REJECT THE DNO-RAK MERGER OR RISK TAKING ON LIABILITIES THAT COULD EXCEED SEVERAL HUNDRED MILLION DOLLARS

REJECT THE DNO-RAK MERGER OR RISK TAKING ON LIABILITIES THAT COULD
EXCEED SEVERAL HUNDRED MILLION DOLLARS

The RAK licenses to be merged with DNO contain decommissioning
liabilities from nine platforms and a failed redevelopment of the Saleh
field. The liabilities are in excess of the value of RAK's assets and
could run into hundreds of millions of dollars

Do not accept RAKS liabilities and Reject the merger at the EGM

In the "Prospectus Equivalent" published by DNO, pages 24 to 29 outline
several "risk factors" relating to the Combined Group of DNO/RAK.
Specifically section 2.25 states that "The Combined Group cannot
accurately predict its future decommissioning liabilities".

DNO has NO future decommissioning liabilities as all fields are onshore.
ALL decommissioning liabilities are therefore related to RAK`s offshore
platforms, flowlines, wells and sea bottom debris and other
environmental risks. No disclosure of these costs is made in the
"Prospectus Equivalent".

In addition, the failure of the Saleh 5 well and further wells to
recover any oil or gas from the extremely difficult reservoirs adds
drilling costs of at least USD 100 million to the "Combined Group".

With unpredictable and unquantifiable decommissioning costs, DNO
experience has shown that future financing may not be possible. In
particular, the present bond loan may also be at risk if the increased
liabilities are absorbed into the DNO`s accounts.

What can the DNO shareholders do?

The Oslo Stock Exchange confirmed that their inspection and review
before publication on behalf of the Financial Supervisory Authority of
Norway (the "NFSA") pursuant to Section 7-5 no 5. of the Norwegian
Security Trading Act DID NOT involve reviewing facts or information in
general, in particular it did not examine RAK's decommissioning
liabilities or cash flows.

The "Prospectus Equivalent" information on the RAK Saleh Field does not
contain any information on decommissioning liabilities, only specifying
serious reservoir concerns and NO P90 proven reserves. The probability
of total failure of the Saleh project is in Petrolia`s opinion the most
likely outcome which in turn could reduce the value of RAK's portfolio
by up to USD 300 million and could result in a significant negative cash
flow.

The Saleh 5 well which commenced on the 3rd of July 2011 was due to be
finished by the end of September. Why have DNO and RAK refused to
comment on this important well which has major implications on the value
of the proposed deal?

DNO must respond to the following questions

DNO shareholders should realise that according to the "Prospectus
Equivalent" all the risks and benefits from the RAK licenses are for the
account of DNO shareholders from the Effective Date of the 1st of July
2011. Accordingly, DNO is obliged to respond to the following issues
immediately and before the EGM 1. November:

1. What is the status of the Saleh 5 well, budgeted costs and projected
costs and the projected probability of success?

1. What is the predicted cost of;

a)    Plug and Abandonment of each offshore wells (about 9-10 wells in
RAK B, Saleh and Bukha fields)

b)    Decommissioning costs of each offshore platform

c)    Removal of platform, flowline and all other HSE liabilities.

Petrolia Invest AS as a large shareholder and as a professional oil
company has reviewed the possible costs and liabilities and the
probability of Saleh/RAK field success. It predicts that the
decommissioning cost is approximately USD 50 to 150 million per
platform. Petrolia Invest believe that there is only a 10 per cent
chance of success for the Saleh Reservoir redevelopment.

DNO without interference from the RAK Board Members are required to
provide facts sufficient for the DNO shareholders to evaluate for
themselves.

What are the Cash flows for the Saleh Field in the Event of Failure?

Third party analyses have been completed and in the "Prospectus
Equivalent" the following reference is made to the Saleh Field on page
401

"The most difficult part of the valuation has been related to the
redevelopment of the Saleh field offshore Ras Al Khaima.

The parties considered both success and failure cash flow cases.

Since neither cash flow cases have been made public, DNO must present
such cash flow statements clearly pointing out decommission costs and
failure scenario.

For example, the Saleh field history and decommissioning liabilities
shown on page 80 shows that the RAK Emirate absorbed the decommissioning
liabilities when Chevron in 1987 relinquished the Saleh acreage,
subsequently passing them over to RAK Petroleum in the first half of
2011 while DNO and RAK were involved in merger negotiations.

The closely related parties could be passing the unpredictable and
unquantifiable decommissioning liabilities to the DNO shareholders. DNO
must confirm this understanding.

What are the abandonment liabilities that DNO shareholders will inherit?

In the DNO Competent Person Report by D & M on pages 25 and 26 it states
that:

"Current operating expenses and operating forecast provided by RAK were
used in estimating future expenses to operate the field.

Future capital expenditures and abandonment costs were estimated using
current forecast provided by RAK.."

"RAK has represented that host government (RAK) will assure
responsibility for abandonment upon expiration of the production
licenses, so no abandonment costs are included herein."

DNO`s Board of Directors and the Management must confirm to the DNO
shareholders their agreement to the RAK representations and specify the
warranties that RAK provided to DNO, by the date of the EGM on the 1st
of November 2011.

DNO must also provide production curves for the RAK B and Saleh fields
to shareholders as well as future cash flows. The DNO presentation dated
5th of. September 2011 shows 7,000 boe per day from mid-2012 from these
fields, whereas in the DNO presentation dated 14th October 2011 it shows
zero production in 2012.

DNO must provide representation from the RAK government guaranteeing
under which circumstances the abandonment liabilities will be absorbed
by the RAK Government and which liabilities it will cover.

D&M's Competent Person Report (CPR) cannot base its valuation on
non-disclosed representations by RAK. DNO shareholders require DNO`s
representations on the unpredictable, large abandonment liabilities as
soon as possible, and before the EGM.

What is the progress and ongoing cost of the Saleh-5 well to DNO
shareholders?

On page 162 in the report from the Board of Directors of DNO Mena AS on
the merger dated 3. September 2011 it states that;

"The most difficult part of the valuation have been related to the
redevelopment of the Saleh field offshore Ras Al Khaima.

The first step in the redevelopment program is to deepen the existing
Saleh 5 well which is currently underway and the result of which is
uncertain. Some difficulties have been encountered in the re-drilling
which has impacted both anticipated costs and cash flows. Given the
uncertainty of the success or failure of the Saleh re-development
program, the value range attached to the Saleh field is difficult to
predict."

As of the 20th October 2011 the probable failure should be already be
known by DNO/RAK managements. DNO have failed to report to the market
any status of the Saleh 5 well, the anticipated cashflow and costs and
the negative impact of a failed well. Unconfirmed reports suggest that
the well was plugged and side-track drilling may have commenced. DNO
must confirm the daily cash burn-rate for the jack-up operations.
Petrolia anticipates negative cash flow is USD 300,000 to 500.000 per
day which is for the account of DNO shareholders from the 1st of July
2011 provided a completed merger.

REJECT THE MERGER OR RISK TAKING ON LIABILITIES THAT COULD EXCEED
SEVERAL HUNDRED MILLION DOLLARS.