2
-
7.9
843.2
560.3
1,403.5
Consolidated accounts
Annual Report and Accounts 2024
DNO
55
Note 3
Revenues
Accounting policies
Revenues
Revenues presented in the consolidated statements of comprehensive income consist of Revenue from contracts with customers.
Revenue from contracts with customers is recognized when the customer obtains control of the oil and gas, which normally will be
when title passes at the point of delivery, based on the contractual terms of the agreements.
In general, the revenues from the Group’s production of oil and gas are recognized on the basis of volumes lifted and sold to
customers during the period (the sales method).
Tariff income from processing of oil and gas is related to the North Sea segment and is recognized as earned.
Revenue recognition in Kurdistan
During 2024 and most of 2023, revenues in Kurdistan were generated from local sales and recognized on the basis of volumes lifted
and sold to customers during the period. Local deliveries are prepaid by the buyers directly to DNO.
Export revenues in Kurdistan were in the first three months of 2023 generated through the sale of oil produced from the Tawke and
the Baeshiqa licenses which was exported by the pipeline through Türkiye. Title to the oil was considered to have passed on delivery
of oil to the export pipeline at Fish Khabur terminal. Revenues generated from export sales were recognized on the basis of invoiced
oil sales following monthly deliveries to the KRG. Based on business practice, the KRG was responsible for exporting the oil
produced in Kurdistan and it is assessed that DNO has a customer relationship with the KRG. The price for export oil deliveries to
the KRG was based on Brent prices with adjustments for oil quality and transportation fees.
Entitlement risk associated with operating in Kurdistan
DNO has interests in two licenses in Kurdistan through Production Sharing Contracts (PSCs) and has based its entitlement
calculations on the terms of these PSCs.
The Company notes from public reports that on 15 February 2022, the Federal Supreme Court of Iraq (FSCI) ruled on two matters,
one stemming back to 2012 and another related matter dating back to 2019. Reportedly, the FSCI found amongst other things that
the Kurdistan Oil and Gas Law No. 27/2007 (KOGL) is unconstitutional, that the KRG is to hand over all oil production from areas
located in the Kurdistan region of Iraq (KRI) to the Federal Government of Iraq (FGI) and that the FGI has the right to pursue the
nullity of the oil contracts concluded by the KRG. DNO was not a party to these proceedings. Further, DNO learned via media reports
that on 4 July 2022, the Karkh commercial court in Baghdad ruled that PSCs signed between the KRG and four international oil
companies (including DNO) should be voided. Similar cases were reported as regards four other international oil companies over the
ensuing weeks. Media then reported that on 21 August 2022, the KRG filed third party objections to the reported 2022 Baghdad court
rulings including those understood to concern DNO. On 18 December 2024, it was reported that the Karkh Court of Appeal ruled in
favor of inter alia the KRG, confirming that the PSCs in question were valid. That ruling was also reported appealed by the FGI,
however, on 22 January 2025, DNO learnt, again from media reports, that the Court of Cassation dismissed the FGI’s appeal and
thus confirmed that the PSCs are valid. On 27 February 2025, there were reports that the FGI had requested a correction of the
rulings of the Court of Cassation. The Company notes reports that this process does not allow the FGI to introduce new evidence or
arguments; it merely seeks to correct perceived errors in the Court of Cassation’s ruling. As far as the Company is aware, that
process is still pending. Throughout the period when these cases were pending, the KRG issued repeated assurances that the PSCs
remain valid and there were also several rulings in Erbil courts affirming the validity of the PSCs. In 2014, the FGI initiated an
arbitration case against the Government of Türkiye and its state-owned pipeline operator BOTAS relating to the ITP. Following an
arbitration ruling which became publicly known on or around 24 March 2023, and which were in parts in favor of Iraq, the ITP was
closed on 25 March 2023. As of the reporting date, the ITP remains closed, despite Türkiye’s announcement in October 2023 that
the ITP is ready to resume operations. Timing of export resumption is uncertain. Consequently, DNO initiated cost reduction
measures in Kurdistan and commenced local sales on a cash and carry basis, where the oil is transported by traders by road tanker
or pipelined to local refineries. The contractor entities’ entitlement is sold by DNO. Varying by contract, local selling prices were in the
mid USD 30s per barrel during 2024, significantly lower than the international prices previously achieved through pipeline export.
However, all local deliveries are prepaid by the buyers directly to DNO, eliminating counterparty credit risk.
The FGI’s 2023-2025 Federal Iraqi Budget Law (Budget Law) entered into force in June 2023. The details of FGI-KRG budget
allocations, implementation of the Budget Law and the monetary size of the budget transfers to the KRG are not clear to DNO. DNO
notes however that on 2 February 2025, the Iraqi Parliament approved amendments of the Budget Law. There have been several
media reports that indicate that the Budget Law amendment may enable restart of export of Kurdish oil through the ITP. DNO and
other member companies of the Association of the Petroleum Industry of Kurdistan (APIKUR ) have repeatedly stated that they are
prepared to resume exports, contingent upon reaching agreements that provide for payment surety for past and future exports, direct
payment and preservation of the legal, commercial and economic terms of their production sharing contracts (Conditions).
Consolidated accounts
56
DNO
It is unclear to the Company how implementation of the amended Budget Law can facilitate satisfaction of the Conditions. It is also
not clear how the KRG and the FGI will address these matters beyond 2025. To date, DNO continues its operations in Kurdistan, and
developments are closely monitored.
Due to the disagreements between the FGI and the KRG, economic conditions in Kurdistan and limited oil export channels, DNO has
historically faced constraints in fully monetizing the oil it produces in Kurdistan. There is no guarantee that oil can be exported or sold
locally in sufficient quantities or at prices required to sustain DNO’s operations and investment plans or that the Group will promptly
receive its full entitlement payments for any oil it delivers for export if the ITP reopens. Export sales have not always followed the
PSC terms. Furthermore, there has also previously been uncertainty related to receipt of payments for oil sold to the KRG but
notwithstanding sometimes lengthy delays, payments have ultimately been received by DNO.
At yearend 2024, the Company was owed a total of USD 298.1 million, excluding any interest, by the KRG mainly related to export
oil sales to the KRG for the months October 2022 through March 2023. These receivables are past due (see Note 15). The KRG has
repeatedly stated that it is and remains committed to its PSCs. Timing of export resumption and payments for previous oil sales by
the KRG is uncertain. The Company continues to engage with the KRG regarding recovery of the arrears and payment terms and
conditions for any future oil exports.
The Company’s PSCs include rights for the host government to audit the PSC accounts which may impact the Company’s recovery
of costs and financial results. During 2024 in Kurdistan, such audits were carried out with respect to the Baeshiqa 2018-2019
Accounts and the Tawke 2021 Accounts.
1 January - 31 December
Total
USD million
2024
2023
2024
2023
2024
2023
Sale of oil
230.8
253.2
265.2
253.0
496.0
506.2
Sale of gas
-
-
138.5
137.3
138.5
137.3
Sale of natural gas liquids (NGL)
-
-
26.9
21.6
26.9
21.6
Tariff income
-
-
5.4
2.4
5.4
2.4
Total revenues from contracts with customers
230.8
253.2
436.0
414.4
666.8
667.5
Sale of oil (bopd)
18,222
14,806
8,704
8,049
26,926
22,856
Sale of gas (boepd)
-
-
5,511
4,746
5,511
4,746
Sale of natural gas liquids (NGL) (boepd)
-
-
1,575
1,282
1,575
1,282
Total sales volume (boepd)
18,222
14,806
15,790
14,078
34,011
28,885
Prior to the ITP closure in March 2023, DNO generated revenues in Kurdistan through the sale of oil produced from the Tawke and the
Baeshiqa licenses which were exported by pipeline through Türkiye. Following closure of the ITP, the Company gradually resumed
operations at the Tawke license and has been selling oil to local trading companies in Kurdistan since late Q2 2023.
Consolidated accounts
Annual Report and Accounts 2024
DNO
57
Note 4
Cost of goods sold
Accounting policies
Cost of goods sold
Lifting costs and Tariff and transportation expenses
Lifting costs consist of expenses related to the production of oil and gas, including operation and maintenance of installations, well
intervention activities and insurances. Tariff and transportation expenses consist of charges incurred by the Group in the North Sea
for the use of infrastructure owned by other companies. Lifting costs and Tariff and transportation expenses are recognized based on
the Group’s paying interest in the oil and gas licenses.
Movement in overlift/underlift
A liability (overlift, see Note 22) arises when the Group sells more than its share of the oil and gas production. Similarly, an asset
(underlift, see Note 15) arises when the sale is less than the Group’s share of the oil and gas production. In general, the
overlift/underlift balances are valued at production cost including depreciation (the sales method). The movements in overlift/underlift
are presented as an adjustment to Cost of goods sold.
Depreciation, depletion and amortization
Capitalized costs for oil and gas assets are depreciated using the unit-of-production (UoP) method. See Note 10 for more details.
1 January - 31 December
USD million
2024
2023
Lifting costs
-175.5
-191.7
Tariff and transportation expenses
-49.4
-32.4
Production costs based on produced volumes
-224.9
-224.1
Movement in overlift/underlift
2.1
5.6
Production costs based on sold volumes
-222.7
-218.4
Depreciation, depletion and amortization
-184.1
-146.4
Total cost of goods sold
-406.9
-364.8
Consolidated accounts
58
DNO
Note 5
Administrative/Other expenses
Accounting policies
Pensions and share-based payments
Pensions
The Group’s pension obligations in Norway are limited to certain defined contribution plans which are paid to pension insurance
plans and charged to profit or loss in the period in which they are incurred. Once the contributions are paid there are no further
obligations.
Share-based payments
Cash-settled share-based payments are recognized in the income statement as expenses during the vesting period and as a liability.
The liability is measured at fair value and revaluated using the Black & Scholes pricing model at each balance sheet date and at the
date of settlement, with any change in the fair value recognized in the income statement for the period.
1 January - 31 December
USD million
2024
2023
Salaries, bonuses, etc.
-50.3
-53.1
Employer's payroll tax expenses
-6.8
-7.6
Pensions
-4.2
-4.6
Other personnel costs
-7.0
-4.3
General and administration expenses
-27.7
-27.8
Reallocation of salaries and social expenses to lifting costs and exploration costs/PP&E and intangible assets
72.5
74.1
Total administrative expenses
-23.5
-23.3
Other expenses
-2.5
-7.9
Total other operating expenses
-2.5
-7.9
Salaries and social expenses directly attributable to license activities are reclassified to lifting costs and exploration costs, or tangible
assets and capitalized exploration.
DNO has a defined contribution scheme for its Norway-based employees, with USD 4.2 million expensed in 2024 (USD 4.6 million in
2023). The Group’s obligations are limited to the annual pension contributions. DNO meets the Norwegian legal requirements for
mandatory occupational pension
(“obligatorisk tjenestepensjon”).
At yearend 2024, the Company’s liability for synthetic shares as part of other variable remuneration amounted to USD 8.4 million (USD
5.0
million at yearend 2023). For more information about remuneration to senior management, see Note 3 in the parent company
accounts.
Movement in synthetic Company shares during the year
1 January - 31 December
Number of shares
2024
2023
Outstanding as of 1 January
10,829,494
11,453,638
Granted during the year
3,553,754
4,288,935
Forfeited/reversed during the year
809,584
624,141
Settled during the year
576,473
4,288,938
Outstanding as of 31 December
12,997,191
10,829,494
Unrestricted as of 31 December
690,043
1,032,058
Weighted average remaining contractual life for the synthetic shares (years)
2.12
2.54
Weighted average settlement price for synthetic shares settled during the year (NOK)
10.66
10.20
Settlement price for synthetic shares at the end of the year (NOK)
10.47
10.70
Consolidated accounts
Annual Report and Accounts 2024
DNO
59
Remuneration to Board of Directors and senior management
1 January - 31 December
USD million
2024
2023
Managing Director
Salary
-0.65
-0.58
Bonus
-0.12
-0.16
Pension
-0.02
-0.02
Other remuneration
-0.13
-0.41
Remuneration to Managing Director
-0.92
-1.17
Other senior management
Salary
-3.59
-1.69
Bonus
-0.47
-0.40
Pension
-0.17
-0.06
Other remuneration
-0.79
-0.78
Remuneration to other senior management
-5.02
-2.93
Total remuneration to senior management
-5.95
-4.09
Number of managers included
11
5
Total remuneration to Board of Directors
-1.59
-1.61
Total remuneration to Board of Directors and senior management
-7.54
-5.71
The list of leading personnel, now referred to as senior management, has been expanded compared to the previous year.
Shares and options held by Board of Directors and senior management
Years ended 31 December
Directors and senior management
Shares
Options
Shares
Options
Bijan Mossavar-Rahmani, Executive Chairman*
125,683,241
-
125,683,241
-
Gunnar Hirsti, Deputy Chairman (Hirsti Invest AS)
350,000
-
350,000
-
Elin Karfjell, Director (Elika AS)
33,000
-
33,000
-
Anita Marie Hjerkinn Aarnæs, Director
-
-
-
-
Najmedin Meshkati, Director
-
-
-
-
Chris Spencer, Managing Director (Chris's Corporation AS)
32,000
-
32,000
-
Haakon Sandborg, Chief Financial Officer
-
-
-
-
Geir Arne Skau, Chief Human Resources and Corporate Services Officer
75,000
-
50,750
-
Sameh Hanna, General Manager Kurdistan region of Iraq
-
-
-
-
Linn Hoel, Chief Commercial Officer
-
-
-
-
Erlend Wollan Einum, Chief Business Development Officer
-
-
-
-
Elisabeth Femsteinevik, General Manager North Sea
-
-
-
-
Tonje Pareli Gormley, General Counsel - Middle East
-
-
-
-
Erling Moen Synnes, Chief Information Officer
-
-
-
-
Wieske Paulissen, Group Head of Exploration and Subsurface
-
-
-
-
Kjersti Kaurin, Corporate Counsel and Secretary
-
-
-
-
* Bijan Mossavar-Rahmani held interests in the Company through nominee accounts held by Goldman Sachs & Co. LLC, representing 12.89 percent of the
Senior management and the members of the Board of Directors have been awarded synthetic shares during the year as part of their
variable remuneration, see Note 3 in the parent company accounts.
Consolidated accounts
60
DNO
Auditor fees
1 January - 31 December
USD million (excluding VAT)
2024
2023
Auditor fees
-0.65
-0.65
Other financial auditing
-0.03
-0.03
Tax advisory services
-0.08
-0.16
Other advisory services
-
-
Total auditor fees
-0.76
-0.84
Note 6
Exploration expenses
Accounting policies
Exploration expenses
The Group uses the successful efforts method to account for its exploration and evaluation assets. All exploration costs (including
purchase of seismic, geological and geophysical costs and general and administrative costs), except for acquisition costs of licenses
and drilling costs of exploration wells, are expensed as incurred.
Acquisition costs of licenses and drilling costs of exploration wells are temporarily capitalized pending the determination of oil and
gas resources. These costs include directly attributable employee remuneration, materials and fuel used, rig costs and payments to
contractors. Continued capitalization of such costs is assessed for impairment at each reporting date. The main criterion is that there
must be plans for future activity in the license or that a development decision is expected in the near future. If reserves or resources
are not found, or if discoveries are assessed not technically or commercially recoverable, the costs of exploration wells and licenses
are expensed. Furthermore, 3D seismic cost over a discovery area is capitalized when the objective is to learn more about the
reservoir and to support the determination of new well locations within the discovery area.
1 January - 31 December
USD million
2024
2023
Exploration expenses (G&G and field surveys)
-16.5
-15.0
Seismic costs
-16.5
-9.9
Exploration expenses capitalized in previous years carried to cost
-0.8
-
Exploration expenses capitalized during the year carried to cost
-36.8
-6.0
Other exploration expenses
-18.3
-16.8
Total exploration expenses
-88.9
-47.7
Exploration expenses in 2024 were related to exploration activities in the North Sea, including expensing of exploration wells (Falstaff
prospect in the Falstaff/Othello well and Angel and Hummer wells). Exploration expenses in 2023 were related to exploration activities in
the North Sea, including expensing of exploration wells (Eggen and Litago wells).
Consolidated accounts
Annual Report and Accounts 2024
DNO
61
Note 7
Financial income and financial expenses
Accounting policies
Financial income and expenses
Accretion expenses from unwinding of the discount related to the ARO provision and lease liability are further detailed in Notes 19
and Note 20. Accounting effects from IFRS 9 (expected credit loss model) assessment related to the KRG arrears is further detailed
in Note 15.
1 January - 31 December
USD million
2024
2023
Interest income
38.1
36.5
Currency exchange gains recognized in the income statement (net)
9.2
8.4
Other financial income
-
0.1
Financial income
47.3
45.0
Interest expenses
-54.3
-44.6
Capitalized interest
4.1
-
Time value effect trade debtors (Note 14)
11.6
-44.3
Amortization of borrowing issue costs
-3.8
-3.3
Accretion expense ARO (unwinding of discount rate, Note 20)
-20.4
-17.4
Currency exchange loss recognized in the income statement (net)
-0.0
-
Other financial expenses
-3.9
-2.3
Financial expenses
-66.7
-112.0
Net financial income/expenses
-19.4
-67.0
Consolidated accounts
62
DNO
Note 8
Income taxes
Accounting policies
Income taxes
Tax income/expense consists of taxes receivable/payable and changes in deferred taxes. Taxes receivable/payable are based on
the amount receivable from or payable to the tax authorities. Deferred tax liability is calculated on all taxable temporary differences
unless there is a recognition exception. A deferred tax asset is recognized only to the extent that it is probable that the future taxable
income will be available against which the asset can be utilized. Unrecognized deferred tax assets are reassessed at each reporting
date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be
recovered. Deferred tax assets and deferred tax liabilities are recognized at their nominal value and classified as non-current
assets/liabilities in the statements of financial position. Tax payable and deferred tax are recognized directly in the equity to the
extent that they relate to items charged directly to equity.
Estimation uncertainty: Notional corporate income tax/deferred taxation in Kurdistan
DNO’s PSCs in Kurdistan provide that the corporate income tax to which the contractor is subject is deemed to have been paid to the
government as part of the payment of profit oil to the government or its representatives. Current and deferred taxation arising from
such notional corporate income tax is not calculated for Kurdistan, as there is uncertainty related to the tax laws of the KRG and
there is currently no well-established tax regime for international oil companies. As such, it has not been possible to reliably measure
such notional corporate income taxes deemed to have been paid on behalf of the Company’s subsidiary, DNO Iraq AS. For
accounting purposes, if such notional income tax is to be classified as income tax in accordance with IAS 12
Income Taxes
, the
Group would present this as an income tax expense with a corresponding increase in revenues. Furthermore, it would be assessed
whether any deferred tax asset or liability is required to be recognized equal to the difference between book values and the tax
values of the qualifying assets and liabilities, multiplied by the applicable tax rate.
Tax income/expense
1 January - 31 December
USD million
2024
2023
Changes in deferred taxes
-57.9
-125.8
Income taxes receivable/payable
44.1
-6.9
Total tax income/expense (-)
-13.8
-132.7
Income tax receivable/payable
Years ended 31 December
USD million
2024
2023
Tax receivables
27.5
-
Income taxes payable
-
-4.6
Net tax receivable/payable (-)
27.5
-4.6
Consolidated accounts
Annual Report and Accounts 2024
DNO
63
The tax balances relate to the activity on the Norwegian Continental Shelf (NCS) and the UK Continental Shelf (UKCS).
During 2024, DNO paid net USD 0.8 million in taxes in Norway related to taxable profits in 2023.
Reconciliation of tax income/expense
1 January - 31 December
USD million
2024
2023
Profit/loss before income tax
-13.3
151.3
Expected income tax according to nominal tax rate in Norway, 22 percent
-66.0
8.0
Expected income tax according to nominal petroleum tax rate in Norway, 78 percent
3.6
-136.8
Expected income tax according to nominal tax outside Norway
13.1
0.0
Taxes paid in kind under PSCs
-0.4
-
Exploration tax refund NCS
9.1
-
Foreign exchange variations between functional and tax currency
-11.9
-6.8
Adjustment of previous years
-1.2
0.3
Adjustment of deferred tax assets not recognized
63.3
-1.1
Change in previous years
-0.1
-
Other items including other permanent differences
-25.0
3.7
Change in tax rate
1.7
-
Tax income/expense (-)
-13.8
-132.7
Effective income tax rate
-103.8%
-87.7%
Taxes charged to equity
-
-
Adjustment of deferred tax assets not recognized mainly relates to initial recognition of tax losses from the acquisition of Arran (USD
61.7 million). Other items above consist mainly of permanent differences on impairments which are not tax deductible, and permanent
differences on tax exempted profits/losses from upstream activities outside of Norway carried out by the Company’s Norwegian
subsidiaries.
Tax effects on temporary differences
Years ended 31 December
USD million
2024
2023
Tangible assets
-399.2
-275.9
Intangible assets (including capitalized exploration expenses)
-166.8
-145.4
ARO provisions
298.2
238.0
Losses carried forward
214.8
174.4
Non-deductible interests carried forward
23.0
25.7
Other temporary differences
2.7
-0.6
Net deferred tax assets/liabilities
-27.3
16.2
Valuation allowance
-190.3
-208.6
Net deferred tax assets/liabilities (-)
-217.6
-192.4
Recognized deferred tax assets
39.6
-
Recognized deferred tax liabilities
-257.2
-192.4
A valuation allowance was recognized relating to carried forward losses in Norway (ordinary tax regime, USD 93.7 million) and the UK
(USD 96.6 million) due to the uncertainty regarding future taxable profits.
Profits/losses by Norwegian companies from upstream activities outside of Norway are not taxable/deductible in Norway in accordance
with the General Tax Act, section 2-39. Under these rules, only certain financial income and expenses are taxable in Norway.
There are no tax consequences attached to items recorded in other comprehensive income.
The following nominal tax rates apply in the jurisdictions where the subsidiaries of the Group are taxable: Ordinary tax regime in Norway
(22 percent), the NCS (78 percent), ordinary tax regime in the UK (25 percent), the UKCS (40 percent) and UAE (9 percent).
Additionally, in the UK, Energy Profits Levy (EPL) applies which is a 38 percent temporary levy on oil and gas ringfenced profits,
adjusted for decommissioning spend.
Consolidated accounts
64
DNO
Reconciliation of change in deferred tax assets/liabilities
Years ended 31 December
USD million
2024
2023
Net deferred tax assets/liabilities at 1 January
-192.4
-62.4
Change in deferred taxes in the income statement
-57.9
-125.8
Deferred taxes related to business combinations and other transactions
9.9
1.3
Currency and other movements
22.8
-5.5
Net deferred tax assets/liabilities (-) at 31 December
-217.6
-192.4
Reconciliation of change in tax receivable/payable
Years ended 31 December
USD million
2024
2023
Net tax receivable/payable at 1 January
-4.6
-99.9
Tax receivable/payable related to transactions posted directly to balance sheet
-12.2
0.1
Tax receivable/payable in the income statement
44.1
-6.9
Tax payment/refund
0.8
89.5
Currency and other movements
-0.6
12.6
Net tax receivable/payable (-) at 31 December
27.5
-4.6
Pillar Two
DNO is subject to OECD Pillar Two model rules, with Norway and the UK having enacted legislation applicable from 1 January 2024.
There is still some uncertainty regarding the detailed application of these rules, but based on our current assessment, we do not expect
any material impact on DNO’s financial position or tax obligations.
Consolidated accounts
Annual Report and Accounts 2024
DNO
65
Note 9
Intangible assets
Accounting policies
Intangible assets
General
Intangible assets are stated at cost, less accumulated amortization and accumulated impairment charges. Intangible assets include
acquisition costs for oil and gas licenses, expenditures on the exploration for oil and gas resources, technical goodwill and other
intangible assets. Goodwill is not depreciated.
The useful lives of intangible assets are assessed as either finite or infinite. Amortization of intangible assets is based on the
expected useful economic life and assessed for impairment whenever there is an indication that the intangible asset might be
impaired. The impairment assessment of intangible assets with infinite lives is undertaken annually or more often if indicators exist.
Goodwill
The goodwill that is recognized by the Group is related to technical goodwill and is recognized due to the requirement to recognize
deferred tax for the difference between the assigned fair values and the related tax base. Although not an IFRS term, “technical
goodwill” is commonly used in the oil and gas industry to describe a category of goodwill arising as an offsetting amount to deferred
tax recognized in business combinations. There are no specific IFRS guidelines about the allocation of technical goodwill, and the
Group has therefore applied the general guidelines for allocating goodwill. In general, technical goodwill is allocated to a cash-
generating unit (CGU) or group of CGUs that give rise to the technical goodwill, while any residual goodwill may be allocated across
all CGUs based on facts and circumstances in the business combination.
Exploration and evaluation assets
The Group uses the successful efforts method to account for its exploration and evaluation assets. Acquisition costs of licenses and
drilling costs of exploration wells are temporarily capitalized pending the determination of oil and gas resources. These costs include
directly attributable employee remuneration, materials and fuel used, rig costs and payments to contractors. Continued capitalization
of such costs is assessed for impairment at each reporting date. The main criterion is that there must be plans for future activity in
the license or that a development decision is expected in the near future. If reserves or resources are not found, or if discoveries are
assessed not technically or commercially recoverable, the costs of exploration wells and licenses are expensed. Furthermore, 3D
seismic costs over a discovery area is capitalized when the objective is to learn more about the reservoir and to support the
determination of new well locations within the discovery area.
Estimation uncertainty: Impairment assessment of capitalized exploration expenditures
The Group’s accounting policy is to temporarily capitalize drilling expenditures related to exploration wells, pending an evaluation of
potential oil and gas discoveries. If resources are not discovered, or if recovery of the resources is not considered technically or
commercially viable, the costs of the exploration wells are expensed in the income statement. Decisions as to whether an exploration
well should remain capitalized or expensed during the period may have a material effect on the financial results for the period.
Consolidated accounts
66
DNO
INTANGIBLE ASSETS
Total Other
License
Exploration
intangible
2024 - USD million
Goodwill
interest
assets
Other
assets
Total
As of 1 January 2024
Acquisition costs
397.5
97.8
443.2
15.8
556.9
954.4
Accumulated impairments
-354.3
-8.8
-262.1
-
-270.9
-625.2
Accumulated depreciation
-
-71.1
-
-12.8
-83.9
-83.9
Net book amount
43.2
18.0
181.1
3.0
202.1
245.2
Period ended 31 December 2024
Opening net book amount
43.2
18.0
181.1
3.0
202.1
245.2
Translation differences
-6.3
-0.1
-23.2
-0.4
-23.7
-30.0
Additions
-
-
87.9
-
87.9
87.9
Additions through business combinations
113.8
-
-
-
-
113.8
Transfers
-
-
-
-
-
-
Exploration cost previously capitalized carried to cost
-
-
-35.9
-
-35.9
-35.9
Impairments
-47.7
-
-
-
-
-47.7
Depreciation
-
-1.1
-
-0.8
-1.9
-2.0
Closing net book amount
102.1
16.7
209.9
1.8
228.5
330.6
As of 31 December 2024
Acquisition costs
466.5
97.6
484.4
15.5
597.5
1,064.0
Accumulated impairments/exploration write-offs
-364.4
-8.7
-274.5
-
-283.1
-647.5
Accumulated depreciation
-
-72.2
-
-13.7
-85.9
-85.9
Net book amount
102.1
16.7
209.9
1.8
228.5
330.6
Depreciation method
UoP
Linear (3-7 years)
Consolidated accounts
Annual Report and Accounts 2024
DNO
67
INTANGIBLE ASSETS
Total Other
License
Exploration
intangible
2023 - USD million
Goodwill
interest
assets
Other
assets
Total
As of 1 January 2023
Acquisition costs
407.2
97.5
335.3
15.4
448.2
855.4
Accumulated impairments/exploration write-offs
-351.1
-8.8
-260.5
-
-269.3
-620.3
Accumulated depreciation
-
-70.1
-
-11.7
-81.8
-81.8
Net book amount
56.1
18.7
74.8
3.8
97.2
153.3
Period ended 31 December 2023
Opening net book amount
56.1
18.7
74.8
3.8
97.2
153.3
Translation differences
-1.9
0.3
1.4
-
1.7
-0.3
Additions
-
-
114.2
0.4
114.6
114.6
Transfers*
-
-
-3.3
-
-3.3
-3.3
Exploration cost previously capitalized carried to cost
-
-
-6.0
-6.0
-6.0
Impairments
-11.0
-
-
-
-
-11.0
Depreciation
-
-1.0
-
-1.2
-2.2
-2.2
Closing net book amount
43.2
17.9
181.1
3.0
202.1
245.3
As of 31 December 2023
Acquisition costs
397.5
97.8
443.2
15.8
556.8
954.3
Accumulated impairments/exploration write-offs
-354.3
-8.8
-262.1
-
-270.9
-625.2
Accumulated depreciation
-
-71.1
-
-12.8
-83.9
-83.9
Net book amount
43.2
18.0
181.1
3.0
202.1
245.3
Depreciation method
UoP
Linear (3-7 years)
* Transfers were related to reclassification of the book value of the Fenja license from exploration phase (intangible assets) to development phase (tangible assets).
Consolidated accounts
68
DNO
Note 10
Property, plant and equipment
Accounting policies
Property, plant and equipment (PP&E)
General
PP&E are recognized at historical cost and adjusted for depreciation, depletion and amortization (DD&A) and impairment charges.
Depreciation of PP&E other than oil and gas assets are generally depreciated on a straight-line basis over expected useful lives,
normally varying from three to seven years. Expected useful lives are reviewed at each balance sheet date and, where there are
changes in estimates, depreciation periods are changed accordingly.
Exploration and development costs
Capitalized exploration expenditures are classified as intangible assets and reclassified to tangible assets (i.e., PP&E) at the start of
the development. For accounting purposes, an oil and gas field is considered to enter the development phase when the technical
feasibility and commercial viability of extracting oil and gas from the field are demonstrable. All costs of developing commercial oil
and gas fields are capitalized, including indirect costs. Capitalized development costs are classified as tangible assets.
Acquired license rights are recognized as intangible assets at the time of acquisition. Acquired license rights related to fields in the
exploration phase remain as intangible assets when the related fields enter the development or production phase. Furthermore, 3D
seismic cost over a discovery area is capitalized when the objective is to learn more about the reservoir and to support the
determination of new well locations within the discovery area.
Oil and gas assets in production
Capitalized costs for oil and gas assets are depreciated using the UoP method. The rate of depreciation is equal to the ratio of oil
and gas production for the period over the estimated remaining 2P reserves at the beginning of the period. The future development
expenditures necessary to bring those reserves into production are included in the basis for depreciation and are estimated by the
management based on current period end un-escalated price levels. The reserve basis used for depreciation purposes is updated at
least once a year. Any changes in the reserves affecting UoP calculations are reflected prospectively. Reserves and resources,
along with associated estimation uncertainty, are described in detail in Note 27.
Right-of-use (RoU) asset
s
The RoU assets in the balance sheet are mainly related to office rent and are measured to cost, less any accumulated depreciation
and impairment losses, and adjusted for any remeasurement of lease liabilities. The RoU assets are depreciated linearly over the
lifetime of the related lease contract. For measurement of lease liabilities, see Note 19. In the consolidated statements of
comprehensive income, operating lease costs, relating to contracts that contain a lease, are replaced by depreciation and interest
expense.
Consolidated accounts
Annual Report and Accounts 2024
DNO
69
PROPERTY, PLANT AND EQUIPMENT
Total
Development
Production
oil & gas
Other
RoU
2024 - USD million
assets
assets
assets
PP&E
assets
Total
As of 1 January 2024
Acquisition costs
286.7
3,304.6
3,591.3
14.9
45.1
3,651.3
Accumulated impairments
-137.5
-345.0
-482.6
-0.1
-
-482.7
Accumulated depreciation
-
-1,993.3
-1,993.3
-13.6
-28.5
-2,035.4
Net book amount
149.1
966.3
1,115.4
1.3
16.3
1,133.2
Period ended 31 December 2024
Opening net book amount
149.1
966.3
1,115.4
1.3
16.3
1,133.2
Translation differences
-19.7
-29.4
-49.2
-0.1
-0.3
-49.5
Additions*
113.9
111.0
224.9
1.2
0.3
226.4
Business combinations
28.4
84.1
112.5
-
-
112.5
Transfers**
-
-
-
-
-
-
Impairments (net)
-
-98.3
-98.3
-
-
-98.3
Depreciation
-
-179.5
-179.5
-0.7
-3.8
-184.1
Closing net book amount
271.6
823.3
1,094.9
1.6
12.7
1,109.4
As of 31 December 2024
Acquisition costs
399.2
3,344.2
3,743.4
15.1
32.0
3,790.6
Accumulated impairments
-127.6
-412.0
-539.5
-
-
-539.5
Accumulated depreciation
-
-2,109.0
-2,109.0
-13.5
-19.2
-2,141.7
Net book amount
271.7
823.3
1,094.9
1.6
12.8
1,109.4
Depreciation method
UoP
Linear (3-7 years)
* Includes changes in estimate of asset retirement, see Note 21.
Consolidated accounts
70
DNO
PROPERTY, PLANT AND EQUIPMENT
Total
Development
Production
oil & gas
Other
RoU
2023 - USD million
assets
assets
assets
PP&E
assets
Total
As of 1 January 2023
Acquisition costs
358.3
3,072.1
3,430.5
14.3
34.2
3,479.0
Accumulated impairments
-140.6
-332.0
-472.6
-0.1
-
-472.7
Accumulated depreciation
-
-1,861.0
-1,861.0
-13.1
-23.3
-1,897.4
Net book amount
217.7
879.1
1,096.9
1.1
10.9
1,108.9
Period ended 31 December 2023
Opening net book amount
217.7
879.1
1,096.9
1.1
10.9
1,108.9
Translation differences
-4.4
-4.4
-8.9
-0.1
-1.1
-10.1
Additions*
53.9
123.7
177.6
0.7
10.7
189.1
Transfers**
-118.1
121.3
3.3
-
-
3.3
Disposal cost price
-
-
-
-
-
-
Disposal impairments/depreciations
-
-
-
-
-
-
Depreciation of RoU recognized against ARO
-
-
-
-
-
-
Impairments
-
-13.9
-13.9
-
-
-13.9
Depreciation
-
-139.6
-139.6
-0.6
-4.0
-144.1
Closing net book amount
149.1
966.3
1,115.4
1.2
16.6
1,133.2
As of 31 December 2023
Acquisition costs
286.7
3,304.6
3,591.3
14.9
45.1
3,651.2
Accumulated impairments
-137.5
-345.0
-482.6
-0.1
-
-482.7
Accumulated depreciation
-
-1993.3
-1993.3
-13.6
-28.5
-2,035.4
Net book amount
149.1
966.3
1,115.4
1.2
16.6
1,133.2
Depreciation method
UoP
Linear (3-7 years)
* Includes changes in estimate of asset retirement, see Note 21.
** Transfers were related to reclassification of the book value of Fenja license from development phase to production phase.
Depreciation, depletion and amortization (DD&A) is charged to cost of goods sold in the statement of comprehensive income.
Consolidated accounts
Annual Report and Accounts 2024
DNO
71
Note 11
Impairments
Accounting policies
Impairments
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired. If an
impairment indicator is concluded to exist, an impairment test is performed.
Indications of impairment may include a decline in the long-term oil and gas price (or short-term oil and gas price for late-life oil and
gas fields), changes in future investments or significant downward revision of reserve and resource estimates. For the purposes of
impairment assessment, assets are grouped at the lowest levels for which there are separable identifiable cash inflows. For oil and
gas assets, a CGU may be individual oil and gas fields, or a group of oil and gas fields that are connected to the same
infrastructure/production facilities, or a license.
An impairment loss is recognized when the carrying amount exceeds the recoverable amount of an asset. The recoverable amount is
the higher of the asset’s fair value less costs to sell and its value in use. Fair value less costs to sell determined through either the
discounted cash flow method (income approach) or the market transactions method (market approach). The value in use can only be
determined through the discounted cash flow method.
Technical goodwill
Technical goodwill is tested for impairment annually or more frequently when there are impairment indicators. Those indicators may
be specific to an individual CGU or groups of CGUs to which the technical goodwill is related. Goodwill is not depreciated and hence,
impairment of technical goodwill is expected on a recurring basis, unless there are positive changes in underlying assumptions that
more than offset the production from the CGU (or groups of CGUs).
When performing the impairment test for technical goodwill, deferred tax recognized in relation to the acquired assets in a business
combination reduces the net carrying value prior to the impairment charges. After initial recognition, depreciation of values calculated
in the purchase price allocations from business combinations will result in decreased deferred tax liability. When deferred tax from
the initial recognition decreases, more goodwill is exposed for impairment.
Estimation uncertainty: Impairment/reversal of impairment of oil and gas assets
The estimation of the recoverable amount for the oil and gas assets includes assessments of expected future cash flows and future
market conditions, including entitlement production, future oil and gas prices, cost profiles, country risk factors (i.e., discount rate)
and the date of expiration of the licenses.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset
or liability, including assumptions about risk, assuming that market participants act in their economic best interest. The Group uses
valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value. The
fair value of oil and gas assets is normally based on discounted cash flow models (income approach), where the determination of
different inputs in the model requires significant judgment from management, as described in the section above regarding
impairment.
Climate considerations in impairment assessments
Certain climate considerations are factored into the Group’s estimation of cash flows that are applied in the calculation of recoverable
amount. This includes factoring in current legislation (e.g., environmental taxes/fees) and estimation of future levels of environmental
taxes/fees. For DNO’s oil and gas assets on the NCS, carbon pricing is in line with current legislation and reflects the operators
forecasts for individual assets. As proposed in the Norwegian Government’s Climate Plan for 2021-2030, a steady increase in the
total carbon price (quota plus CO2 tax) to NOK 2,000 per tonnes (in 2020 real terms) is expected by 2030. In Kurdistan, the KRG
introduced in 2021 a requirement for oil companies to put plans in place to curb gas flaring to reduce emissions. The Company has
run sensitivities for its Kurdistan oil assets with the CO2 tax assumptions as described in the scenarios described by the International
Energy Agency (IEA).
An energy transition is likely to impact future oil and gas prices which in turn may affect the recoverable amount of the oil and gas
assets. Indirectly, climate considerations are also assessed in the forecasting of oil and gas prices where supply and demand are
considered.
Consolidated accounts
72
DNO
Impairment testing
Impairment assessment of DNO’s assets in Kurdistan is based on the value in use approach. For oil and gas assets and goodwill
recognized in relation to the acquisitions, the impairment assessment is based on the fair value approach (level 3 in fair value hierarchy,
IFRS 13). For both the value in use and fair value, the impairment testing is performed based on discounted cash flows. The expected
future cash flows are discounted to the net present value by applying a discount rate after tax. Cash flows are projected for the
estimated lifetime of the fields or license, which may exceed periods longer than five years.
Below is an overview of the key assumptions applied for impairment assessment purposes as of 31 December 2024.
Oil and gas prices
Forecasted oil and gas prices are based on management’s estimates and market data. The near-term price assumptions are based on
forward curve pricing over the period for which there is deemed to be a sufficient liquid market and observable broker and analyst
consensus. The long-term price assumptions reflect management’s best estimate of the oil and gas price development over the life of
the Group’s oil and gas fields based on its view of current market conditions and future developments. Management’s assessment also
includes comparison with long-term oil and gas price assumptions communicated by peer companies and other external forecasts. Oil
and gas price assumptions applied for impairment testing are reviewed and, where necessary, adjusted on a periodic basis.
The nominal oil and gas price assumptions applied for impairment assessments at yearend 2024 were as follows (yearend 2023 in
brackets):
2025
2026
2027
2028
Brent (USD/bbl)
71.5 (84.0)
74.4 (75.5)
72.0 (73.6)
71.9 (71.8)
NBP (pence/therm)
110.7 (115.0)
87.6 (96.5)
85.6 (86.5)
80.9 (76.4)
For periods after year 2029, the long-term oil and gas price assumptions applied were USD 65 per barrel and 69 pence sterling per
therm, respectively (in real terms, basis year 2024).
Oil and gas price differential
The estimated net oil and gas price is based on the above nominal price assumptions adjusted for price differentials due to quality and
transportation for each individual field.
Oil and gas reserves and resources
Future cash flows are calculated on the basis of expected production profiles and estimated proven and probable remaining reserves,
and additional risked contingent resources when the impairment assessments are based on the fair value approach. For more
information about reserves and resources estimate, see Note 1 and Note 27.
Discount rate
The discount rate is derived from the Company’s weighted average cost of capital (WACC). Main elements of the WACC include:
•
For the value in use calculations, the capital structure considered in the WACC calculation is derived from DNO’s debt and equity to
enterprise value ratio at yearend. For the fair value calculations, the capital structure considered in the WACC calculation is derived
from the capital structures of an identified peer group and market participants.
•
The cost of equity is calculated on a country-by-country basis using the Capital Asset Pricing Model (CAPM) and adding a country risk
premium. The beta factor is based on publicly available data about the Company’s beta in the value in use calculations, whereas the
beta factors used for the fair value calculations are based on publicly available market data about the identified peer group.
•
For the value in use calculations, the cost of debt is based on yield-to-maturity on the Company’s outstanding bond loans with an
upward adjustment to reflect a potential extension, whereas for fair value calculations the cost of debt is based on an identified peer
group’s bond loan issues.
For the value in use calculations, the relevant post-tax nominal discount rate at yearend 2024 was 13.3 percent (13.7 percent at
yearend 2023) for the Kurdistan assets. For the fair value calculations, the relevant post-tax nominal discount rates at yearend 2024
was 8.9 percent for the Norwegian North Sea assets (9.8 percent at yearend 2023) and 8.6 percent for the UK North Sea assets (7.1
percent at yearend 2023).
Inflation and currency rates
The long-term inflation rate is assumed to be 2 percent independent of the underlying country or currency (unchanged from yearend
2023). DNO has applied the forward curve and observable broker and analyst consensus as basis for assessment of currency rates.
The USD/NOK applied for impairment testing at yearend 2024, was USD/NOK 11.0 for 2025, USD/NOK 10.5 for the years 2026-2027,
USD/NOK 10.0 for the years 2028-2029 and thereafter kept constant at USD/NOK 10.0 from the year 2029 onwards.
Consolidated accounts
Annual Report and Accounts 2024
DNO
73
Impairment charge and/or reversal
The following table shows the recoverable amounts and net impairment charges or reversal for the CGUs which were impaired in 2024
and 2023, and how it was recognized in the income statement and the balance sheet.
Full-Year ended 31 December 2024
Income statement:
Balance sheet:
(in USD million)
Impairment
Impairment
Recoverable
Tax
Other
Property,
Deferred
amount
reversal
income
reversal
intangible
plant and
tax asset/
Currency
CGU, segment
(post-tax)
(pre-tax)
(post-tax)
Goodwill
assets
equipment
effects
Baeshiqa, Kurdistan
82.0
-89.0
-
-89.0
-
-
-89.0
-
-
Arran, North Sea
20.1
-41.6
-
-41.6
-41.3
-
-
-
-0.3
Vilje, North Sea
5.3
-2.2
-
-2.2
-2.2
-
-
-
-0.0
Ula area, North Sea
-
-6.7
5.2
-1.5
-
-
-6.6
5.2
-0.0
Other CGUs, North Sea
-
-6.4
-
-6.4
-2.4
-
-2.6
-
-1.4
Total
-146.0
5.2
-140.8
-46.0
-
-98.2
5.2
-1.8
Full-Year ended 31 December 2023
Income statement:
Balance sheet:
(in USD million)
Impairment
Impairment
Recoverable
Tax
Other
Property,
Deferred
amount
reversal
income
reversal
intangible
plant and
tax asset/
Currency
CGU, segment
(post-tax)
(pre-tax)
(post-tax)
Goodwill
assets
equipment
effects
Ula area, North Sea
-
-14.9
12.7
-2.2
-
-
-15.6
13.2
0.2
Vilje, North Sea
9.4
-10.9
-
-10.9
-11.3
-
-
-
0.4
Other CGUs, North Sea
-
1.0
-
1.0
-
-
1.1
-
-0.1
Total
-24.9
12.7
-12.1
-11.3
-
-14.5
13.2
0.5
During 2024, a total impairment charge of USD 146.0 million (USD 140.8 million post-tax) was recognized, mainly driven by:
•
The results of well testing programs (Baeshiqa CGU);
•
Recognition of a deferred tax asset which triggered a partial impairment of goodwill (Arran CGU, see Note 12)
•
Updated economic profiles (Vilje CGU); and
•
Upward revision in the cost estimate for decommissioning (Ula area CGU).
At yearend 2024, total book value of goodwill of USD 102.1 million is mainly related to technical goodwill from the Norne area
acquisition (USD 54.5 million), Arran acquisition (USD 20.2 million) and Alve CGU (USD 26.2 million).
During 2023, a total impairment charge of USD 24.9 million (USD 12.1 million post-tax) was recognized, mainly driven by:
•
Downward revision of the oil price assumption and reserves estimates, and updated cost profiles (Vilje CGU); and
•
Upward revision in the cost estimate for decommissioning (Ula area CGU).
The Company performed testing of its Kurdistan assets following the ITP closure in March 2023 (Note 3). The estimated recoverable
amounts were higher than the carrying amounts and thus no impairment charges were recognized at yearend 2023.
At yearend 2023, total book value of goodwill of USD 43.2 million was mainly related to technical goodwill on Alve CGU (USD 29.2
million).
Sensitivities
The table below illustrates how the net profit/loss in 2024 would have been affected by changes in the various assumptions, holding the
remaining assumptions unchanged. The estimated recoverable amounts related to the Tawke license in Kurdistan are substantially
higher than the carrying amounts and the same sensitivity tests would not imply any impairment charges.
Change in reported net profit/loss (net)
Assumption (USD million)
Change
Increase in assumption:
Decrease in assumption:
Oil and gas price
90.1
-94.6
Reserves (2P) and resources (2C)
32.7
-31.7
Discount rate (WACC)
-11.0
12.0
Currency rate (USD/NOK)
0.8
-0.9
Climate considerations in impairment assessment
To
assess the robustness of the Group’s oil and gas assets, the Company has run sensitivities with the oil and gas price assumptions
described by three scenarios outlined by the IEA: the Net Zero Emissions Scenario by 2050, the Announced Pledges Scenario and the
Stated Policies Scenario. These scenarios are commonly applied by peer companies and the Company believes that these are useful
for investors and other stakeholders in assessing portfolio resilience across companies in the industry. The oil and gas price
assumptions in the scenarios have been provided by the IEA for the years 2030 and 2050 (in 2023 real terms), and for the sensitivity
calculation a linear development between average actual 2024 and IEA 2030, as well as between IEA 2030 and IEA 2050 have been
applied. The table below summarizes how the reported net profit would be impacted by an increase (+) or decrease (-) in impairment
charge using the oil and gas price assumptions in the following scenarios:
Oil price USD/bbl (assumption)
Gas price USD/MMBTU (assumption)
Change in reported
IEA scenario (USD million)
2030
2050
2030
2050
net profit/loss (net):
Stated Policies
79.0
75.0
6.5
7.7
0.1
Announced Pledges
72.0
58.0
6.0
5.2
-3.7
Net Zero Emissions by 2050
42.0
25.0
4.4
4.0
-125.2
Consolidated accounts
74
DNO
A significant reduction in the oil and gas price assumptions could also affect the estimated economic cut-off of the projects.
These illustrative impairment sensitivities assume no changes to assumptions other than oil and gas prices. The illustrative sensitivities
on climate change are not considered to represent a best estimate of an expected impairment impact. Moreover, a significant and
prolonged reduction in oil and gas prices would likely result in mitigating actions by DNO and its license partners; for example it could
have an impact on drilling plans and production profiles for new and existing assets. Quantifying such impacts is considered
impracticable, as it requires detailed evaluations based on hypothetical scenarios and not based on existing business or development
plans.
License expiry and economic cut-off dates for development and production assets
In Kurdistan, the Tawke license expires in 2026 but DNO has the right to one automatic five-year extension (i.e., to 2031) and, if
commercial production is still possible at the end of this extended period, DNO is entitled to, upon request to the KRG, a further five-
year extension (i.e., to 2036). Based on DNO’s current assessments, the production from Tawke license will be commercial for the
duration of its contractual term and through subsequent extensions. On the Baeshiqa license, commerciality was declared by the
contractor on 1 August 2021, terminating the exploration period and moving into the PSC development period, which has as a 20-year
duration. If commercial production is still possible at the end of the 20-year period, DNO is entitled to a five-year extension.
In the North Sea, the following relevant license expiry and economic cut-off (in brackets) dates were applied in relation to yearend 2024
impairment assessments; the Ula area CGU have license expiry dates that ranges between 2029 and 2036 (economic cut-off assumed
to be at the end of 2028); the Norne area CGU have license expiry dates that ranges between 2029 and 2036 (2032); the Brage area
CGU license expiry dates ranges between 2030 and 2031 (2031); the Trym license expires in 2027 (2027); the Vilje license expires in
2032 (2032); the Fenja license expires in 2039 (2038); the Arran field expires in 2028 (2029); and the Berling license expires 2043
(2036).
Consolidated accounts
Annual Report and Accounts 2024
DNO
75
Note 12
Business combinations
Accounting policies
Business combinations
In accordance with IFRS 3 Business Combinations, an acquisition is considered a business combination, when the acquired asset or
groups of assets constitute a business (i.e., an integrated set of operations and assets conducted and managed for the purpose of
providing a return to the investors).
Acquired businesses are included in the financial statements from the transaction date. The transaction date is defined as the date
on which the Group achieves control over the financial and operating assets. This date may differ from the actual date on which the
assets are transferred.
For accounting purposes, the acquisition method is used in connection with the purchase of businesses. Acquisition cost equals the
fair value of the assets used as consideration, including contingent consideration, equity instruments issued and liabilities assumed
in connection with the transfer of control. Acquisition cost is measured against the fair value of the acquired assets and assumed
liabilities. Identifiable intangible assets are included in connection with acquisitions if they can be separated from other assets or
meet the legal contractual criteria. If the acquisition cost at the time of the acquisition exceeds the fair value of the acquired net
assets (when the acquiring entity achieves control of the transferring entity), goodwill arises. If the fair value of the acquired net
assets exceeds the acquisition cost on the acquisition date, the excess amount is taken to profit or loss immediately.
Goodwill is allocated to the CGUs or groups of CGUs that are expected to benefit from synergy effects of the acquisition. The
allocation of goodwill may vary depending on the basis of its initial recognition.
The goodwill that is recognized by the Group is related to technical goodwill and is recognized due to the requirement to recognize
deferred tax for the difference between the assigned fair values and the related tax base. The fair values of the Group’s licenses in
the North Sea are based on cash flows after tax. This is because these licenses are sold only on an after-tax basis. The purchaser is
therefore not entitled to a tax deduction for the consideration paid above the seller’s tax values. In accordance with IAS 12, a
provision is made for deferred tax corresponding to the tax rate multiplied by the difference between the fair values of the acquired
assets and the transferred tax depreciation basis. The offsetting entry to this deferred tax is goodwill. Hence, goodwill arises as a
technical effect of deferred tax. Technical goodwill is tested for impairment separately for each CGU which gives rise to the technical
goodwill. A CGU may be individual oil fields, or a group of oil fields that are connected to the same infrastructure/production facilities,
or a license.
The estimation of fair value may be adjusted up to 12 months after the acquisition date if new information emerges about facts and
circumstances that existed at the time of the takeover and which, had they been known, would have affected the calculation of the
amounts that were included from that date.
Acquisition-related costs, except costs to issue debt or equity securities, are expensed as incurred. Taxes payable and deferred
taxes are recognized directly in the equity to the extent that they relate to items charged directly to the equity.
Estimation uncertainty
The Group applies the acquisition method for transactions involving business combinations and applies the principles of the
acquisition method when an interest or an additional interest is acquired in a joint operation which constitutes a business. Application
of the acquisition method may require significant judgement in, among other matters, determining and measuring the fair value of the
transaction consideration including contingent consideration elements, identifying all assets acquired and liabilities assumed,
establishing their fair values, determining deferred taxes, and allocating the purchase price accordingly, including measurement and
allocation of goodwill.
The assets acquired through business combinations are recognized at fair values and, as such, are sensitive to adverse changes in
a number of often volatile economic factors, including future oil and gas prices and the underlying performance of the assets.
The Company has completed two transactions during 2024 as described below. The transactions are regarded as business
combinations and accounted for using the acquisition method. Purchase price allocations (PPA) have been performed to allocate the
consideration to fair value of assets acquired and liabilities assumed. No material changes booked during the measurement period.
Consolidated accounts
76
DNO
Arran acquisition
On 6 February 2024, the Company announced that its wholly owned subsidiary DNO Exploration UK Limited had entered into an
agreement to acquire a 25 percent interest in the Arran field on the UKCS from ONE-Dyas E&P Limited. The transaction completed on
15 May 2024 which is also the acquisition date for accounting purposes. The goodwill recognized relates mainly to technical goodwill
and tax synergies. No contingent consideration is to be paid. Transaction costs of USD 0.7 million were incurred and expensed in the
profit/loss statement.
Since the acquisition, DNO has included in its consolidated statement of comprehensive income a revenue of USD 34.3 million and a
profit of USD 4.3 million. If the business combination had occurred in the beginning of 2024, DNO would have included in its
consolidated statement of comprehensive income a revenue of USD 66.2 million and a profit of USD 9.2 million.
Fair value at
USD million
acquisition date
Deferred tax assets
8.4
Producing asset
37.5
Other current assets
0.3
Total assets
46.2
Deferred tax liabilities
20.3
Asset retirement obligation
21.1
Other current liabilities
6.4
Total liabilities
47.8
Total identifiable net assets at fair value
-1.6
Consideration (cash)
60.1
Goodwill
61.7
After the recognition of the PPA, a reassessment of the utilization of tax losses in the acquiring entity was carried out, which triggered
the recognition of a deferred tax asset and a partial impairment of goodwill. The overall impact on the Net profit/loss is positive but the
adjustments are reported through different lines in the accounts.
Impairment of goodwill
-41.3
Tax income due to recognition of deferred tax asset
61.7
Impact on Net profit/loss
20.4
Consolidated accounts
Annual Report and Accounts 2024
DNO
77
Norne Area acquisition
On 8 May 2024, the Company announced that its wholly owned subsidiary DNO Norge AS had entered into an agreement to acquire
stakes in five oil and gas fields, including an operatorship, in the Norne area in the Norwegian Sea from Vår Energi ASA. The
transaction included interests in four producing fields, Norne (6.9 percent), Skuld (11.5 percent), Urd (11.5 percent) and Marulk (20
percent and operatorship) plus the ongoing Verdande development (10 percent). The transaction completed on 30 August 2024 which is
also the acquisition date for accounting purposes. The goodwill recognized relates mainly to technical goodwill. No contingent
consideration is to be paid. Transaction costs of USD 0.2 million were incurred and expensed in the profit/loss statement.
Since the acquisition, DNO has included in its consolidated statement of comprehensive income a revenue of USD 12.7 million and a
profit of USD 1.9 million. If the business combination had occurred in the beginning of 2024, DNO would have included in its
consolidated statement of comprehensive income a revenue of USD 71.7 million and a profit of USD 9.1 million.
Fair value at
USD million
acquisition date
Deferred tax assets
55.6
Producing asset
75.0
Other current assets
3.0
Total assets
133.6
Deferred tax liabilities
54.5
Asset retirement obligation
67.0
Other current liabilities
11.4
Tax payable
12.9
Total liabilities
145.8
Consideration (cash)
28.3
Ringhorne East transfer at fair value
11.6
Total consideration
39.9
Net assets excluding goodwill
-12.2
Consideration
39.9
Goodwill
52.1
The transfer of DNO’s 22.6 percent interest in Ringhorne East to Vår Energi ASA, the other element of the swap, was also completed on
30 August 2024. The gain on the disposal is the difference between the proceeds and the carrying amount and has been recognized in
the profit/loss statement.
Net asset derecognized
12.3
Consideration received
15.3
Gain
3.0
Consolidated accounts
78
DNO
Note 13
Joint Venture
Accounting policies
Joint Venture
The Group’s investments in a joint venture are accounted for using the equity method. The income statement reflects the Group’s
share of the results of operations in the joint venture. The financial statements of the joint venture are prepared for the same
reporting period as the Group. When necessary, adjustments are made to bring the accounting policies in line with those of the
Group.
DNO holds 100 percent of the shares in Mondoil Enterprises LLC (Mondoil Enterprises) which has a 33.33 percent indirect interest in
privately-held Foxtrot International whose principal assets are operated stakes in offshore production of gas and associated liquids in
Côte d'Ivoire. Foxtrot International holds a 27.27 percent interest in and operatorship of Block CI-27 containing reserves of gas,
produced together with condensate and oil, from four offshore fields tied back to two fixed platforms.
Foxtrot International's summarized statement of financial position
Year ended 31 December
USD million
2024
2023
Non-current assets
159.3
199.9
Current assets
50.1
64.3
Total assets
209.4
264.2
Non-current liabilities
67.6
68.8
Current liabilities
24.8
27.5
Total liabilities
92.5
96.3
Equity
116.9
167.9
Group's share of net assets (33.33 percent)
38.1
56.0
Goodwill
0.8
0.8
Fair value uplift on PP&E and ARO (net of related deferred tax)
10.0
11.1
Carrying amount Investment in Joint Venture
48.8
67.9
Foxtrot International's summarized statement of comprehensive income
1 January - 31 December
USD million
2024
2023
Revenues
75.7
79.4
Expenses
-35.6
-17.6
Depreciation
-33.7
-30.8
Other income/finance income
6.2
8.6
Tax income/expense
-
-
Net profit/loss
12.6
39.6
Group's share of net profit (33.33 percent)
4.2
13.2
Depletion of fair value uplift of PP&E and ARO (net of related deferred tax)
-0.9
-1.3
Share of profit/loss from Joint Venture
3.3
11.9
Movement in the carrying amount of Investment in Joint Venture
1 January - 31 December
USD million
2024
2023
Opening balance
67.9
76.1
Share of profit/loss from Joint Venture
3.3
11.9
Equity contribution into Joint Venture
9.4
6.9
Dividends from Joint Venture
-31.8
-27.1
Carrying amount Investment in Joint Venture
48.8
67.9
Consolidated accounts
Annual Report and Accounts 2024
DNO
79
Note 14
Inventory
Accounting policies
Inventories
Inventories comprise of drilling equipment, spare parts and consumables for own use and are valued at the lower of cost and net
realizable value. Inventories that meet the definition of PP&E are presented under the PP&E and are depreciated as part of the
underlying capitalized asset using the UoP method.
Years ended 31 December
USD million
2024
2023
2024
2023
2024
2023
Drilling equipment, spare parts and consumables
70.9
80.4
23.4
14.8
94.3
95.2
Provision for obsolete inventory
-15.2
-15.0
-4.3
-2.3
-19.4
-17.4
Total inventories
55.7
65.3
19.1
12.5
74.8
77.8
Consolidated accounts
80
DNO
Accounting policies
Trade debtors
Trade debtors are recognized at nominal value less any provisions for expected credit losses (ECL). ECLs are based on the
difference between the contractual cash flows due in accordance with the contract and all the (discounted) cash flows that are
expected to be received (i.e., cash shortfalls). ECLs on trade receivables are measured by applying either the general model or the
simplified model. A company must apply the simplified model for trade receivables, which, when invoiced, were without a significant
financing component. This applies to the Company’s oil and gas sales and hence the simplified model is applied in respect of the
ELC assessment of the Kurdistan trade debtors (see below).
Overlift/underlift
An underlift arises when the sale is less than the Group’s share of the oil and gas production. In general, the overlift/underlift
balances are valued at production cost including depreciation (the sales method). For overlift, see Note 22.
Note 15
Other non-current receivables/Trade and other receivables
Years ended 31 December
USD million
2024
2023
Trade debtors (non-current portion)
98.2
129.8
Other long-term receivables
-
-
Total other non-current receivables
98.2
129.8
Trade debtors
185.0
149.5
Underlift
7.1
12.1
Other short-term receivables
146.1
103.8
Total trade and other receivables
338.1
265.4
At yearend 2024, the Company was owed over USD 298.1 million, excluding any interest, by the KRG mainly related to sales of DNO’s
entitlement shares of oil to the KRG for the months October 2022 through March 2023 plus part of the amount invoiced for oil sold to the
KRG in September 2022. These receivables are past due. Since 2017, DNO has consistently invoiced the KRG for such oil sales based
on an agreed Brent-based pricing mechanism. For September 2022, the KRG unilaterally decided to pay based on a purported price
realized by the KRG during the delivery month. The KRG proposed such change to the agreed pricing mechanism in September 2022 to
which DNO has not agreed. DNO therefore continues to request payment of the full invoiced amount. During 2024, DNO recognized
that USD 16.9 million of these arrears had been settled by way of offsetting against payables due to the KRG.
The Company continues to engage with the KRG regarding collection of the arrears and expects that it will recover the full invoiced
amount (as has occurred in the past), but the timing of recovery is uncertain. Nonetheless, due to the IFRS 9 Financial Instruments
requirement to incorporate the time value of money, the Company reduced the book value of the KRG arrears in 2023 by USD 44.6
million (presented under
Financial expenses
value of the estimated future cash flows. As of 31 December 2024, the Company re-estimated the present value with updated
assumptions, resulting in an accumulated increase of USD 11.9 million to the book value of KRG arrears during 2024. The calculation of
present value in accordance with IFRS 9, considers a range of possible scenarios with assigned weighting, involving estimation of the
timing of receipt of the arrears which will be dependent upon uncertain future events, in particular the assumed timing of the re-opening
of the ITP which has been shut-down since end of March 2023. A discount rate of 12 percent has been applied.
The underlift receivable of USD 7.1 million at yearend 2024 relates to North Sea. Other short-term receivables mainly relate to working
capital items in licenses in Kurdistan and the North Sea and accrual for earned income not invoiced in the North Sea.
Consolidated accounts
Annual Report and Accounts 2024
DNO
81
Note 16
Cash and cash equivalents
Accounting policies
Cash and cash equivalents
Cash and short-term deposits in the statements of financial position comprise cash held in banks, cash in hand and short-term
deposits with an original maturity of three months or less and held to meet short term commitments. Restricted cash is cash reserved
for a specific purpose and therefore not available for immediate and general use by the Group.
Years ended 31 December
USD million
2024
2023
Cash and cash equivalents, restricted
17.5
14.3
Cash and cash equivalents, non-restricted
881.5
704.5
Total cash and cash equivalents
899.0
718.8
Restricted cash consists of deposits on escrow account, employees’ tax withholdings and deposits for rent. Non-restricted cash is
mainly related to bank deposits in USD, NOK, GBP and EUR as of 31 December 2024.
Included in the non-restricted cash and cash equivalents as of 31 December 2024 is USD 304 million held on fixed interest time deposit
contracts with different duration and maturity dates up to 14 February 2025.
Consolidated accounts
82
DNO
Note 17
Equity
Accounting policies
Equity
Ordinary shares
Ordinary shares are classified as equity. Costs directly attributable to the issue of ordinary shares are recognized as a reduction of
equity.
Repurchase of share capital (treasury shares)
Repurchased shares are classified as treasury shares and are presented as a deduction from total equity. When treasury shares are
subsequently sold or reissued, the amount received is recognized as an increase in equity and the resulting surplus or deficit of the
transaction is transferred to/from retained earnings.
Dividend
A liability to pay a dividend is recognized when the distribution is authorized by the shareholders at the AGM or the Board of
Directors based on authorization by the AGM. A corresponding amount is recognized directly in equity.
Share capital
Number of
Ordinary
Treasury
USD million
shares (1,000)
shares
shares
Total
As of 1 January 2023
1,018,008
34.8
-0.9
33.9
Treasury shares purchased
-43,007
-
-1.0
-1.0
As of 31 December 2023
975,000
32.9
-
32.9
Number of
Ordinary
Treasury
USD million
shares (1,000)
shares
shares
Total
As of 1 January 2024
975,000
32.9
-
32.9
Treasury shares purchased
-
-
-
-
As of 31 December 2024
975,000
32.9
-
32.9
Consolidated accounts
Annual Report and Accounts 2024
DNO
83
At the 2024 AGM, the Board of Directors was given the authority to acquire treasury shares with a total nominal value of up to NOK
24,375,000 which corresponds to 97,500,000 new shares. The maximum amount to be paid per share is NOK 100 and the minimum
amount is NOK 1. The authorization is time-limited until the 2025 AGM, and not beyond 30 June 2025.
The Board of Directors was also given the authority to increase the Company’s share capital by up to NOK 24,375.000 which
corresponds to 97,500,000 shares. The authorization is time-limited until the 2025 AGM, and not beyond 30 June 2025.
In addition, the Board of Directors was given the authority to raise convertible bonds with an aggregate principal amount of up to USD
300,000,000. Upon conversion of bonds issued pursuant to this authorization, the Company’s share capital may be increased by up to
NOK 24,375.000. The authorization is valid until the 2025 AGM, but not beyond 30 June 2025.
The Board of Directors was given the authority to approve total dividend distributions from the date of the 2024 AGM until the date of the
2025 AGM. Following this, the Board of Directors decided to distribute quarterly dividends, NOK 0.25 per share in February and May
and dividends of NOK 0.3125 per share in August and November 2024.
Interest
The Company's shareholders as of 31 December 2024
Shares
(percent)
Goldman Sachs & Co. LLC
92,535,456
9.49
Folketrygdfondet
71,148,737
7.30
Clearstream Banking S.A.
63,878,853
6.55
BNP Paribas
42,956,895
4.41
RAK Gas LLC
34,311,403
3.52
Goldman Sachs & Co. LLC
33,147,785
3.40
Euroclear Bank S.A./N.V.
28,433,212
2.92
The Bank of New York Mellon
25,116,930
2.58
UBS Switzerland AG
19,583,592
2.01
JPMorgan Chase Bank, N.A., London
18,807,514
1.93
State Street Bank and Trust Comp
18,045,289
1.85
Nordnet Bank AB
12,321,500
1.26
State Street Bank and Trust Comp
10,890,560
1.12
Salt Value AS
10,660,968
1.09
Verdipapirfondet KLP Aksjenorge IN
10,035,479
1.03
Caceis Bank
8,696,391
0.89
Avanza Bank AB
7,887,883
0.81
Goldman Sachs & Co. LLC
7,678,701
0.79
Verdipapirfondet Storebrand Indeks
7,611,789
0.78
Verdipapirfondet DNB Norge Indeks
7,481,659
0.77
Other shareholders
443,769,404
45.51
Total number of shares excluding treasury shares
975,000,000
100.00
Treasury shares as of 31 December 2024 (DNO ASA)
0.00
0.00
Total number of outstanding shares
975,000,000
100.00
* At yearend 2024, DNO's Executive Chairman Bijan Mossavar -Rahmani held interests in the Company through nominee accounts at the
Dividends of USD 101.9 million were paid in 2024 (USD 92.0 million in 2023). See Note 29 for dividend payment approved by the Board
after the reporting date. See Note 5 for shares held by the Board of Directors and the senior management.
Consolidated accounts
84
DNO
Note 18
Interest-bearing liabilities
Accounting policies
Interest-bearing liabilities
At initial recognition, the bonds are measured at its fair value minus transaction costs that are directly attributable to the issue of the
financial liability. Subsequently, bonds are measured at amortized cost.
Transaction costs directly attributable to the acquisition, issuance, or restructuring of financial liabilities, are amortized over the
expected life of the liability using the effective interest rate method. Amortization is recognized in the income statement, ensuring a
systematic and rational allocation of these costs over the period during which the liability is outstanding.
Effective
interest
Fair value
Carrying amount
Ticker
Facility
Facility
Interest
rate
USD million
OSE
currency
amount
(percent)
Maturity
(percent)
2024
2023
2024
2023
Non-current
Bond loan (ISIN NO0011088593)
DNO04
USD
350.0
7.875
09.09.26
8.8
352.4
378.1
350.0
400.0
Bond loan (ISIN NO0013243766)
DNO05
USD
400.0
9.250
04.06.29
10.0
410.0
-
400.0
-
Capitalized borrowing issue costs
-9.5
-8.0
Reserve based lending facility
-
USD
230.0
see below
see below
-
50.0
-
50.0
-
Total non-current interest-bearing liabilities
812.4
378.1
790.5
392.0
Current
Bond loan (ISIN NO0010852643)
DNO03
USD
131.2
8.375
29.05.24
9.0
-
130.9
-
131.2
Reserve based lending facility (current)
-
USD
230.0
see below
see below
-
-
35.0
-
35.0
Total current interest-bearing liabilities
-
165.9
-
166.2
Total interest-bearing liabilities
812.4
544.0
790.5
558.2
Facility and carrying amount for the bonds is presented net of bonds held by the Company.
On 22 January 2024, DNO ASA fully completed a USD 131.2 million call option redemption of the DNO03 bond at a price of 100 percent
plus accrued interest.
On 4 June 2024, DNO ASA completed the placement of a new USD 400 million, five-year senior unsecured bond issued at 100 percent
at par with a coupon rate of 9.25 percent. In connection with the bond placement, the Company agreed to buy back USD 50 million in
nominal value of DNO04 at par plus accrued interest. The financial covenants of the bonds issued by DNO ASA require minimum USD
40 million of liquidity, and that the Group maintains either an equity ratio of 30 percent or a total equity of a minimum of USD 600 million.
There is also a restriction on declaring or making any dividend payments if the liquidity of the Company is less than USD 80 million
immediately following such distribution.
As of 31 December 2024, the Group has a reserve-based lending (RBL) facility for its Norway and UK production licenses with a total
facility limit of USD 230 million which is available for both debt and issuance of letters of credit. Interest charged on utilizations is based
on SOFR plus a margin, currently 3.50 percent. The facility will amortize over the loan life with a final maturity date of 7 November 2026.
The entities that participate in the facility are required to submit quarterly a liquidity test and maintain a consolidated net debt divided by
EBITDAX ratio of maximum 3.50. The security under the RBL includes, without limitation, a pledge over the shares in DNO North Sea
plc and its subsidiaries, assignment of claims under shareholder loans, intra-group loans and insurances, a pledge of certain bank
accounts and mortgages over the license interests. There are also restrictions on loans and dividend payments to DNO ASA. The
borrowing base amount of the facility from 1 January 2025 is USD 150 million. Amount utilized as of the reporting date is disclosed in
the table above. In addition, USD 18.6 million is utilized in respect of letters of credit.
There have been no breaches of the financial covenants of any interest-bearing liability in the current period.
Consolidated accounts
Annual Report and Accounts 2024
DNO
85
Changes in liabilities arising from financing activities split on cash and non-cash changes
At 1 Jan
Cash
Non-cash changes
At 31 Dec
USD million
2024
flows
Amortization
Currency
Acquisition
Reclass
2024
Bond loans (non-current)
400.0
350.0
-
-
-
-
750.0
Bond loans (current)
131.2
-131.2
-
-
-
-
-
Borrowing issue costs
-8.0
-5.6
4.1
-
-
-
-9.5
Reserve based lending facility (non-current)
-
15.0
-
-
-
35.0
50.0
Reserve based lending facility (current)
35.0
-
-
-
-
-35.0
-
Total
558.2
228.2
4.1
-
-
-
790.5
At 1 Jan
Cash
Non-cash changes
At 31 Dec
USD million
2023
flows
Amortization
Currency
Acquisition
Reclass
2023
Bond loans (non-current)
531.2
-
-
-
-
-131.2
400.0
Bond loans (current)
-
-
-
-
-
131.2
131.2
Borrowing issue costs
-11.3
-
3.3
-
-
-
-8.0
Reserve based lending facility (non-current)
26.6
-
-
-
-
-26.6
-
Reserve based lending facility (current)
8.4
-
-
-
-
26.6
35.0
Total
554.8
-
3.3
-
-
-
558.2
Consolidated accounts
86
DNO
Note 19
Lease liabilities
Accounting policies
Lease liabilities
The Group assesses at contract inception whether a contract is, or contains, a lease. The Group applies a single recognition and
measurement approach for all leases, except for short-term leases (12 months or less) and leases of low-value assets. Short term
leases and leases of low value assets have not been reflected in the balance sheet but expensed or capitalized as incurred,
depending on the activity in which the leased asset is used.
Lease liabilities are measured at the present value of lease payments to be made over the lease term. In calculating the present
value of lease payments, the Group uses the implicit interest rate and if not readily determinable, its incremental borrowing rate at
the lease commencement date. Extension options are included in the lease liability when, based on the management’s judgement, it
is reasonably certain that an extension will be exercised.
In the consolidated cash flow, lease payments related to lease liabilities recognized in accordance with IFRS 16, are presented as
cash flow used in financing activities.
Years ended 31 December
USD million
2024
2023
Non-current lease liabilities
9.7
14.0
Current lease liabilities
3.1
3.6
Total lease liabilities
12.7
17.5
The recognized lease liabilities in the balance sheet are mainly related to office rent.
The identified lease liabilities have no significant impact on the Group’s financing, loan covenants or dividend policy. The Group does
not have any residual value guarantees. Lease payments related to short-term leases and leases of low-value assets are mainly
recognized under lifting costs and exploration costs, or tangible assets and capitalized exploration. Total lease payments related to
short-term leases and low-value assets were USD 58.2 million as of yearend 2024 (2023: USD 49.1 million) with most of the lease
payments related to drilling rigs.
The following table summarizes the Group’s maturity profile of the lease liabilities based on contractual undiscounted lease payments
and are related to office rent and equipment.
1 January - 31 December
USD million
2024
2023
Within one year
4.0
4.8
Two to five years
8.7
11.8
After five years
3.2
5.4
Total undiscounted lease liabilities end of the period
15.9
22.0
.
Consolidated accounts
Annual Report and Accounts 2024
DNO
87
Note 20
Asset retirement obligations
Accounting policies
Provisions for asset retirement obligations (ARO)
Provisions for ARO are initially recognized at the present value of the estimated future costs determined in accordance with local
conditions and requirements. A corresponding asset of an amount equivalent to the ARO provision is also recognized initially and is
presented as part of the PP&E. The retirement asset is subsequently depreciated as part of the development and production asset it
relates to.
The ARO provisions and the discount rates are reviewed at each balance sheet date. The discount rates used in the calculation of
the present value of the ARO are pre-tax risk-free rates with the addition of a credit margin. The risk-free rate used has a maturity
date that is expected to coincide with the time the removal will be affected and denominated in the same currency as the expected
future expenditures. According to IFRIC 1
Changes in Existing Decommissioning, Restoration and Similar Liabilities
, changes in the
measurement of the ARO resulting from a change in the timing or amount of the outflow of resources embodying economic benefits
required to settle the obligation, or a change in the discount rate, are added to or deducted from the cost of the related asset.
Changes in the estimated ARO provisions impact the retirement asset in the period in which the estimate is revised.
Estimation uncertainty: Estimation of the cost for decommissioning
Estimation of the costs for decommissioning is complex and requires judgement as these estimates are based on currently
applicable laws, regulations and technology. Decommissioning activities will normally take place in the distant future, and the
technology, regulatory requirements and related costs may change. The energy transition may bring forward the decommissioning
activities and thereby increasing the present value of associated decommissioning provisions. Based on various scenario analysis
performed by the Company, management does not expect any reasonable change in the expected timeframe to have a material
effect on the Group’s decommissioning provisions, assuming cost estimates (i.e., cash flows) remain unchanged. The estimates
cover expected removal concepts based on known technology and, in the case of offshore decommissioning, estimated costs of
maritime operations, hiring of heavy-lift barges and drilling rigs. As a result, the initial recognition of the liability and the capitalized
cost associated with decommissioning obligations, and the subsequent adjustment of these balance sheet items, involve the
application of significant judgement. Based on the described uncertainty, there may be significant adjustments in estimates of
liabilities that can affect future financial results.
Asset retirement obligations (ARO)
The provisions for ARO are based on the present value of estimated future cost of decommissioning oil and gas assets in Kurdistan and
the North Sea. The discount rates before tax applied at yearend 2024 were between 5.1 percent and 5.3 percent (yearend 2023:
between 4.9 percent and 5.0 percent). The credit risk element included in the discount rates at yearend 2024 was 0.8 percent (yearend
2023: 0.8 percent).
Credit risk discussion
The Company note that IASB in relation to its project “Provisions – Targeted Improvements”, based on a staff paper recommendation,
have tentatively proposed to specify the use of a discount rate reflecting the time value of money, based on a risk-free rate without
adjustments for credit risk element (non-performance risk). However, considering that no new requirements in the standard have been
concluded, the Company deems it reasonable not to change its method for determining the discount rate. The Company has compared
its discount rate towards peers and noted that they are within a range applied by other peer companies.
Years ended 31 December
USD million
2024
2023
Non-current asset retirement obligations (ARO)
467.9
382.7
Current asset retirement obligations (ARO)
12.9
10.6
Total asset retirement obligations (ARO)
480.8
393.2
Years ended 31 December
USD million
2024
2023
Asset retirement obligation as of 1 January
393.2
388.6
ARO provisions from business combinations
83.0
-
ARO provisions divested assets
-2.9
-
Decommissioning spend
-4.9
-17.9
Increase/decrease in existing/new provisions
-1.6
10.5
Effects of change in the discount rate
-6.4
-5.4
Accretion expenses (unwinding of discount)
20.4
17.4
Asset retirement obligation as of 31 December
480.8
393.2
Consolidated accounts
88
DNO
Note 21
Other liabilities
Accounting policies
Provisions for other liabilities
A provision is recognized when the Group has a present obligation (legal or constructive) as a result of a past event, there is likely
that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the obligation amount.
The provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
Estimation uncertainty
The assessment of the existence and potential quantum of contingencies inherently involves the exercise of significant judgment and
the use of estimates regarding the outcome of future events. Management uses its judgment, and if necessary also external legal
experts to evaluate certain provisions and legal disputes in order to ensure the correct accounting treatment.
Years ended 31 December
USD million
2024
2023
Non-current
Other long-term obligations
6.9
7.3
Total non-current other liabilities
6.9
7.3
Current
Accrued interest expense
4.4
2.8
Other provisions and charges
9.8
6.4
Total current other liabilities
14.2
9.1
Total other liabilities
21.1
16.5
Note 22
Trade and other payables
Accounting policies
Overlift
An overlift arises when the Group sells more than its share of the oil and gas production (the sales method). For underlift, see Note
15.
Years ended 31 December
USD million
2024
2023
Trade payables
84.5
70.5
Public duties payable
4.0
4.3
Prepayments from customers
4.7
21.2
Overlift and other adjustments
103.7
1.2
Other accrued expenses
126.8
123.9
Total trade and other payables
323.7
221.1
Trade payables and other accrued expenses include items of working capital related to participation in licenses in Kurdistan and the
North Sea, and prepayment from customers related to oil sales in the North Sea. The overlift and other adjustments relate to North Sea
overlifted volumes, valued at production cost including depreciation, and other lifting related adjustments in Kurdistan.
Consolidated accounts
Annual Report and Accounts 2024
DNO
89
Note 23
Financial instruments
Accounting policies
Financial instruments
Financial assets
The Group’s financial assets include trade and other receivables, tax receivables and cash and cash equivalents.
Financial assets are initially recognized at fair value. After initial recognition the measurement and accounting treatment depend on
the type of instrument and classification: Financial investments at amortized cost through profit and loss, at fair value through profit
and loss (FVTPL), and at fair value through other comprehensive income (FVTOCI).
A financial asset is derecognized when the Group no longer has the right to receive cash flows from the asset, and risks and rewards
are of ownership are transferred through sale or the contractual rights to the cash flows expire, are redeemed or cancelled.
Financial liabilities
The Group’s financial liabilities include trade and other payables and loans.
Interest-bearing loans are after initial recognition measured at amortized cost using the effective interest rate method. Gains and
losses are recognized in profit or loss when the liabilities are derecognized as well as through the amortization process. Amortized
cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the
effective interest rate. The amortization cost is included as finance expense in the statements of comprehensive income. This applies
mainly to bond loans, see Note 18.
A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such a modification is treated as a derecognition of the original liability and a recognition of a new liability. The
difference in the respective carrying amounts is recognized in the statements of comprehensive income.
Financial risk management, objectives and policies
Overview
DNO is exposed to a range of risks affecting its financial performance including market risk, liquidity risk and credit risk. The Group
seeks to minimize potential adverse effects of such risks through sound business practices and risk management programs. No hedge
accounting is applied.
Market risk
The Group is exposed to market risks driven by fluctuations in oil and gas prices, foreign currency exchange rates and interest rates.
Oil and gas price risk
DNO’s revenues are generated from the sale of oil and gas. The Group had no oil and gas price hedging arrangements at yearend 2024
although it monitors its oil and gas price risk on a continuous basis and evaluates hedging alternatives.
The following table illustrates the impact on reported 2023 and 2024 profit/loss before income tax from oil and gas price fluctuations
deemed reasonable and possible, with all other variables held constant. In addition to driving revenues, price fluctuations or the
expectations of price fluctuations could impact DNO’s capital expenditure levels and impairment assessments. See Note 10 for a
sensitivity analysis related to the impairment assessment of oil and gas assets.
Change in yearend
Effect on profit
oil and gas price
before tax
2024
+/- 15.0
2023
+/- 15.0
Foreign currency exchange rate risk
Revenues from oil and gas production are primarily in USD and EUR, while operating expenses, capital and abandonment expenditures
are primarily denominated in USD, NOK and GBP. Dividend distributions from the Company are in NOK. The Group had no currency
hedging instruments at yearend 2024 although it monitors its foreign currency risk exposure on a continuous basis and evaluates
hedging alternatives.
Consolidated accounts
90
DNO
The following tables illustrate the impact on DNO’s reported profit/loss before income tax in 2023 and 2024 from foreign currency
exchange rate fluctuations deemed reasonable and possible in NOK, EUR and GBP to USD exchange rates, with all other variables
held constant. The other currencies (e.g., AED, IQD) are not included as the exposure is deemed immaterial.
Change in
Effect on profit
NOK (percent)
before tax (USD mill)
2024
+ 10.0
4.4
2024
- 10.0
-4.4
2023
+ 10.0
6.0
2023
- 10.0
-6.0
Change in
Effect on profit
GBP (percent)
before tax (USD mill)
2024
+ 10.0
30.0
2024
- 10.0
-30.0
2023
+ 10.0
36.7
2023
- 10.0
-36.7
Change in
Effect on profit
EUR (percent)
before tax (USD mill)
2024
+ 10.0
10.8
2024
- 10.0
-10.8
2023
+ 10.0
0.3
2023
- 10.0
-0.3
Interest rate risk
As most of the Group’s financing derives from bond loans which are issued in USD and at fixed interest rates, the Group does not
engage in interest rate hedging. Interest rate exposure on the RBL is considered limited and no hedging arrangement was in place
during 2024. The Group is exposed to interest rate risk on its cash deposits held at floating interest rates.
The following table illustrates the impact on DNO’s reported profit/loss before income tax in 2023 and 2024 from a change in interest
rates on that portion of interest-bearing liabilities and cash deposits deemed reasonable and possible, with all other variables held
constant.
Increase/decrease
Effect on profit
in basis points
before tax (USD mill)
2024
+/- 100
+/-7.5
2023
+/- 100
+/-7.6
Liquidity risk
Liquidity risk is the risk that suitable sources of funding for the Group’s business activities may not be available. Prudent liquidity risk
management requires sufficient cash balances, credit facilities and other financial resources to maintain financial flexibility under
dynamic market conditions. The Group’s principal sources of liquidity are operating cash flows from its producing assets in Kurdistan
and the North Sea. In addition to its operating cash flows, the Group relies on the debt capital markets for both short- and long-term
funding, see Note 18. The Group’s finance function prepares projections on a regular basis in order to plan the Group’s liquidity
requirements. These plans are updated regularly for various scenarios and form part of the basis for decision making by the Company’s
Board of Directors and the senior management.
Investment in joint venture
Foxtrot International issues cash calls to Mondoil Enterprises (see Note 13) to fund capital and operating requirements for Côte d’Ivoire
Block CI-27, which are made on a regular basis pursuant to an approved budget and work program. The cash distributions anticipated
to be received from Foxtrot International will be sufficient to enable the Company to meet all of its scheduled and anticipated obligations.
Excessive risk concentration
Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical
region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in
economic, political or other conditions. DNO’s revenues in 2024 derived primarily from production in the Tawke license in Kurdistan (see
also entitlement risk described in Note 3) and from several licenses in the North Sea. The Group actively seeks to reduce such risk
through organic growth and asset acquisitions aimed at further diversifying its revenue sources.
The tables below summarize the maturity profile of the Group’s financial liabilities based on contractual undiscounted cash flows.
Consolidated accounts
Annual Report and Accounts 2024
DNO
91
USD million
On
Less than
3 to 12
1 to 3
Over 3
At 31 December 2024
demand
3 months
months
years
years
Interest-bearing liabilities*
-
-
-
400.0
400.0
Other provisions and charges
-
-
13.4
0.8
-
Taxes payable
-
-
-
-
-
Trade and other payables
-
223.7
100.0
-
-
Total liabilities
-
223.7
113.4
400.8
400.0
USD million
On
Less than
3 to 12
1 to 3
Over 3
At 31 December 2023
demand
3 months
months
years
years
Interest-bearing liabilities*
-
-
131.2
435.0
-
Other provisions and charges
-
-
9.1
-
-
Taxes payable
-
-
4.6
-
-
Trade and other payables
-
218.0
2.0
-
-
Total liabilities
-
218.0
146.9
435.0
-
* Face value of the bonds was USD 750.0 million at yearend 2024 (USD 531.2 million at yearend 2023).
For changes in liabilities arising from financing activities, see Note 18.
Credit risk
Credit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or fail to pay amounts due causing
financial loss to the Group. The Group’s exposure to credit risk is mainly related to its outstanding trade debtors. Other counterparty
credit risk exposure to DNO is related to its cash deposits with banks and financial institutions. The table below provides an overview of
financial assets exposed to credit risk at yearend.
Years ended 31 December
USD million
2024
2023
Trade debtors (non-current portion) (Note 15)
98.2
129.8
Trade debtors (Note 15)
185.0
149.5
Other receivables (Note 15)
153.1
115.9
Tax receivables
27.5
-
Cash and cash equivalents
899.0
718.8
Total
1,362.9
1,114.1
Trade debtors from oil sales invoices in Kurdistan
The past due trade debtors are entirely related to Kurdistan. Refer to Note 15 regarding ELC assessment of the Kurdistan receivables.
The table below shows the aging of trade debtors and information about credit risk exposure using a provision matrix.
Contract
Days past due (trade debtors)
USD million
assets
Current
< 30 days
30-60 days
61-90 days
> 90 days
Total
As of 31 December 2024
Trade debtors (nominal value) (Note 15)
-
17.7
298.1
315.9
Expected credit loss rate (percent)
-
-
-
-
-
-
-
Expected credit loss rate (USD million)
-
-
-
-
-
-
-
As of 31 December 2023
Trade debtors (nominal value) (Note 15)
-
12.0
-
-
-
311.6
323.6
Expected credit loss rate (percent)
-
-
-
-
-
-
-
Expected credit loss rate (USD million)
-
-
-
-
-
-
-
Cash deposits
Credit risk from balances with banks and financial institutions is managed by the Group’s treasury function. The Group limits its
counterparty credit risk by maintaining its cash deposits with multiple banks and financial institutions with high credit ratings.
Capital management
For the purpose of the Group’s capital management, capital is defined as the total equity and debt of DNO. The Group manages and
adjusts its capital structure to ensure that it remains sufficiently funded to support its business strategy and maximize shareholder value.
If required, the capital structure may be adjusted through equity or debt transactions, asset restructuring or through other measures.
The Group monitors capital on the basis of the total equity and equity ratio, which is calculated as total equity divided by total assets.
The financial covenants of the bond loans require a minimum of USD 40 million of liquidity and that the Group maintain either an equity
ratio of 30 percent or a total equity of a minimum of USD 600 million.
Consolidated accounts
92
DNO
There is also a restriction on declaring or making any dividend payments if the liquidity of the Company is less than USD 80 million
immediately after such distribution is made, see Note 18. The equity ratio has dropped primarily due to the issue of DNO05 bond,
recognition of decommissioning liabilities in connection with acquisitions and a net loss in 2024. The table below shows the book equity
ratio at yearend.
No changes were made in the objectives, policies or processes for managing capital during 2024 and 2023.
Years ended 31 December
USD million
2024
2023
Total equity
1,080.0
1,234.8
Total assets
2,966.1
2,638.3
Equity ratio
36.4%
46.8%
Fair value measurement
Assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value
hierarchy as described below.
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The following table shows the carrying amounts and fair values of financial liabilities, including their levels in the fair value hierarchy. It
does not include the carrying amounts and fair value information for financial assets and financial liabilities not measured or disclosed at
fair value if the carrying amount is a reasonable approximation of fair value.
Carrying amount
Financial
Fair value hierarchy
liabilities
at amortized
2024 - USD million
Note
cost
Total
Date of valuation
Level 1
Level 2
Level 3
Financial liabilities measured or disclosed at fair value
Interest-bearing liabilities (non-current)
18
790.5
790.5
31 December 2024
762.4
-
50.0
Interest-bearing liabilities (current)
18
-
-
-
-
-
Carrying amount
Financial
Fair value hierarchy
liabilities
at amortized
2023 - USD million
Note
cost
Total
Date of valuation
Level 1
Level 2
Level 3
Financial liabilities measured or disclosed at fair value
Interest-bearing liabilities (non-current)
18
392.0
392.0
31 December 2023
378.1
-
-
Interest-bearing liabilities (current)
18
166.2
166.2
130.9
-
35.0
Consolidated accounts
Annual Report and Accounts 2024
DNO
93
Note 24
Commitments and contingencies
Accounting policies
Commitments and contingencies
A provision is recognized when the Group has a present obligation (legal or constructive) as a result of a past event, there is likely
that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the obligation amount.
Contingent liabilities are not recognized but are disclosed unless the possibility of an outflow of resources is remote.
Estimation uncertainty: Contingencies, provisions and litigations
By their nature, contingencies will only be resolved when one or more uncertain future event occurs or fails to occur. The
assessment of the existence and potential quantum of contingencies inherently involves the exercise of significant judgment and the
use of estimates regarding the outcome of future events. Management uses its judgment to evaluate certain provisions and legal
disputes in order to ensure the correct accounting treatment.
Contingent liabilities and contingent assets
Disputes with Ministry of Oil and Minerals of Yemen – Block 53
The Ministry of Oil and Minerals (MOM or Ministry) of Yemen filed an arbitration claim against operator Dove Energy Limited and the
other partners (including DNO Yemen AS) for allegedly wrongful withdrawal from Block 53. An arbitral award was rendered in July 2019
partially in the Ministry’s favor in the amount of USD 29 million (out of a USD 171 million claim). The Contractor (including DNO Yemen
AS) filed for annulment proceedings in the Paris Court d’Appel which is still pending before the French Supreme Court.
In 2023, a net amount of USD 29.2 million was paid by DNO Yemen AS to MOM in connection with arbitral awards resolving disputes
regarding
is liable, and an award has been rendered in DNO’s favor.
Other claims
During the normal course of its business, the Group may be involved in other legal proceedings and unresolved claims. The Group has
made provisions in its consolidated financial statements for probable liabilities related to litigation and claims based on management's
best judgment and in line with IAS 37. Other than what is set out above, DNO is not aware of any governmental, legal or arbitral
proceedings (including any such proceedings which are pending or threatened) initiated against DNO and which may have significant
effects on DNO’s results of operations, cash flows or financial position.
Capital commitments and abandonment expenditures
Based on work plans as of yearend 2024 and contingent on future market conditions including development in the oil price, and
outcome of ongoing discussions related to recovery of arrears for past oil deliveries to the KRG and payment terms and conditions for
any future oil exports, the Group’s projected operational spend for 2025 comprising of capital and exploration expenditures,
abandonment expenditures and operational expenditures amounts to USD 750 million. The projected operational spend reflects the
Group’s share of planned drilling and facility investments and decommissioning plan in its licenses for 2025. These work plans are
subject to revisions.
Guarantees at yearend
The Company has issued parent company guarantees to authorities in Norway and the UK on behalf of certain subsidiaries that
participate in licenses on the NCS and the UKCS. The Company has furthermore issued parent company guarantees in connection with
surety bonds and asset transactions.
Liability for damages/insurance
Installations and operations are covered by various insurance policies.
Consolidated accounts
94
DNO
Note 25
Earnings per share
1 January - 31 December
2024
2023
Net profit/loss attributable to ordinary equity holders of the parent (USD million)
-27.1
18.6
Weighted average number of ordinary shares excluding treasury shares (millions)
975.00
980.04
Earnings per share, basic (USD per share)
-0.03
0.02
Earnings per share, diluted (USD per share)
-0.03
0.02
Basic earnings per share are calculated by dividing the net profit/loss attributable to equity holders by the weighted average number of
outstanding ordinary shares during the period, excluding ordinary shares purchased and held as treasury shares.
The Company did not have any potential dilutive shares at yearend 2024.
Consolidated accounts
Annual Report and Accounts 2024
DNO
95
Note 26
Group companies and other companies
Ownership and voting
USD million
Office
interest (percent)
Shares in the Company's subsidiaries
DNO Iraq AS
Norway
100
DNO UK Limited
United Kingdom
100
DNO Mena AS
Norway
100
DNO Technical Services AS
Norway
100
DNO Yemen AS
Norway
100
DNO North Sea plc
United Kingdom
100
Mondoil Enterprises LLC
United States
100
Shares in subsidiaries owned through subsidiaries
DNO Mena AS
West Limited
Bermuda
100
DNO Tunisia Limited
Guernsey
100
RAK Petroleum Public Company Limited
United Arab Emirates
100
DNO North Sea plc
DNO Norge AS
Norway
100
DNO North Sea (U.K.) Limited
United Kingdom
100
DNO North Sea (ROGB) Limited
United Kingdom
100
DNO North Sea (Energy) Limited
United Kingdom
100
DNO Exploration UK Limited
United Kingdom
100
DNO North Sea SIP EBT Limited
United Kingdom
100
Shares in other entities, indirectly (equity accounted)
Mondoil Côte d’Ivoire LLC
United States
50
Foxtrot International
Cayman Islands
33.33
The Group’s operations in Kurdistan are carried out through its subsidiary DNO Iraq AS, while activities on the NCS are carried out
through DNO Norge AS. UKCS activities are carried out through DNO North Sea (U.K.) Limited, DNO North Sea (ROGB) Limited and
DNO Exploration UK Limited. DNO Exploration UK Limited was disposed from DNO ASA to DNO North Sea plc in 2024. Activities in
Côte d'Ivoire are carried out by Foxtrot International, in which the Company’s indirect ownership of 33.33 percent is accounted for using
the equity method. DNO ASA, DNO Technical Services AS and DNO North Sea plc provide technical support and services to the
various companies in the Group. The other subsidiaries from the table above had minimal activity during the year. In 2024 DNO Oman
Limited was renamed to West Limited and DNO Oman Block 8 Limited was liquidated.
Consolidated accounts
96
DNO
Note 27
Oil and gas reserves (unaudited)
Estimation uncertainty: Reserves and resources estimates
DNO’s reserves and contingent resources are estimated and classified by the Company in accordance with the rules and guidelines
of the Society of Petroleum Engineers (SPE) and are in conformity with requirements from the Oslo Stock Exchange for the reporting
of reserves and resources. All estimates of reserves and resources involve uncertainty.
Important factors that could cause actual results to differ from the estimates include, but are not limited to: technical, geological and
geotechnical conditions; economic and market conditions; oil and gas prices; changes in government regulations; political
developments; interest rates; and currency exchange rates. Specific parameters of uncertainty related to the field/reservoir include
but are not limited to: reservoir pressure and porosity; recovery factors; water cut development; production decline rates; gas/oil
ratios; and oil properties.
Changes in commodity prices and costs may impact economic cut-off and remaining reserves, which may change the timing of any
decommissioning activities. Future changes to estimated reserves can also have a material effect on depreciation, impairment of oil
and gas fields and operating results. The Group may also not be able to commercially develop its contingent resources that are used
in impairment assessments or acquisition accounting where the fair value approach is applied.
Net reserves by region/field as of 31 December 2024
Proven (1P)
Proven and probable (2P)
Proven, probable and possible (3P)
MMboe
Oil
NGL
Gas
Total
Oil
NGL
Gas
Total
Oil
NGL
Gas
Total
Tawke
91.6
-
-
91.6
127.1
-
-
127.1
142.1
-
-
142.1
Peshkabir
51.2
-
-
51.2
97.8
-
-
97.8
115.8
-
-
115.8
Kurdistan
142.8
-
-
142.8
224.9
-
-
224.9
257.9
-
-
257.9
Arran
0.3
-
1.4
1.7
0.4
-
2.0
2.4
0.6
-
2.9
3.6
Blane
0.3
0.0
-
0.3
0.4
0.0
-
0.4
0.5
0.0
-
0.5
Enoch
0.0
-
-
0.0
0.0
-
-
0.0
0.0
-
-
0.0
UK
0.6
0.0
1.4
1.9
0.8
0.0
2.0
2.8
1.2
0.0
2.9
4.1
Alve
0.4
0.8
3.2
4.3
0.4
0.9
3.3
4.7
0.5
1.0
3.5
5.0
Andvare
0.1
0.5
2.5
3.1
0.2
0.8
3.5
4.5
0.3
1.2
4.9
6.4
Berling
1.5
1.1
4.8
7.3
2.2
1.6
6.8
10.6
3.1
2.2
8.8
14.2
Bestla
2.0
0.2
0.7
2.9
5.7
0.5
1.4
7.6
11.2
0.7
2.5
14.4
Brage
0.8
0.0
0.0
0.8
1.4
0.0
0.1
1.6
1.9
0.1
0.3
2.3
Fenja
0.4
0.1
0.7
1.1
0.8
0.1
0.9
1.8
1.3
0.1
1.3
2.7
Marulk
0.0
0.0
0.5
0.5
0.1
0.1
1.0
1.2
0.1
0.2
1.7
2.0
Norne
0.3
0.0
0.1
0.4
0.4
0.0
0.1
0.5
0.6
0.0
0.2
0.8
Oda
0.4
0.0
0.0
0.4
0.5
0.0
0.0
0.5
0.6
0.0
0.0
0.7
Skuld
0.3
0.0
0.2
0.5
0.4
0.0
0.2
0.6
0.6
0.0
0.2
0.7
Tambar
0.4
0.0
0.1
0.5
1.1
0.1
0.2
1.4
1.8
0.1
0.3
2.1
Tambar East
0.9
0.1
0.1
1.1
1.7
0.1
0.2
2.0
2.4
0.2
0.3
2.8
Trym
0.2
-
1.0
1.1
0.3
-
1.2
1.5
0.4
-
1.5
1.8
Ula
0.5
0.0
-
0.5
0.9
0.1
-
0.9
1.2
0.1
-
1.4
Urd
0.4
-
-
0.4
0.7
-
-
0.7
0.9
-
-
0.9
Verdande
1.8
0.0
0.3
2.1
3.0
0.1
0.5
3.6
4.2
0.1
0.8
5.1
Vilje
0.6
-
0.0
0.6
1.2
-
0.1
1.3
2.5
-
0.1
2.7
Norway
10.8
2.9
13.9
27.7
20.9
4.5
19.5
44.9
33.6
6.1
26.3
66.0
Subtotal Consolidated reserves
172.5
272.6
328.0
Côte d’Ivoire CI-27
0.0
-
6.4
6.4
0.1
-
9.3
9.4
0.2
-
11.9
12.0
West Africa
0.0
-
6.4
6.4
0.1
-
9.3
9.4
0.2
-
11.9
12.0
Subtotal Equity accounted reserves
6.4
9.4
12.0
Total Group
178.9
281.9
340.1
Consolidated accounts
Annual Report and Accounts 2024
DNO
97
Reserves development by segment (net to DNO)
Kurdistan
North Sea
Subtotal
West Africa
Total Group
MMboe
1P
2P
3P
1P
2P
3P
1P
2P
3P
1P
2P
3P
1P
2P
3P
As of 1 January 2023
190.9
245.3
316.0
25.0
36.5
49.4
215.9
281.8
365.4
4.4
10.3
21.3
220.3
292.1
386.7
Production
-12.7
-12.7
-12.7
-5.2
-5.2
-5.2
-17.9
-17.9
-17.9
-1.3
-1.3
-1.3
-19.1
-19.1
-19.1
Acquisitions
-
-
-
-
-
-
-
-
-
4.5
1.5
-6.9
4.5
1.5
-6.9
Divestments
-
-
-
-
-
-
-
-
-
-
-
-
Extensions and discoveries
-
-
-
-
-
-
-
-
-
-
-
-
New developments
-
-
-
-
-
-
-
-
-
-
-
-
Revision of previous estimates
-3.2
11.9
-5.3
4.0
3.8
5.1
0.9
15.7
-0.2
0.9
15.7
-0.2
As of 31 December 2023
175.1
244.5
298.0
23.8
35.1
49.3
198.9
279.6
347.3
7.6
10.5
13.2
206.4
290.1
360.5
Production
-21.6
-21.6
-21.6
-5.6
-5.6
-5.6
-27.1
-27.1
-27.1
-1.1
-1.1
-1.1
-28.3
-28.3
-28.3
Acquisitions
-
-
-
5.9
9.0
12.8
5.9
9.0
12.8
5.9
9.0
12.8
Divestments
-
-
-
-1.0
-1.2
-1.4
-1.0
-1.2
-1.4
-1.0
-1.2
-1.4
Extensions and discoveries
-
-
-
-
-
-
-
-
-
-
-
-
New developments
-
-
-
2.9
7.6
14.4
2.9
7.6
14.4
2.9
7.6
14.4
Revision of previous estimates
-10.7
1.9
-18.5
3.6
2.8
0.5
-7.1
4.7
-18.0
-7.1
4.7
-18.0
As of 31 December 2024
142.8
224.9
257.9
29.6
47.7
70.2
172.5
272.6
328.0
6.4
9.4
12.0
178.9
281.9
340.1
Net Entitlement (NE) reserves by segment
Kurdistan
North Sea
Subtotal
West Africa
Total Group
MMboe
1P
2P
3P
1P
2P
3P
1P
2P
3P
1P
2P
3P
1P
2P
3P
As of 31 December 2023
60.9
74.0
82.7
23.8
35.1
49.3
84.7
109.1
132.0
4.9
6.8
8.3
89.6
115.9
140.3
As of 31 December 2024
50.3
69.4
75.0
29.6
47.7
70.2
80.0
117.1
145.1
4.2
6.3
7.8
84.2
123.4
152.9
The reserves and contingent resources are according to the ASRR dated 2 April 2025. Reported reserves fall within class 1-3 of the
NOD classification and 2C resources fall within class 4-7.
The Company’s ASRR has been prepared in accordance with the Oslo Stock Exchange listing and disclosure requirements Circular No.
1/2013. International petroleum consultants DeGolyer and MacNaughton (D&M) carried out an independent assessment of the Tawke
license (containing the Tawke and Peshkabir fields) and the Baeshiqa license (containing the Baeshiqa and Zartik structures) in the
Kurdistan region of Iraq (Kurdistan). International petroleum consultants RPS Energy Consultants (RPS) carried out an independent
assessment of DNO reserves and resources in Norway and the United Kingdom (UK). In Norway, contingent resources also include
volumes that are classified as RC7F (production not evaluated) as reported by the NOD. In 2023, the international petroleum
consultants Beicip-Franlab carried out an independent assessment of DNO's CI-27 license (held through its indirect 33.33 percent
interest in the operating entity) in Côte d’Ivoire. For the P2543 license (Agar) in the UK and Block 47 in Yemen, DNO’s contingent
resources are internally assessed. The Dutch acreage held by DNO does not hold any reserves or resources.
At yearend 2024, DNO’s net 1P reserves stood at 178.9 MMboe, compared to 206.4 MMboe at yearend 2023, after adjusting for
production during the year and changes due to acquisitions and divestments, reclassifications and technical revisions. On a 2P basis,
DNO’s net reserves stood at 281.9 MMboe, compared to 290.1 MMboe at yearend 2023. On a 3P basis, DNO’s net reserves were
340.1 MMboe, compared to 360.5 MMboe at yearend 2023. DNO’s net contingent (2C) resources were 213.4 MMboe, up from 205.0
MMboe at yearend 2023 after adjusting for new discoveries, volumes moved to reserves and technical revisions.
While net production of 28.3 MMboe during 2024 drew on DNO’s reserves, the impact was partially offset by acquisitions, volumes
moved up from contingent resources, as well as technical revisions. Notably, DNO's 2024 acquisitions of a stake in the Arran field
offshore UK and Norne area assets in Norway added a total of 4.9 MMboe in net 1P reserves, 7.8 MMboe in net 2P reserves and 11.4
MMboe in net 3P reserves (after allowing for divestment of Ringhorne East, used as part of the consideration for the Norne area
assets). Volumes moved from contingent resources to reserves all relate to the 2024 sanctioning of the Bestla field development in
Norway, which added 2.9 MMboe to 1P reserves, 7.6 MMboe to 2P reserves and 14.4 MMboe to 3P reserves, all on a net basis.
The Company’s net yearend 2024 Reserve Life Index (R/P) stood at 6.3 years on a 1P reserves basis, 10.0 years on a 2P reserves
basis and 12.0 years on a 3P reserves basis.
Net reserves in DNO’s licenses governed by PSCs (Kurdistan and Côte d’Ivoire) are based on the participation interest. Net Entitlement
(NE) reserves are net to DNO after royalty. Net reserves in these licenses reflect DNO’s share before government take while NE
reserves reflect DNO’s share after government take. NE reserves are based on economic evaluation of the license agreements,
incorporating projections of future production, costs and oil and gas prices. NE volumes may therefore fluctuate over time, even if there
are no changes in the underlying gross and net volumes.
Net and NE reserves in DNO’s licenses not governed by PSCs (Norway and the UK) are equivalent and reflect gross reserves multiplied
by the Company’s participating interest.
Consolidated accounts
98
DNO
Note 28
Oil and gas license portfolio
Kurdistan licenses
At yearend 2024, DNO held interests in two licenses in Kurdistan. The Tawke license contains the producing Tawke and Peshkabir
fields. The Baeshiqa license contains two large structures with multiple independent stacked target reservoirs, including in the
Cretaceous, Jurassic and Triassic formations. The structures at Baeshiqa and Zartik have the potential to be part of a single
accumulation of hydrocarbons at one or more of the geological formation intervals.
North Sea (Norway, the UK and other)
At yearend 2024, DNO held 85 offshore licenses in Norway, seven offshore licenses in the UK and one offshore license in the
Netherlands.
West Africa (Côte d’Ivoire)
Through a one-third stake in the operating company, Foxtrot International, DNO holds a nine percent interest in Côte d’Ivoire’s Block CI-
27. The block contains the Foxtrot gas field, the Mahi gas field, the Marlin oil and gas field and the Manta gas field. Formerly, Foxtrot
International also operated the CI-12 exploration block, from which it withdrew in October 2024 after having fulfilled the exploration
obligations pertaining to the license. In accordance with IFRS, DNO’s indirect interest in Foxtrot International is accounted for using the
equity method (see Note 13).
Other
At yearend 2024, DNO held one onshore license in Yemen.
As is customary in the oil and gas industry, most of the Group's assets are held in partnership with other companies. Below is an
overview of the Group's licenses, which are held through several wholly-owned subsidiary companies.
As of 31 December 2024
Held through DNO as a subsidiary:
Participating
interest
Region/license
(percent)
Operator
Partner(s)
Kurdistan
Tawke PSC
75.0
DNO Iraq AS
Genel Energy International Limited
Baeshiqa PSC
64.0
DNO Iraq AS
Turkish Energy Company Limited, Kurdistan Regional Government
Norway
PL006 C (SE Tor)
65.0
DNO Norge AS
Aker BP ASA
PL018ES
45.0
DNO Norge AS
Sval Energi AS, A/S Norske shell
PL019 (Ula)
20.0
Aker BP ASA
DNO Norge AS
PL019 E (Ula)
20.0
Aker BP ASA
DNO Norge AS
PL019 F (Ula)
45.0
Aker BP ASA
DNO Norge AS
PL036 D (Vilje)
28.9
Aker BP ASA
DNO Norge AS, ORLEN Upstream Norway AS
PL048 D (Enoch)
9.3
Equinor Energy AS
DNO Norge AS, Petrolia NOCO AS, Aker BP ASA
PL053 B (Brage)
14.3
OKEA ASA
DNO Norge AS, Lime Petroleum AS, Petrolia Noco AS, M Vest Energy AS
PL055 (Brage)
14.3
OKEA ASA
DNO Norge AS, Lime Petroleum AS, Petrolia Noco AS, M Vest Energy AS
PL055 B (Brage)
14.3
OKEA ASA
DNO Norge AS, Lime Petroleum AS, Petrolia Noco AS, M Vest Energy AS
PL055 D (Brage)
14.3
OKEA ASA
DNO Norge AS, Lime Petroleum AS, Petrolia Noco AS, M Vest Energy AS
PL055 E (Brage)
14.3
OKEA ASA
DNO Norge AS, Lime Petroleum AS, Petrolia Noco AS, M Vest Energy AS
PL055 FS (Brage)
14.3
OKEA ASA
DNO Norge AS, Lime Petroleum AS, Petrolia Noco AS, M Vest Energy AS
PL065 (Tambar)
45.0
Aker BP ASA
DNO Norge AS
PL065 B (Tambar)
45.0
Aker BP ASA
DNO Norge AS
PL1049
40.0
DNO Norge AS
Concedo AS, Petoro AS
PL1084
40.0
Aker BP ASA
DNO Norge AS
PL1085
25.0
Aker BP ASA
DNO Norge AS, Petoro AS
PL1086
50.0
DNO Norge AS
Source Energy AS, Petoro AS, Aker BP ASA
PL1102
30.0
Aker BP ASA
DNO Norge AS, Equinor Energy AS
PL1102 B
30.0
Aker BP ASA
DNO Norge AS, Equinor Energy AS
PL1108
40.0
DNO Norge AS
Pandion Energy AS, OKEA ASA
PL1109*
20.0
OMV (Norge) AS
DNO Norge AS, Pandion Energy AS, Aker BP ASA
PL1119*
10.0
Equinor Energy AS
OKEA ASA, Pandion Energy AS, DNO Norge AS
PL1120
40.0
DNO Norge AS
Equinor Energy AS, Vår Energi AS, Harbour Energy Norge AS
PL1145
60.0
DNO Norge AS
AkerBP ASA
PL1147
20.0
Aker BP ASA
DNO Norge AS, Equinor Energy AS,
PL1148
30.0
Wellesley Petroleum AS
DNO Norge AS, AkerBP ASA, Equinor Energy AS
PL1148 B
30.0
Wellesley Petroleum AS
DNO Norge AS, AkerBP ASA, Equinor Energy AS
PL1148 CS
30.0
Wellesley Petroleum AS
DNO Norge AS, AkerBP ASA, Equinor Energy AS
PL1150 S
40.0
OKEA ASA
DNO Norge AS
PL1151
20.0
Harbour Energy Norge AS
DNO Norge AS, AkerBP ASA, Pandion Energy AS, Equinor Energy AS
PL1158
40.0
Aker BP ASA
DNO Norge AS, Sval Energi AS
PL1171
50.0
Aker BP ASA
DNO Norge AS
PL1172
30.0
Aker BP ASA
DNO Norge AS, ORLEN Upstream Norway AS
Consolidated accounts
Annual Report and Accounts 2024
DNO
99
PL1175
30.0
Aker BP ASA
DNO Norge AS, ORLEN Upstream Norway AS
PL1182 S
40.0
DNO Norge AS
AkerBP ASA, Japex Norge AS, Concedo AS
PL1186
20.0
Equinor Energy AS
DNO Norge AS, OKEA ASA, Harbour Energy Norge AS
PL1187
30.0
OKEA ASA
DNO Norge AS, M Vest Energy AS, Harbour Energy Norge AS
PL1198
20.0
Aker BP ASA
DNO Norge AS, Source Energy AS, Petoro AS
PL1203
20.0
Vår Energi ASA
DNO Norge AS, Equinor Energy AS, Petoro AS
PL1204
60.0
DNO Norge AS
Equinor Energy AS
PL1205
40.0
ConocoPhillips Skandinavia AS
DNO Norge AS
PL1209
40.0
DNO Norge AS
Equinor Energy AS, Concedo AS
PL1212 S
40.0
Equinor Energy AS
DNO Norge AS, Japex Norge AS
PL1213 S
30.0
Vår Energi ASA
DNO Norge AS, Harbour Energy Norge AS
PL1216
40.0
DNO Norge AS
Harbour Energy Norge AS, Source Energy AS
PL1226
40.0
Equinor Energy AS
DNO Norge AS
PL1228
30.0
OMV (Norge) AS
DNO Norge AS, Equinor Energy AS
PL1229
30.0
Sval Energi AS
DNO Norge AS, Harbour Energy Norge AS, ORLEN Upstream Norway AS
PL122 (Marulk)
37.0
DNO Norge AS
Equinor Energy AS, ORLEN Upstream Norway AS
PL122 B (Marulk)
37.0
DNO Norge AS
Equinor Energy AS, ORLEN Upstream Norway AS
PL122 C (Marulk)
37.0
DNO Norge AS
Equinor Energy AS, ORLEN Upstream Norway AS
PL122 D (Marulk)
37.0
DNO Norge AS
Equinor Energy AS, ORLEN Upstream Norway AS
PL128 (Norne)
11.5
Equinor Energy AS
DNO Norge As, Petoro As
PL128 B (Norne)
11.5
Equinor Energy AS
DNO Norge As, Petoro As
PL128 D (Norne)
11.5
Equinor Energy AS
DNO Norge As, Petoro As
PL128 E (Norne)
11.5
Equinor Energy AS
DNO Norge As, Petoro As
PL147 (Trym)
50.0
DNO Norge AS
Sval Energi AS
PL159 B (Alve)
32.0
Equinor Energy AS
DNO Norge AS, ORLEN Upstream Norway AS
PL159 G (Alve)
32.0
Equinor Energy AS
DNO Norge AS, ORLEN Upstream Norway AS
PL185 (Brage)
14.3
OKEA ASA
DNO Norge AS, Lime Petroleum AS, Petrolia Noco AS, M Vest Energy AS
PL248 F
20.0
Harbour Energy Norge AS
DNO Norge AS, Petoro AS
PL248 GS
20.0
Harbour Energy Norge AS
DNO Norge AS, Petoro AS
PL248 K
20.0
Harbour Energy Norge AS
DNO Norge AS, Petoro AS
PL293 B
29.0
Equinor Energy AS
DNO Norge AS, INPEX Idemitsu Petroleum Norge AS, Japex Norge AS
PL293 CS
29.0
Equinor Energy AS
DNO Norge AS, INPEX Idemitsu Petroleum Norge AS, Japex Norge AS
PL300 (Tambar Øst)
45.0
Aker BP ASA
DNO Norge AS
PL405 (Oda)
15.0
Sval Energi AS
DNO Norge AS, Aker BP ASA
PL586 (Fenja)
7.5
Vår Energi ASA
DNO Norge AS, Sval Energi AS
PL586 B (Fenja)
7.5
Vår Energi ASA
DNO Norge AS, Sval Energi AS
PL644 (Berling)
30.0
OMV (Norge) AS
DNO Norge AS, Equinor Energy AS
PL644 B (Berling)
30.0
OMV (Norge) AS
DNO Norge AS, Equinor Energy AS
PL644 C (Berling)
30.0
OMV (Norge) AS
DNO Norge AS, Equinor Energy AS
PL644 D (Berling)
30.0
OMV (Norge) AS
DNO Norge AS, Equinor Energy AS
PL740 (Bestla)
39.3
OKEA ASA
DNO Norge AS, Lime Petroleum AS, Petrolia Noco AS, M Vest Energy AS
PL827 S
49.0
Equinor Energy AS
DNO Norge AS
PL827 SB
49.0
Equinor Energy AS
DNO Norge AS
PL836 S
30.0
Harbour Energy Norge AS
DNO Norge AS, Equinor Energy AS
PL836 SB
30.0
Harbour Energy Norge AS
DNO Norge AS, Equinor Energy AS
PL923
20.0
Equinor Energy AS
DNO Norge AS, Petoro AS
PL923 B
20.0
Equinor Energy AS
DNO Norge AS, Petoro AS
PL929
10.0
Vår Energi ASA
DNO Norge AS, Pandion Energy AS, Harbour Energy Norge AS, Aker BP ASA
PL984
30.0
DNO Norge AS
Vår Energi AS, Source Energy AS, Equinor Energy AS, Aker BP ASA
PL984 BS
30.0
DNO Norge AS
Vår Energi AS, Source Energy AS, Equinor Energy AS, Aker BP ASA
*DNO farmed into a 10 percent stake in the PL1119 license prior to the spud of the Mistral exploration well in late December 2024. In return, DNO gave up a 10 percent stake in the
PL1109 license containing the Horatio prospect, retaining 20 percent
UK
P111
54.3
Repsol Sinopec Resources UK Ltd
DNO North Sea (U.K.) Ltd, DNO North Sea (ROGB) Ltd, Dana Petroleum (BVUK)
Ltd.
P219
18.2
Repsol Sinopec North Sea Ltd
DNO North Sea (ROGB) Ltd, Dana Petroleum (BVUK) Ltd, Waldorf Production UK
Ltd
P255
45.0
Shell U.K. Ltd
DNO North Sea (U.K.) Ltd, Spirit Energy Resources Ltd
P1720 (Arran)
50.0
Rockrose UKCS4 Ltd
DNO North Sea (UK) Ltd
P2543
50.0
DNO North Sea (U.K.) Ltd
Aker BP UK Ltd
P359 Area A (Arran)
18.9
Shell U.K. Ltd
DNO North Sea (UK) Ltd, Rockrose UKCS4 Ltd
P359 Area B (Arran)
18.9
Shell U.K. Ltd
DNO North Sea (UK) Ltd, Rockrose UKCS4 Ltd
Netherlands
D18a
2.5
Neptune E&P UKCS Ltd
DNO North Sea (U.K.) Ltd, Ineos UK SNS Ltd, Premier Oil E&P UK Ltd
Yemen
Block 47
64.0
DNO Yemen AS
The Yemen Company, Geopetrol Hadramaut Incorporated
Held through equity-accounted investment Mondoil Côte d’Ivoire/Foxtrot International as a joint venture (Note 13):
Côte d’Ivoire
Block CI-27
27.3
Foxtrot International
SECI SA, Petroci
Consolidated accounts
100
DNO
As of 31 December 2023
Held through DNO as a subsidiary:
Participating
interest
Region/license
(percent)
Operator
Partner(s)
Kurdistan
Tawke PSC
75.0
DNO Iraq AS
Genel Energy International Limited
Baeshiqa PSC
64.0
DNO Iraq AS
Turkish Energy Company Limited, Kurdistan Regional Government
Norway
PL006 C (SE Tor)
65.0
DNO Norge AS
Aker BP ASA
PL018 ES
45.0
A/S Norske Shell
DNO Norge AS, Sval Energi AS
PL019 (Ula)
20.0
Aker BP ASA
DNO Norge AS
PL019 E (Ula)
20.0
Aker BP ASA
DNO Norge AS
PL019 F (Ula)
45.0
Aker BP ASA
DNO Norge AS
PL036 D (Vilje)
28.9
Aker BP ASA
DNO Norge AS, PGNiG Upstream Norway AS
PL048 D (Enoch)
9.3
Equinor Energy AS
DNO Norge AS, Petrolia NOCO AS, Aker BP ASA
PL053 B (Brage)
14.3
OKEA ASA
DNO Norge AS, Lime Petroleum AS, Petrolia NOCO AS, M Vest Energy AS
PL055 (Brage)
14.3
OKEA ASA
DNO Norge AS, Lime Petroleum AS, Petrolia NOCO AS, M Vest Energy AS
PL055 B (Brage)
14.3
OKEA ASA
DNO Norge AS, Lime Petroleum AS, Petrolia NOCO AS, M Vest Energy AS
PL055 D (Brage)
14.3
OKEA ASA
DNO Norge AS, Lime Petroleum AS, Petrolia NOCO AS, M Vest Energy AS
PL055 E (Brage)
14.3
OKEA ASA
DNO Norge AS, Lime Petroleum AS, Petrolia NOCO AS, M Vest Energy AS
PL065 (Tambar)
45.0
Aker BP ASA
DNO Norge AS
PL065 B (Tambar)
45.0
Aker BP ASA
DNO Norge AS
PL1049
40.0
DNO Norge AS
Longboat Japex Norge AS, Petoro AS
PL1083
30.0
Aker BP ASA
DNO Norge AS, Petoro AS
PL1084
40.0
Aker BP ASA
DNO Norge AS
PL1085
25.0
Aker BP ASA
DNO Norge AS, Petoro AS
PL1086
50.0
DNO Norge AS
Source Energy AS, Petoro AS
PL1102
30.0
Aker BP ASA
DNO Norge AS, Equinor Energy AS
PL1106
40.0
DNO Norge AS
Petoro AS, Petrolia NOCO AS, Aker BP ASA
PL1108
40.0
DNO Norge AS
Pandion Energy AS, OKEA ASA
PL1109
30.0
OMV (Norge) AS
DNO Norge AS, Pandion Energy AS
PL1112
20.0
A/S Norske Shell
DNO Norge AS, Neptune Energy Norge AS, Sval Energi AS
PL1120
40.0
DNO Norge AS
Equinor Energy AS, Vår Energi ASA, Wintershall Dea Norge AS
PL1145
60.0
DNO Norge AS
Aker BP ASA
PL1146
25.0
ConocoPhillips Skandinavia AS
DNO Norge AS
PL1146B
25.0
ConocoPhillips Skandinavia AS
DNO Norge AS
PL1147
20.0
Sval Energi AS
DNO Norge AS, Equinor Energy AS, Aker BP ASA
PL1148
30.0
Wellesley Petroleum AS
DNO Norge AS, Aker BP ASA, Equinor Energy AS
PL1148B
30.0
Wellesley Petroleum AS
DNO Norge AS, Aker BP ASA, Equinor Energy AS
PL1151
20.0
Wintershall Dea Norge AS
DNO Norge AS, Aker BP ASA, Pandion Energy AS
PL1158
40.0
Aker BP ASA
DNO Norge AS, Sval Energi AS
PL1160
60.0
DNO Norge AS
Sval Energi AS
PL1171
50.0
Aker BP ASA
DNO Norge AS
PL1172
30.0
Aker BP ASA
DNO Norge AS, PGNiG Upstream Norway AS
PL1175
30.0
Aker BP ASA
DNO Norge AS, PGNiG Upstream Norway AS
PL1182S
40.0
DNO Norge AS
Aker BP ASA, Longboat Japex Norge AS
PL1186
20.0
Equinor Energy AS
DNO Norge AS, OKEA ASA, Wintershall DEA Norge AS
PL1187
30.0
OKEA ASA
DNO Norge AS, M Vest Energy AS, Wintershall DEA Norge AS
PL122 (Marulk)
17.0
Vår Energi ASA
DNO Norge AS, Equinor Energy AS, PGNiG Upstream Norway AS
PL122 B (Marulk)
17.0
Vår Energi ASA
DNO Norge AS, Equinor Energy AS, PGNiG Upstream Norway AS
PL122 C (Marulk)
17.0
Vår Energi ASA
DNO Norge AS, Equinor Energy AS, PGNiG Upstream Norway AS
PL122 D (Marulk)
17.0
Vår Energi ASA
DNO Norge AS, Equinor Energy AS, PGNiG Upstream Norway AS
PL147 (Trym)
50.0
DNO Norge AS
Sval Energi AS
PL159 B (Alve)
32.0
Equinor Energy AS
DNO Norge AS, PGNiG Upstream Norway AS
PL159 G (Alve)
32.0
Equinor Energy AS
DNO Norge AS, PGNiG Upstream Norway AS
PL169 E
(Ringhorne Øst)
87.0
DNO Norge AS
Vår Energi ASA
PL185 (Brage)
14.3
OKEA ASA
DNO Norge AS, Lime Petroleum AS, Petrolia NOCO AS, M Vest Energy AS
PL248 F
20.0
Wintershall Dea Norge AS
DNO Norge AS, Petoro AS
PL248 GS
20.0
Wintershall Dea Norge AS
DNO Norge AS, Petoro AS
PL248 K
20.0
Wintershall Dea Norge AS
DNO Norge AS, Petoro AS
PL293 B
29.0
Equinor Energy AS
DNO Norge AS, INPEX Idemitsu Norge AS, Longboat Japex Norge AS
PL293 CS
29.0
Equinor Energy AS
DNO Norge AS, INPEX Idemitsu Norge AS, Longboat Japex Norge AS
PL300 (Tambar Øst)
45.0
Aker BP ASA
DNO Norge AS
PL405 (Oda)
15.0
Sval Energi AS
DNO Norge AS, Aker BP ASA
PL586 (Fenja)
7.5
Neptune Energy Norge AS
DNO Norge AS, Vår Energi ASA, Sval Energi AS
PL586 B (Fenja)
7.5
Neptune Energy Norge AS
DNO Norge AS, Vår Energi ASA, Sval Energi AS
PL644 (Berling)
30.0
OMV (Norge) AS
DNO Norge AS, Equinor Energy AS
PL644 B (Berling)
30.0
OMV (Norge) AS
DNO Norge AS, Equinor Energy AS
PL644 C (Berling)
30.0
OMV (Norge) AS
DNO Norge AS, Equinor Energy AS
PL740 (Brasse)
39.3
OKEA ASA
DNO Norge AS, Lime Petroleum AS, M Vest Energy AS
PL827 S
49.0
Equinor Energy AS
DNO Norge AS
PL827 SB
49.0
Equinor Energy AS
DNO Norge AS
PL836 S
30.0
Wintershall Dea Norge AS
DNO Norge AS, Equinor Energy AS
PL836 SB
30.0
Wintershall Dea Norge AS
DNO Norge AS, Equinor Energy AS
PL923
20.0
Equinor Energy AS
DNO Norge AS, Petoro AS
Consolidated accounts
Annual Report and Accounts 2024
DNO
101
PL923 B
20.0
Equinor Energy AS
DNO Norge AS, Petoro AS
PL929
10.0
Neptune Energy Norge AS
DNO Norge AS, Pandion Energy AS, Wintershall Dea Norge AS, AkerBP ASA
PL969
45.0
A/S Norske Shell
DNO Norge AS, Sval Energi AS
PL969B
45.0
A/S Norske Shell
DNO Norge AS, Sval Energi AS
PL984
30.0
DNO Norge AS
Vår Energi ASA, Source Energy AS, Equinor Energy AS, AkerBP ASA
PL984 BS
30.0
DNO Norge AS
Vår Energi ASA, Source Energy AS, Equinor Energy AS, AkerBP ASA
UK
P111
54.3
BRITOIL LIMITED
DNO North Sea (U.K.) Ltd, DNO North Sea (ROGB) Ltd, Dana Petroleum (BVUK)
Ltd.
P219
18.2
Repsol Sinopec North Sea Ltd
DNO North Sea (ROGB) Ltd, Dana Petroleum (BVUK) Ltd, Waldorf Production UK
Ltd
P255
45.0
Shell U.K. Ltd
DNO North Sea (U.K.) Ltd, Spirit Energy Resources Ltd
P2543
50.0
DNO North Sea (U.K.) Ltd
Aker BP ASA
Netherlands
D18a
2.5
Neptune E&P UKCS Ltd
DNO North Sea (U.K.) Ltd, Ineos UK SNS Ltd, Premier Oil E&P UK Ltd
Yemen
Block 47
64.0
DNO Yemen AS
The Yemen Company, Geopetrol Hadramaut Incorporated
Held through equity-accounted investment Mondoil Côte d’Ivoire/Foxtrot International as a joint venture (Note 13):
Côte d’Ivoire
Block CI-27
27.3
Foxtrot International
SECI SA, Petroci
Block CI-12
24.0
Foxtrot International
SECI SA, Petroci
Consolidated accounts
102
DNO
Note 29
Significant events after the reporting date
Accounting policies
Significant events after the reporting date
Adjusting events are those providing evidence of conditions existing at the end of the reporting period, whereas non-adjusting events
are indicative of conditions arising after the reporting period (the latter being disclosed where material).
DNO receives 13 awards in Norway's APA licensing round
On 14 January 2025, the Company announced that its wholly-owned subsidiary DNO Norge AS had been awarded participation in 13
exploration licenses, of which three are operatorships, under Norway's APA 2024 licensing round. Of the 13 new licenses, 10 are in the
North Sea and three in the Norwegian Sea.
The Company’s Board of Directors approve dividend payment
On 6 February 2025, the Company announced that pursuant to the authorization granted at the 2024 AGM, the Board of Directors had
approved a dividend payment of NOK 0.3125 per share. Payment of the dividend was made on 21 February 2025. This is considered a
non-adjusting event (see also parent company accounts).
Discovery in the Mistral prospect
On 5 March 2025, the Company announced a gas/condensate discovery on the Mistral prospect in the Norwegian Sea license PL1119
in which the Company’s wholly-owned subsidiary DNO Norge AS holds a 10 percent interest. Preliminary estimates of gross
recoverable resources encountered are in the range of 19-44 MMboe. In addition to DNO. License partners include Equinor Energy AS
(50 percent and operator), OKEA ASA and Pandion Energy AS (20 percent each).
Acquisition of Sval Energi Group AS
On 7 March 2025, the Company announced it had reached agreement to acquire 100 percent of the shares of Sval Energi Group AS
from HitecVision for a cash consideration of USD 450 million based on an enterprise value of USD 1.6 billion. The transaction includes
non-operated interests in 16 producing fields offshore Norway, with the largest assets being Nova, Martin Linge, Kvitebjørn, Eldfisk,
Maria, Symra and Ekofisk. The effective date of the transaction is 1 January 2025, with expected completion mid-year 2025, subject to
customary regulatory approvals from the Norwegian Ministry of Energy, the Norwegian Ministry of Finance and competition authorities.
The acquisition will be financed with existing cash and other debt financing facilities available to DNO.
New bond placement and redemption of DNO04
On 14 March 2025, the Company announced the completion of the placement of USD 600 million of new five-year senior unsecured
bonds with a coupon rate of 8.50 percent. The proceeds will be used to fully redeem DNO04, with the remainder to be used for general
corporate purposes.
Discovery in the Kjøttkake prospect
On 26 March 2025, the Company announced a discovery on the Kjøttkake prospect in the Northern North Sea license PL1182 S in
which the Company holds a 40 percent operated interest. Preliminary estimates of gross recoverable resources encountered are in the
range of 39 to 75 MMboe. License partners include Aker BP ASA (30 percent), Concedo AS and Japex Norge AS (15 percent each).
Dry well in the Horatio prospect
On 26 March 2025, a dry well was announced on the Horatio prospect in the Northern North Sea license PL1109 in which the Company
holds a 20 percent operated interest. The majority of the cost was incurred in 2025.
Annual Report and Accounts 2024
DNO
103
Parent company accounts
Income statement
104
Balance sheet
104
Cash flow statement
106
Note disclosures
Note 1
Accounting principles
107
Note 2
Operating revenues
108
Note 3
Salaries, pensions, remuneration, shares, options and severance
108
Note 4
Other operating expenses
110
Note 5
Net financial income/expenses
110
Note 6
Taxes
111
Note 7
Property, plant and equipment/Intangible assets
112
Note 8
Investment in shares/Other investments
112
Note 9
Other receivables
113
Note 10
Cash and cash equivalents
113
Note 11
Equity
113
Note 12
Guarantees, leasing liabilities and commitments
114
Note 13
Interest-bearing liabilities
114
Note 14
Current liabilities
114
Note 15
Financial instruments
114
Note 16
Related party disclosure
115
Note 17
Significant events after the reporting date
115
Note 18
Earnings per share
115
Note 19
Intercompany
116
Parent company accounts
104
DNO
Income statement
1 January - 31 December
USD thousand
Note
2024
2023
Operating revenues
2, 19
25,130
25,029
Total operating revenues
25,130
25,029
Depreciation
-1,680
-1,559
Payroll and other social expenses
-22,117
-22,130
Other operating expenses
-16,503
-19,761
Total operating expenses
-40,300
-43,450
Operating profit/loss
-15,170
-18,421
Net financial income/expense
29,293
105,122
Profit/loss before income tax
14,123
86,701
Tax income/expense
-
-
Net profit/loss
14,123
86,701
Earnings per share, basic (USD per share)
18
0.01
0.09
Earnings per share, diluted (USD per share)
18
0.01
0.09
Weighted average number of shares outstanding (millions)
975.00
980.04
Balance sheet
ASSETS
Years ended 31 December
USD thousand
Note
2024
2023
Fixed assets
Intangible assets
1,827
2,976
Property, plant and equipment
1,273
556
Total intangible and tangible assets
3,100
3,532
Financial assets
Shares in subsidiaries
560,194
523,283
Intercompany receivables
105,921
158,913
Total financial assets
666,115
682,196
Total non-current assets
669,215
685,728
Current assets
Intercompany receivables
10,451
6,586
Other receivables
6,819
6,476
Cash and cash equivalents
746,207
461,162
Total current assets
763,477
474,224
TOTAL ASSETS
1,432,692
1,159,952
Parent company accounts
Annual Report and Accounts 2024
DNO
105
EQUITY AND LIABILITIES
Years ended 31 December
USD thousand
Note
2024
2023
Paid-in capital
Share capital
32,858
32,858
Share premium
343,620
343,620
Total paid-in capital
11
376,478
376,478
Retained earnings
Retained earnings
119,690
211,202
Total retained earnings
11
119,690
211,202
Total equity
11
496,168
587,680
Non-current liabilities
Intercompany liabilities
138,733
-
Interest-bearing liabilities
741,374
393,181
Other non-current liabilities
2,455
3,403
Total non-current liabilities
882,562
396,584
Current liabilities
Trade payables and provisions for other liabilities and charges
20,001
15,293
Intercompany liabilities
7,101
6,144
Current interest-bearing liabilities
-
131,162
Dividend
26,860
23,089
Total current liabilities
53,962
175,688
Total liabilities
936,524
572,272
TOTAL EQUITY AND LIABILITIES
1,432,692
1,159,952
Oslo, 2 April 2025
Bijan Mossavar-Rahmani
Gunnar Hirsti
Elin Karfjell
Executive Chairman
Deputy Chairman
Director
Anne Marie Hjerkinn Aarnæs
Najmedin Meshkati
Christopher Spencer
Director
Director
Managing Director
Parent company accounts
106
DNO
Cash flow statement
1 January - 31 December
USD thousand
Note
2024
2023
Operating activities
Profit/loss before income tax
14,123
86,701
Adjustments to add (deduct) non-cash items:
Depreciation and impairment of tangible and intangible assets
1,680
1,559
Impairment/reversal of impairment (-) of financial assets
-34,303
33,116
Amortization of borrowing issue costs
5,13
3,834
2,942
Interest expense
55,898
44,597
Interest income
-39,456
-41,487
Other
192
184
Changes in working capital and provisions:
-4,208
222
4,708
-3,168
9
3,032
Cash generated from operations
2,477
127,698
Interest received
36,513
34,441
Interest paid
-49,603
-42,485
Dividend received
-
20,000
Net cash from/used in operating activities
-10,612
139,655
Investing activities
Purchases of intangible and tangible assets
-1,089
-890
Loans to subsidiaries
47,296
-100,184
Net cash from/used in investing activities
46,207
-101,074
Financing activities
Proceeds from borrowings net of issue costs
350,000
-
Repayment of borrowings
-131,162
-
Payment debt issue costs
13
-5,599
-
Loans from subsidiaries
19
138,733
-75,735
Purchase of treasury shares
-
-50,688
Paid dividend
-102,521
-92,002
Net cash from/used in financing activities
249,450
-218,425
Net increase/decrease in cash and cash equivalents
285,045
-179,844
Cash and cash equivalents at the beginning of the period
461,162
641,007
Cash and cash equivalents at end of the period
10
746,207
461,162
Of which restricted cash
1,918
2,187
Parent company accounts
Annual Report and Accounts 2024
DNO
107
Note 1
Accounting principles
◼
General
The financial statements of DNO ASA (the Company) are
presented in accordance with the Norwegian Accounting Act and
Norwegian accounting standards. The notes are an integral part
of the financial statements. For more information about the
accounting principles, see Note 1 in the consolidated accounts.
◼
Use of estimates
Preparation of the financial statements requires management to
make judgements, estimates and assumptions that affect the
application of policies and reported revenues and expenses,
assets and liabilities, and the disclosures. Actual results could
differ from those estimates.
◼
Currency
The financial statements are presented in USD, which is also the
functional currency that best reflects the economic substance of
the underlying events and circumstances relevant to the
Company. Monetary items denominated in foreign currencies are
converted using exchange rates on the balance sheet date.
Realized and unrealized currency gains and losses are included
in the profit or loss. Foreign currency transactions are recorded
using exchange rates on the date of transaction.
◼
Consolidated financial statements
The consolidated financial statements of the Group have been
prepared in accordance with IFRS as adopted by the EU and
additional disclosure requirements in the Norwegian Accounting
Act and have been presented separately from the parent
company accounts.
◼
Investments in subsidiaries
Investments in subsidiaries are recorded at historical cost. If the
fair value of the investment is lower than the carrying value, an
impairment charge is recorded and a new cost basis of the
investment is established. The impairment charge is reversed if
the basis for the impairment ceases to exist.
◼
Valuation and classification of balance sheet items
Current assets and short-term liabilities include items due less
than one year from drawdown and items related to the operating
cycle. Other assets or liabilities are classified as fixed assets or
long-term liabilities. Other financial investments including
investments in bonds are classified as non-current assets. They
are initially valued at cost price and subsequently may be
impaired to fair value.
◼
Fixed assets
Intangible assets and PP&E are stated at cost, less accumulated
amortization and accumulated impairment charges. Intangible
assets and PP&E are depreciated using a straight-line method
based on estimated useful life. Estimated useful life varies
between three and seven years. Impairment charge is recognized
when the book value exceeds the fair value of the asset.
◼
Income taxes
Tax income/expense consists of taxes receivable/payable and
changes in deferred tax. Tax receivables/payables are based on
amounts receivable from or payable to tax authorities. Deferred
tax liability is calculated on all taxable temporary differences,
unless there is a recognition exception. A deferred tax asset is
recognized only to the extent that it is probable that the future
taxable income will be available against which the asset can be
utilized.
◼
Share-based payments
Cash-settled share-based payments are recognized in the income
statement as expenses during the vesting period and as a liability.
The liability is measured at fair value and revaluated using the
Black & Scholes pricing model at each balance sheet date and at
the date of settlement, with any change in fair value recognized in
the profit or loss for the period.
◼
Pensions
The Company records pension schemes according to the
Norwegian accounting standard for pension costs. The Company
has contribution plans for employees as provided for under
Norwegian law. For such plans, only the contributions paid during
the period are expensed.
◼
Revenue recognition
Revenues from services are recorded when the service is
rendered.
◼
Allowance for doubtful balances
Trade receivables are recognized and carried at their anticipated
realizable value, which implies that a provision for a loss
allowance on expected credit losses of the receivable is
recognized.
◼
Contingent assets/liabilities
Provisions are made for contingent liabilities that are probable
and quantifiable, while contingent assets are not recognized.
◼
Cash flow statement
The cash flow statement is based on the indirect method. Cash
equivalents include bank deposits.
◼
Dividend
In accordance with Norwegian accounting standards, the
Company recognizes a liability for proposed ordinary dividend and
additional or extraordinary dividend resolved after yearend but
before or on the date of approval of the financial statements by
the Board of Directors. This differs from consolidated accounts
prepared under IFRS, where dividends are recognized as a
liability only after formal approval by the AGM or based on its
authorization.
Parent company accounts
108
DNO
Note 2
Operating revenues
1 January - 31 December
USD thousand
2024
2023
Operating revenues
25,130
25,029
Total operating revenues
25,130
25,029
Operating revenues relate to services provided by the Company to its subsidiaries.
Note 3
Salaries, pensions, remuneration, shares, options and severance
1 January - 31 December
USD thousand
2024
2023
Payroll and other social expenses
Salaries, bonuses and other salary expenses
-14,222
-15,798
Employer's payroll tax expense
-3,031
-3,688
Pensions
-1,936
-2,039
Other personnel costs
-2,928
-605
Total payroll and other social expenses
-22,117
-22,130
Average number of man-labor years
57
58
Pensions
DNO has a defined contribution scheme for its Norway-based employees that meets the Norwegian requirements for mandatory
occupational pensions
(“obligatorisk tjenestepensjon”).
Remuneration to the Board of Directors and senior management
Remuneration to the Board of Directors (USD thousand)
2024
2023
Bijan Mossavar-Rahmani, Executive Chairman, member of the nomination and remuneration committees
1,281.7
1,327.1
Gunnar Hirsti, Deputy Chairmen, chairs the audit committee and is a member of the remuneration committee
92.8
95.4
Elin Karfjell, Director, member of the audit committee
72.2
74.8
Anita Marie Hjerkinn Aarnæs, Director, member of the HSSE committee
72.2
74.8
Najmedin Meshkati, Director and member of the HSSE committee
72.2
40.5
Lars Arne Takla, former Deputy Chairman and member of the HSSE (until May 2022) and nomination (until May 2023) committees
-
1.6
Total
1,591.0
1,614.2
Total remuneration to the Board of Directors consists of regular fees (USD 1,540,340) and fees for participation in the board committees
(USD 49,959). Separately, a fee of USD 3,893 was paid to Kåre Tjønneland and a fee of USD 3,893 was paid to Ferris J. Hussein for
service on the nomination committee. The Company reimburses travel expenses and other relevant expenses incurred by the members
of the Board of Directors in connection with the performance of their duties.
Synthetic
Remuneration to Managing Director and senior management (USD thousand)
Salary
Bonus
Other
Total
Pension
Chris Spencer, Managing Director
648.9
122.5
49.3
81.4
902.1
19.6
Haakon Sandborg, Chief Financial Officer
438.5
49.0
37.3
40.9
565.7
19.6
Geir Arne Skau, Chief Human Resources and Corporate Services Officer
434.6
65.1
27.1
44.1
571.0
19.6
Erlend Wollan Einum, Chief Business Development Officer**
338.8
-
-
33.2
372.0
18.1
Linn Hoel, Chief Commercial Officer**
363.1
-
-
36.2
399.3
18.9
Sameh Hanna, General Manager Kurdistan region of Iraq
522.5
83.3
215.1
184.6
1,005.5
-
Elisabeth Femsteinevik, General Manager North Sea
304.0
46.5
-
39.6
390.1
19.6
Tonje Pareli Gormley, General Counsel - Middle East
434.7
81.4
29.1
45.3
590.5
19.6
Erling Moen Synnes, Chief Information Officer
269.8
54.7
-
23.4
348.0
19.6
Wieske Paulissen, Group Head of Exploration and Subsurface
269.9
54.7
-
23.8
348.4
19.6
Kjersti Kaurin, Corporate Counsel and Secretary
213.2
32.5
-
13.8
259.5
19.6
* Synthetic share awards that vested during the year .
** Linn Hoel and Erlend Wollan Einum joined DNO on 15 January and 1 February 2024, respectively.
Parent company accounts
Annual Report and Accounts 2024
DNO
109
Note 3
Salaries, pensions, remuneration, shares, options and severance
The following table is an overview of synthetic shares that have been awarded to the directors of the Board and members of the senior
management during the year. For an overview of total synthetic shares of employees at yearend 2024, see Note 5 in the consolidated
accounts.
Movement in synthetic Company shares during 2024
Opening
Closing
Weight.
balance
Movements (full-year)
balance
Unresrict.
average
Number of shares
at 1 Jan
Granted
Settled
at 31 Dec
at 31 Dec
price
Bijan Mossavar-Rahmani, Executive Chairman
347,156
402,824
-
749,980
-
-
Gunnar Hirsti, Deputy Chairmen
20,693
24,837
-
45,530
-
-
Elin Karfjell, Director
17,262
20,715
-
37,977
-
-
Anita Marie Hjerkinn Aarnæs, Director
17,262
20,715
-
37,977
-
-
Najmedin Meshkati, Director
20,693
21,083
-
41,776
-
-
Chris Spencer, Managing Director
1,558,831
308,129
29,336
1,837,624
373,056
9.57
Haakon Sandborg, Chief Financial Officer
876,996
134,635
239,946
771,685
-
11.39
Geir Arne Skau, Chief Human Resources and Corporate Services Officer
678,859
148,846
15,202
812,503
22,191
9.57
Sameh Hanna, General Manager Kurdistan Region of Iraq
263,999
132,055
-
396,054
-
-
Elisabeth Femsteinevik, General Manager DNO North Sea
193,832
265,359
-
459,191
-
-
Linn Hoel, Chief Commercial Officer
-
226,558
-
226,558
-
-
Erlend Wollan Einum, Chief Business Development Officer
-
271,759
-
271,759
-
-
Wieske Paulissen, Group Head of Exploration and Subsurface
213,646
56,108
-
269,754
-
-
Tonje Pareli Gormley, General Counsel - Middle East
675,195
168,391
32,684
810,902
-
9.57
Erling Moen Synnes, Chief Information Officer
213,646
56,167
-
269,813
-
-
Kjersti Kaurin, Corporate Counsel and Secretary
169,137
37,569
-
206,706
-
-
The weighted average settlement price for synthetic shares settled during 2024 was NOK 10.95. The weighted average remaining
contractual life of the synthetic shares was 2.5 years.
For more information regarding remuneration of senior management and the Board of Directors, please refer to the Company’s
remuneration guidelines that were approved at the 2023 AGM and a separate 2024 remuneration report, both reports published on the
Company’s website.
Auditor fees
1 January - 31 December
All figures are exclusive of VAT (USD thousand)
2024
2023
Auditor fees
-273
-284
Other financial audit services
-17
-17
Total auditing fees
-290
-301
Tax assistance
-65
-100
Other assistance
-
-
Total auditor fees
-355
-401
See Note 5 in the consolidated accounts for further information on administrative expenses.
Parent company accounts
110
DNO
Note 4
Other operating expenses
1 January - 31 December
USD thousand
2024
2023
Lease expense on buildings and equipment
-2,555
-2,831
Other office expenses
-69
19
IT expenses
-8,913
-9,187
Travel expenses
-1,541
-2,538
Legal expenses
-331
-880
Consultant fees
-2,002
-2,637
Other general and administrative costs
-1,092
-1,707
Total other operating expenses
-16,503
-19,761
Note 5
Net financial income/expenses
1 January - 31 December
USD thousand
2024
2023
Dividend and group contribution received from group companies
18,230
145,641
Interest income
28,812
25,742
Interest income from group companies
10,644
15,745
Other financial income
-
2,325
Total financial income
57,686
189,453
Interest expenses
-51,132
-42,490
Interest expenses group companies
-4,766
-2,107
Loss on foreign exchange
-2,741
-3,521
Reversal of impairment/impairment of financial assets
34,303
-33,116
Other financial expenses
-4,057
-3,097
Total financial expenses
-28,393
-84,331
Net financial income/expenses
29,293
105,122
In 2024, the reversal of impairment on financial assets was related to shares in DNO North Sea plc, while the impairment was related to
shares in DNO Yemen AS. In 2023, the impairment of financial assets was related to shares in DNO Yemen AS. Other financial
expenses in 2024 and 2023 were mainly related to amortization of bond issue costs.
Parent company accounts
Annual Report and Accounts 2024
DNO
111
Note 6
Taxes
Tax income/expense
1 January - 31 December
USD thousand
2024
2023
Change in deferred taxes
-
-
Income tax receivable/payable
-
-
Tax income/expense
-
-
Reconciliation of tax income/expense
1 January - 31 December
USD thousand
2024
2023
Profit/loss before income tax
14,123
86,701
Expected income tax according to nominal tax rate of 22 percent
-3,107
-19,074
Foreign exchange variations between functional and tax currency
-805
-929
Adjustment of deferred tax assets not recognized
-3,566
-4,357
Impairment financial assets
7,985
-7,016
Tax-free dividend from subsidiaries
-
21,915
Other items
-507
9,462
Tax income/expense
-
-
Effective income tax rate
0%
0%
Tax effects of temporary differences and losses carried forward
Years ended 31 December
USD thousand
2024
2023
Losses carried forward
67,741
78,528
Non-deductible interests carried forward
22,885
25,541
Other temporary differences
489
-270
Deferred tax assets/liabilities
91,115
103,799
Valuation allowance
-91,115
-103,799
Net deferred tax assets/liabilities
-
-
Recognized deferred tax assets
-
-
Recognized deferred tax liabilities
-
-
The corporate tax rate in Norway is 22 percent.
The carry forward period for unused losses in Norway is indefinite. Non-deductible interest expense can be carried forward for a period
of up to 10 years and will expire in the period 2026 to 2031. A deferred tax asset has not been recognized for these losses as there is
uncertainty regarding future taxable profits. The losses cannot be used towards petroleum activities on the NCS. The petroleum
activities carried out abroad by Norwegian subsidiaries are tax exempt in Norway and under the exemption method dividends from
subsidiaries are not taxable in Norway.
Parent company accounts
112
DNO
Note 7
Property, plant and equipment/Intangible assets
Intangible
USD thousand
assets
PP&E
Total
Costs as of 1 January 2024
15,626
4,132
19,758
Additions
-
1,089
1,089
Costs as of 31 December 2024
15,626
5,221
20,847
Accumulated depreciation as of 1 January 2024
-12,491
-3,576
-16,067
Depreciation
-1,308
-372
-1,680
Accumulated depreciation and impairments as of 31 December 2024
-13,799
-3,948
-17,747
Book value as of 31 December 2024
1,827
1,273
3,100
Book value as of 31 December 2023
2,976
556
3,532
Intangible assets and PP&E are depreciated using the linear method based on estimated useful life of three to seven years.
Note 8
Investment in shares
Ownership
Share
Book
Net profit/
Book value
interest
capital in
equity in
-loss in
of shares
Subsidiaries owned by the Company
Office
(percent)
1,000
USD 1,000
USD 1,000
USD 1,000
DNO Yemen AS*
Norway
100
-9,461
-2,287
-
DNO UK Limited
UK
100
-139
-8
-
DNO Iraq AS
Norway
100
816,265
-48,204
279,848
DNO Mena AS
Norway
100
2,800
1,068
1,904
DNO Technical Services AS
Norway
100
5,122
295
4,982
DNO North Sea plc
UK
100
GBP 37,289
194,517
54,333
194,485
Mondoil Enterprises LLC
United States
100
USD 1
102,639
4,763
78,976
Total
1,111,743
9,960
560,194
* Production start-up at the Block 47 in Yemen remains on hold due to force majeure.
The equity and profit/loss figures for the subsidiaries listed in the table above are presented as reported for consolidation purposes. For
subsidiaries that own other entities, the figures also include the equity and profit/loss of those subsidiaries. Statutory accounts for the
subsidiaries are finalized after the release of the parent company accounts.
Parent company accounts
Annual Report and Accounts 2024
DNO
113
Note 9
Other receivables
Years ended 31 December
USD thousand
2024
2023
Prepayments and accrued income
5,837
5,908
Other short-term receivables
982
568
Other receivables
6,819
6,476
Note 10
Cash and cash equivalents
Years ended 31 December
USD thousand
2024
2023
Cash and cash equivalents, restricted
1,918
2,187
Cash and cash equivalents, non-restricted
744,289
458,975
Total cash and cash equivalents
746,207
461,162
Restricted cash relates to employees' tax withholdings and deposits for rent.
Non-restricted cash is mainly related to bank deposits in USD as of 31 December 2024.
Included in the non-restricted cash and cash equivalents as of 31 December 2024 is USD 304.0 million held on fixed interest time
deposit contracts with different duration and maturity dates up to 14 February 2025.
Note 11
Equity
Share
Total
capital
Treasury
share
Share
Retained
Total equity
USD thousand
registered
shares
capital
premium
earnings
Shareholders' equity as of 1 January 2023
34,777
-869
33,908
343,620
263,270
640,798
Purchase of treasury shares
-
-1,050
-1,050
-
-49,546
-50,596
Dividend
-
-
-
-
-66,133
-66,133
Additional dividend
-
-
-
-
-23,089
-23,089
Profit/loss for the year
-
-
-
-
86,701
86,701
Cancellation of treasury shares
-1,919
1,919
-
-
-
-
Shareholders' equity as of 31 December 2023
32,858
-
32,858
343,620
211,202
587,680
-
Shareholders' equity as of 1 January 2024
32,858
-
32,858
343,620
211,202
587,680
Dividend
-
-
-
-
-78,775
-78,775
Additional dividend
-
-
-
-
-26,860
-26,860
Profit/loss
-
-
-
-
14,123
14,123
Shareholders' equity as of 31 December 2024
32,858
-
32,858
343,620
119,690
496,168
See Note 17 in the consolidated accounts for further information regarding the Company’s equity and shareholders.
During 2024, the Board of Directors based on AGM authorizations, approved four dividend distributions, respectively two with
NOK 0.25 and two with NOK 0.3125 per share, each. The dividends were paid in May, August and November 2024.
On 6 February 2025, the Company announced that pursuant to the authorization granted at the 2024 AGM, the Board of Directors
approved a dividend payment of NOK 0.3125 per share which was made on 21 February 2025.
The Company has made an accrual for this dividend in the parent company accounts at yearend 2024.
Parent company accounts
114
DNO
Note 12
Guarantees, leasing liabilities and commitments
See Note 24 in the consolidated accounts for information regarding other guarantees and commitments.
The Company’s future minimum lease payments under non-cancellable operating leases are related to office rent. The lease period
expires on 31 December 2031 and the yearly rent is USD 1.6 million.
Note 13
Interest-bearing liabilities
Effective
interest
Fair value
Carrying amount
Ticker
Facility
Facility
Interest
rate
USD thousand
OSE
currency
amount
(percent)
Maturity
(percent)
2024
2023
2024
2023
Non-current
Bond loan (ISIN NO0011088593)
DNO04
USD
350,000
7.875
09.09.26
8.8
352,405
378,140
350,000
400,000
Bond loan (ISIN NO0013243766)
DNO05
USD
400,000
9.250
04.06.29
10.0
410,020
-
400,000
-
Capitalized borrowing issue costs
-
-
-8,626
-6,819
Total non-current interest-bearing liabilities
762,425
378,140
741,374
393,181
Current
Bond loan (ISIN NO0010852643)
DNO03
USD
131,162
8.375
29.05.24
9.0
-
130,895
-
131,162
Total current interest-bearing liabilities
-
130,895
-
131,162
Total interest-bearing liabilities
762,425
509,035
741,374
524,343
See Note 18 in the consolidated accounts for further information on interest-bearing liabilities.
Note 14
Current liabilities
Years ended 31 December
USD thousand
2024
2023
Trade payables
1,856
1,986
Public duties payable
1,709
2,007
Accrued expenses and other current liabilities
16,436
11,300
Trade payables and provisions for other liabilities and charges
20,001
15,293
Accrued expenses and other current liabilities include accrued interest for bond loans of USD 4.3 million (USD 2.8 million in 2023) and
accruals for incurred costs of USD 12.2 million (USD 8.5 million in 2023).
Note 15
Financial instruments
See Note 23 in the consolidated accounts for information on financial instruments.
Parent company accounts
Annual Report and Accounts 2024
DNO
115
Note 16
Related party disclosure
Overhead expenses and IT-services in the parent company are allocated to the subsidiaries based on their proportional use of the
services provided by the parent company.
See Note 19 for intercompany transactions during the year and balances at yearend.
Note 17
Significant events after the reporting date
See Note 24 and Note 29 in the consolidated accounts for information on contingencies and events after the balance sheet date.
Note 18
Earnings per share
1 January - 31 December
USD thousand
2024
2023
Net profit/loss attributable to ordinary equity holders of the parent
14,123
86,701
Weighted average number of ordinary shares (excluding treasury shares) (millions)
975.00
980.04
Earnings per share, basic (USD per share)
0.01
0.09
Earnings per share, diluted (USD per share)
0.01
0.09
The Company did not have any potential dilutive shares at yearend 2024.
Parent company accounts
116
DNO
Note 19
Intercompany
Long-term intercompany receivables/liabilities
Years ended 31 December
Functional
Receivables
Liabilities
USD thousand
currency
2024
2023
2024
2023
DNO Iraq AS
USD
-
61,586
138,733
-
DNO Mena AS
USD
3,022
2,684
-
-
DNO Norge AS
NOK
19,617
10,823
-
-
DNO North Sea plc
USD
83,282
83,514
-
-
DNO Technical Services AS
USD
-
306
-
-
Total long-term intercompany receivables and liabilities
105,921
158,913
138,733
-
Except for loans to companies with exploration activities, the intercompany receivables and liabilities are interest bearing.
The intercompany interest rates used by DNO ASA and its subsidiaries are set at arm's length.
Short-term intercompany receivables/liabilities
Years ended 31 December
Functional
Receivables
Liabilities
USD thousand
currency
2024
2023
2024
2023
DNO Iraq AS
USD
5,649
3,665
-
-
DNO Mena AS
USD
123
98
-
-
DNO Norge AS
USD/NOK
2,436
437
-
-
DNO North Sea Plc
GBP
1,972
2,109
-
-
DNO North Sea (U.K.) Limited
GBP
44
19
-
-
DNO Technical Services AS
USD
217
-
-
896
West Limited
USD
-
-
7,067
-
South Limited
USD
-
222
-
5,248
Other
USD
10
37
34
-
Total short-term intercompany receivables and liabilities
10,451
6,586
7,101
6,144
Intercompany sales/purchases
1 January - 31 December
Functional
Sales
Purchases
USD thousand
currency
2024
2023
2024
2023
DNO Iraq AS
USD
17,760
9,140
-59
-
DNO Norge AS
USD
5,651
3,139
-1,904
-1,864
DNO North Sea plc
USD
171
276
-
-
DNO North Sea (U.K.) Limited
USD
122
29
-
-
DNO North Sea (ROGB) Limited
USD
-
12
-
-
West Limited
USD
38
5
-
-
South Limited
USD
20
27
-
-
DNO Technical Services AS
USD
944
12,120
-2,351
-2,936
DNO Yemen AS
USD
341
207
-
-
Other
USD
83
75
-
-
Total intercompany sales/purchases
25,130
25,029
-4,314
-4,800
The Company's other related parties consist of other subsidiaries in the Group.
Parent company accounts
Annual Report and Accounts 2024
DNO
117
Intercompany interest income/expense, dividend and group contribution
1 January - 31 December
Interest income, dividend
Interest expense
Functional
and group contribution
USD thousand
currency
2024
2023
2024
2023
DNO Technical Services AS
USD
154
306
-
-
DNO Iraq AS
USD
8,364
142,078
-4,206
-1,648
DNO North Sea Plc
USD
-
-
-
-459
DNO Mena AS
USD
351
193
-
-
DNO Norge AS
USD
12,078
10,255
-
-
DNO North Sea Plc
USD
7,927
8,554
-
-
West Limited
USD
-
-
-163
-
South Limited
USD
-
-
-397
-
Total intercompany interest income/expense
28,874
161,386
-4,766
-2,107
See Note 5 for more details on financial items.
Country-by-Country report
118
DNO
Country-by-Country report 2024
In line with the Norwegian Accounting Act and Norwegian Securities Trading Act, the Company has prepared a country-by-country
report for its activities in the extractive industries, including information on investments, revenue, production, cost and the number of
employees in each country of operation by subsidiary. Among other requirements, total payments to governmental bodies during the
financial year must be broken down by country and by payment type.
Additional information regarding the Group's performance in each geographic area can be found in Note 2 Segment information. A
complete list of the Group's oil and gas license portfolio is disclosed in Note 28.
(USD million)
License, legal entity level and
country/region of operation
1
Country of
incorpor-
ation
2
Royalty
3
Net
produc-
tion
4
Corporate
income
tax
5
Special
tax
6
Area
fee
7
Contractual
bonuses
8
Invest-
ments
9
Revenue
10
Expend-
iture
11
Net inter-
comp-
any
interest
12
Profit/los
s before
tax
10
Tax
income/e
xpense
13
Equity
10
Employees
14
Tawke
-99.6
58,961
-
-471.4
-0.0
-1.0
-
-
-
-
-
-
-
Baeshiqa
-0.0
3
-
-0.0
-0.0
-0.6
-
-
-
-
-
-
-
DNO Iraq AS
Norway
-
-
-
-
-
-
45.4
230.8
-201.6
-
-48.2
-
816.3
Total Kurdistan region of Iraq
-99.6
58,965
-
-471.5
-0.1
-1.6
45.4
230.8
-201.6
-
-48.2
-
816.3
796
DNO Norge AS
Norway
-
13,057
-0.8
-
-1.9
-0.2
263.0
387.3
-275.0
2.2
108.6
-72.9
229.9
Total Norway (NCS)
-
13,057
-0.8
-
-1.9
-0.2
263.0
387.3
-275.0
2.2
108.6
-72.9
229.9
143
DNO North Sea (U.K.) Limited
UK
-
505
-
-
-0.0
-
4.0
13.5
-5.0
-
3.8
-
-237.7
DNO North Sea (ROGB) Limited
UK
-
49
-
-
-
-
-1.4
1.2
-1.3
-
1.3
-
-82.5
DNO Exploration UK Limited
UK
-
1,591
-
-
-
-
1.8
34.0
-16.5
-3.3
-28.3
51.9
21.9
Total United Kingdom (UKCS)
-
2,144
-
-
-0.0
-
4.4
48.7
-22.8
-3.3
-23.2
51.9
-298.4
-
DNO Yemen AS
Norway
-
-
-
-
-
-
-
-
-2.3
-
-2.3
-
-9.5
Total Yemen
-
-
-
-
-
-
-
-
-2.3
-
-2.3
-
-9.5
2
DNO Mena AS
Norway
-
-
-
-
-
-
-
-
-0
-
-0.0
-
1.7
-
DNO ASA
Norway
-
-
-
-
-
-
0.8
25.1
-39.5
7.4
15.1
-
523.5
55
DNO Technical Services AS
Norway
-
-
-
-
-
-
0.1
22.0
-21.9
-
0.3
-
5.1
71
DNO North Sea plc
UK
-
-
-
-
-
-
-
-
-0.3
-7.9
-21.1
-
333.7
3
DNO UK Limited
UK
-
-
-
-
-
-
-
-
-0.0
-
-0.0
-
-0.1
Mondoil Enterprises LLC
US
-
3,103
-
-
-
-
-
-
-0.0
-
4.8
-
88.9
Other *
-
-
-
-
-
-
-
-
-0.1
0.6
3.6
-
5.9
-
Total Other
-
3,103
-
-
-
-
0.8
47.2
-61.8
0.1
2.7
-
958.6
129
Eliminations/ Intercompany
-
-
-
-
-
-
-
-47.2
42.6
1.0
-50.9
7.2
-616.9
GRAND TOTAL
-99.6
77,269
-0.8
-471.5
-2.0
-1.8
313.6
666.8
-520.9
-
-13.3
-13.8
1,080.0
1,070
* Other includes subsidiaries of DNO ASA that did not hold oil and gas licenses during the year and equity accounted investments.
1
2
3
4
5
6
7
8
9
10
include intercompany transactions. Audit of statutory financial statements has not been completed at the time of issuing this report
11
expenses, other operating expenses and exploration costs expensed including intercompany transactions
12
13
14
Auditor’s report
Annual Report and Accounts 2024
DNO
119
Auditor’s report 2024
Auditor’s report
120
DNO
Auditor’s report 2024
Auditor’s report
Annual Report and Accounts 2024
DNO
121
Auditor’s report 2024
Auditor’s report
122
DNO
Auditor’s report 2024
Auditor’s report
Annual Report and Accounts 2024
DNO
123
Auditor’s report 2024
Auditor’s report
124
DNO
Auditor’s report 2024
Auditor’s report
Annual Report and Accounts 2024
DNO
125
Auditor’s report 2024
Auditor’s report
126
DNO
Sustainability auditor’s limited assurance report 2024
Auditor’s report
Annual Report and Accounts 2024
DNO
127
Sustainability auditor’s limited assurance report 2024
Auditor’s report
128
DNO
Sustainability auditor’s limited assurance report 2024
Auditor’s report
Annual Report and Accounts 2024
DNO
129
Sustainability auditor’s limited assurance report 2024
Alternative performance measures
Alternative performance measures
130
DNO
DNO discloses alternative performance measures (APMs) as a supplement to the Group’s financial statements prepared based on
issued guidelines from the European Securities and Markets Authority (ESMA). DNO believes that the APMs provide useful
supplemental information to management, investors, securities analysts and other stakeholders and are meant to provide an enhanced
insight into the financial development of DNO’s business operations, financing and future prospects and to improve comparability
between periods. Reconciliations of relevant APMs, definitions and explanations of the APMs are provided below.
EBITDA
USD million
2024
2023
Revenues
666.8
667.5
Lifting costs
-175.5
-191.7
Tariffs and transportation
-49.4
-32.4
Movement in overlift/underlift
2.1
5.6
Share of profit/loss from Joint Venture
3.3
11.9
Exploration expenses
-88.9
-47.7
Administrative expenses
-23.5
-23.3
Other operating income/expenses
-1.6
-6.2
EBITDA
333.3
383.8
EBITDAX
USD million
2024
2023
EBITDA
333.3
383.8
Exploration expenses
88.9
47.7
EBITDAX
422.2
431.5
Lifting costs
2024
2023
Lifting costs (USD million)
-175.5
-191.7
Net production (MMboe)*
27.1
17.9
Lifting costs (USD/boe)
6.5
10.7
* For accounting purposes, the net production from equity accounted investments is not included.
Capital expenditures
USD million
2024
2023
Purchases of intangible assets
-87.2
-114.6
Purchases of tangible assets
-199.8
-163.6
Capital expenditures*
-287.0
-278.3
* Exclude estimate changes on asset retirement obligations.
Operational spend
USD million
2024
2023
Lifting costs
-175.5
-191.7
Tariff and transportation expenses
-49.4
-32.4
Exploration expenses
-88.9
-47.7
Exploration cost previously capitalized carried to cost (Note 6 in the consolidated accounts)
37.7
6.0
Capital expenditures
-287.0
-278.3
Payments for decommissioning
-4.9
-17.9
Operational spend
-568.0
-561.9
Alternative performance measures
Alternative performance measures
Annual Report and Accounts 2024
DNO
131
Equity
USD million
2024
2023
Total equity
1,080.0
1,234.8
Total assets
2,966.1
2,638.3
Equity ratio
36.4%
46.8%
Free cash flow
USD million
2024
2023
Net cash from/used in operating activities*
413.0
194.1
Capital expenditures
-287.0
-278.3
Payments from license transactions
-84.8
-5.1
Payments for decommissioning
-4.9
-17.9
Equity contribution into Joint Venture (Note 13)
-9.4
-6.9
Dividends from Joint Venture (Note 13)
31.8
27.1
Free cash flow
58.8
-86.8
Net debt
USD million
2024
2023
Cash and cash equivalents
899.0
718.8
Bond loans and reserve based lending
800.0
566.2
Net cash/debt (-)
99.0
152.7
Reserve Life Index (R/P)*
2024
2023
Net production (MMboe)
28.3
19.1
1P reserves
178.9
206.4
2P reserves
281.9
290.1
3P reserves
340.1
360.5
1P Reserve Life Index (R/P in years)
6.3
10.8
2P Reserve Life Index (R/P in years)
10.0
15.2
3P Reserve Life Index (R/P in years)
12.0
18.8
* Net production and net reserves includes West Africa segment (equity accounted investment).
Definitions and explanations of APMs
ESMA issued guidelines on APMs that came into effect on 3 July 2016. The Company has defined and explained the purpose of the
following APMs:
EBITDA (Earnings before interest, tax, depreciation and amortization)
EBITDA, as reconciled above, can be found by excluding the DD&A and impairment of oil and gas assets from the profit/loss from
operating activities. Management believes that this measure provides useful information regarding the Group’s ability to fund its capital
investments and provides a helpful measure for comparing its operating performance with those of other companies.
EBITDAX (Earnings before interest, tax, depreciation, amortization and exploration expenses)
EBITDAX, as reconciled above, can be found by excluding the exploration expenses from the EBITDA. Management believes that this
measure provides useful information regarding the Group’s profitability and ability to fund its exploration activities and provides a helpful
measure for comparing its performance with those of other companies
Alternative performance measures
Alternative performance measures
132
DNO
Lifting costs (USD/boe)
Lifting costs comprise of expenses related to the production of oil and gas, including operation and maintenance of installations, well
intervention activities and insurances. DNO’s lifting costs per boe are calculated by dividing DNO’s share of lifting costs across
producing assets by net production for the relevant period. Management believes that the lifting cost per boe is a useful measure
because it provides an indication of the Group’s level of operational cost effectiveness between time periods and with those of other
companies.
Capital expenditures
Capital expenditures comprise the purchase of intangible and tangible assets irrespective of whether paid in the period. Management
believes that this measure is useful because it provides an overview of capital investments used in the relevant period.
Operational spend
Operational spend is comprised of lifting costs, tariff and transportation expenses, exploration expenses, capital expenditures and
payments for decommissioning. Management believes that this measure is useful because it provides a complete overview of the
Group’s total operational costs, capital investments and payments for decommissioning used in the relevant period.
Equity
Management uses total equity and equity ratio to monitor capital and financial covenants. The equity ratio is calculated by dividing total
equity by the total assets.
Free cash flow
Free cash flow comprises net cash from/used in operating activities less capital expenditures, payments for decommissioning and net
cash received/paid from equity accounted investments. Management believes that this measure is useful because it provides an
indication of the profitability of the Group’s operating activities excluding the non-cash items of the income statement and includes
operational spend. This measure also provides a helpful measure for comparing with that of other companies.
Net debt
Net debt comprises cash and cash equivalents less bond loans. Management believes that net debt is a useful measure because it
provides indication of the minimum necessary debt financing (if the figure is negative) to which the Group is subject at the balance sheet
date.
Reserve Life Index
The Reserve Life Index measures the length of time it will take to deplete a resource at given production rates. The ratio is used to
measure how long an oil and gas field will last, or more precisely how long the Group’s oil and gas reserves will last, and is calculated
by dividing the quantity of reserves by the production of petroleum from those reserves during the relevant period.
Glossary and definitions
Glossary and definitions
Annual Report and Accounts 2024
DNO
133
AED
United Arab Emirates dirham
AGM
Annual General Meeting
APIKUR
Association of the Petroleum Industry of
Kurdistan
ASRR
Annual Statement of Reserves and
Resources
bbls
Barrels of oil
bcf
billion cubic feet
Board of Directors
The Board of Directors of the Company
boe
Barrels of oil equivalent
bopd or boepd
Barrels of oil per day or barrels of oil
equivalent per day
CAPM
Capital Asset Pricing Model
Company
DNO ASA
Contingent resources
Quantities of petroleum estimated, as of a
given date, to be potentially recoverable
from known accumulations but not currently
considered to be commercially recoverable
or where a field development plan has not
yet been submitted
Contractor
A company or companies operating in a
country under a PSC on behalf of the host
government for which it receives either a
share of production or a fee
Cost oil
Share of oil produced which is applied to
the recovery of costs under a Production
Sharing Contract
Crude oil, crude or oil
A mixture that consists mainly of pentanes
and heavier hydrocarbons, which may
contain sulphur and other non-hydrocarbon
compounds, that is recoverable at a well
from an underground reservoir and that is
liquid at the conditions under which its
volume is measured or estimated
DKK
Danish kroner
D&M
DeGolyer and MacNaughton
DD&A
Depreciation, depletion and amortization
DMA
Double materiality assessment
DNO
DNO ASA and its consolidated
subsidiaries
Group
The Company and its consolidated
subsidiaries
E&P
Exploration and production
EBITDA
Earnings before interest, tax, depreciation
and amortization
EBITDAX
Earnings before interest, tax, depreciation,
amortization and exploration expenses
ESMA
European Securities and Markets
Authority
ESRS
European Sustainability Reporting
Standards
EU
The European Union
EUR
Euros
Farm-in
To acquire an interest in a license from
another party
Farm-out
To assign an interest in a license to
another party
Gas
A mixture of light hydrocarbons that exist
either in the gaseous phase or in solution
in crude oil in reservoirs but are gaseous
at atmospheric conditions
GBP
Pound sterling
HSSE
Health, safety, security and environment
Hydrocarbons
Compounds containing only the elements
of hydrogen and carbon, which may exist
as solid, liquid or gas
IAS/IFRS
International Financial Reporting
Standards
IQD
Iraqi dinar
IRO
Impact, risk and opportunity
KRG
Kurdistan Regional Government
Kurdistan
Kurdistan region of Iraq
License or permit
Area of specified size licensed to a
company by the government for
production of oil or gas
MMbbls
Million barrels of oil
MMboe
Million barrels of oil equivalent
NCS
Norwegian Continental Shelf
Net entitlement
The portion of future production (and
thus resources) legally accruing to a
contractor under the terms of the
development and production contract
Net entitlement reserves
Reserves based on net entitlement
production
Net production
Production based on the participation
interest in the license
Net reserves and resources
Reserves and resources based on the
participation interest in the license
NOK
Norwegian kroner
Norwegian Public Limited Liability
Companies Act
The Norwegian Public Limited Liability
Companies Act of 13 June 1997 no. 45
(“allmennaksjeloven”)
Operator
A company responsible for managing an
exploration, development, or production
operation
Oslo Stock Exchange
Oslo Børs ASA
Petroleum
A complex mixture of naturally occurring
hydrocarbon compounds found in rocks.
Glossary and definitions
Glossary and definitions
134
DNO
PP&E
Property, plant and equipment
Profit oil
Production remaining after royalty and
cost oil, which is split between the
government and the contractors under a
Production Sharing Contract
PSC
A Production Sharing Contract or PSC is an
agreement between a contractor and a host
government, whereby the contractor bears
all risk and cost for exploration,
development and production in return for a
stipulated share of production
Royalty
Royalty refers to payments that are due to
the host government or mineral owner in
return for depletion of the reservoirs and the
producer contractor for having access to
the petroleum resources
RPS
RPS Energy Consultants
SPE
Society of Petroleum Engineers
UAE
The United Arab Emirates
UK
The United Kingdom
UKCS
The United Kingdom Continental Shelf
USD
United States dollar
WACC
Weighted Average Cost of Capital
Glossary and definitions
Glossary and definitions
Annual Report and Accounts 2024
DNO
135
DNO ASA
DOKKVEIEN 1 / AKER BRYGGE / 0250 OSLO / NORWAY / PHONE + 47 23 23 84 80 / FAX +47 23 23 84 81/ www.dno.no