DNO ASA Stock

Good morning, and welcome to DNO's Third Quarter 2026 Earnings Call. My name is Jostein Lovas, and I'm the Communications Manager here at DNO. With me today are Executive Chairman, Bijan Mossavar-Rahmani; Managing Director, Chris Spencer; and CFO, Birgitte Wendelbo Johansen.

It's a wonderful day here in Oslo. Not only are we delivering strong results, but it's also Birgitte's 50th birthday. Who would have thought? So with that, Bijan will start us off with some short introductory remarks, after which Chris and Birgitte will take you through the presentation. We'll then open for questions afterwards.

With that, let me hand over to Bijan.

Jostein, thank you, and good morning to everyone. I'm pleased to join you for our third quarter results presentation. 50 is not only Birgitte's birthday, but it's also our share price target. So we are ambitious and optimistic about the opportunities ahead for DNO.

We've had a very strong quarter, and my colleagues will describe both the operational and financial contributions to that. But we've had a number of strong quarters in the past several years, and we're very proud about the success of the company and our growth and importantly, how we have continued to build and optimize our portfolio, and we have a lot of very exciting projects ahead, which we will touch on.

So welcome to this meeting. And I will now turn to Chris, to give our operational updates.

Thank you very much, Bijan, and good morning to everyone from beautiful Oslo. Could we move to the first slide, please?

Very positive quarter again for DNO. On the operational side, the big number, of course, is the return of our Kurdistan business unit to strong production. But there is, of course, the North Sea with these high oil and gas prices that is still stealing the show and is the driver behind the record revenues again from the quarter with us, topping $1 billion in 1 quarter. That leads, of course, to some very attractive financial figures for the quarter, which Birgitte will go into in further detail later in the presentation.

As those who follow the company have noticed, we've had a very high level of business development activity in the quarter. We are very active on the business development side. I guess the difference in this past quarter is a lot of that has played out in terms of -- in public since we were made offers for listed companies. And as you are aware, we have been keeping our discipline and keeping to our strategy with those approaches.

Similarly, on the portfolio optimization side, we divested our Cote d'Ivoire business, and that has been a very nice piece of business for DNO since we entered the country in -- almost exactly 4 years ago.

On the North Sea side, the production was similar to previous quarter. We're now pretty much through the, what they call, summer maintenance season and guiding 86,000 barrels of oil equivalent for the full year. And that's a bit higher than we expected at the beginning of the year. So we're very pleased with that.

All in all, as I said, a very strong quarter and easy decision for the Board of Directors, I think, to maintain the dividend. This being the sixth quarter that we've had the dividend at that level.

If we move on to the next, really reflecting that the Sava acquisition we made last year is really delivering, and that is what you see on that first slide. So -- and you'll see in the rest of my slides. So we have, as we promised, delivered on the operational and financial synergies in the North Sea on the back of that acquisition, which has resulted in very strong asset performance, acceleration of developments and reduced cost of capital. It has, of course, also importantly, put our company in a position to benefit from this year's high oil and gas prices.

All of this leaves us better placed for further growth than I think we have ever been in my 9 years with the company. And because of that, we thought it would be helpful to spend a few minutes on this slide to explain to the market the way we think about further growth for DNO and to reassure everyone that, in doing so, we're not getting carried away with commodity prices. We are very focused, as always, on delivering shareholder value. So it's a simple strategy, I think, for further growth.

North Sea remains, as we've been saying, we've got our target for 100,000 barrels of oil equivalent by 2030. And as always, we're pushing ourselves to achieve it at least in that time. We have a very wide portfolio and a very good team that is working to optimize that portfolio together with the operators and obviously, where we operate directly with the assets. And there's a huge opportunity set as the figures there represent. So we are working very hard to deliver the organic growth. There's also been a lot of bolt-on M&A, which I'll come back to in the final point, which is a key part of our North Sea work.

Kurdistan, we have rather than a large number of smaller assets from a DNO interest perspective. We have the two huge fields of Tawke and Peshkabir. Tremendous resource potential remaining there. And we're very happy to be back to drilling and looking at potentially taking on a third rig this year. And so we are very focused on monetizing those remaining reserves and in particular, sort of converting the juicy resources we have in the Tawke PSC into reserves.

The big upside, I think, in Kurdistan remains the access to international prices combined with the surety of payments or certainty of payments, as we've written here. And that remains a key focus for us in the -- in management of DNO in the months ahead.

Then the third piece of this strategy is using our new business development activities. And I touched on the portfolio optimization part. That's been a regular feature of our North Sea business and it's provided backdrop to some of the good news we put out today as well. But we're also looking, as was evidenced by the bid for Capricorn, for new positions as we seek to build the company and grow to the future.

We are going to be disciplined. We have been disciplined and we'll continue to be disciplined when we're looking for these third legs. We are very challenging to ourselves in terms of where to go. The grass is always greener on the other side of the road, as we say in English, and that's something to be very careful about. So we look to our competitive advantages, whether that's technology, relationships, proximity to existing operations, government relations. And that is the areas that we seek to target. And then as we move forward, we always, the old adage that you look at 10 opportunities to get 1, I guess that in this competitive oil and gas space is the sort of minimum ratio. So we do a lot of investigations and maintain that discipline importantly, which, as I touched on the last slide, has been evident to the market with the discipline we've exercised in our business development work over the past few months. So I hope that is helpful to everybody as far as the company.

Moving from strategy, we now move to the news of the day. Alongside our results this morning, we put out announcement of two pieces of news. First of all, our Kjottkake project. Fantastic project to be now involved in the -- leading in many respects. We were operator of Kjottkake -- of course, drilled the exploration well in 2025, and sidetracked it immediately to appraise, which laid the groundwork for this great partnership we've developed with Aker BP, where they have taken on the operatorship during the development phase, benefiting from the relationships and order book they had with their suppliers and their standardization drive.

We are on-track for a record fast development in the Norwegian Continental Shelf. Very exciting for us, and it's passed a very significant milestone just this week with all three of the partners confirming that they're sanctioning the project, so-called Decision Gate 3 in the old project terminology. Of course, this has also been an area where we've been optimizing our position through M&A, which is touched on this slide. And we are now pleased to be able to have a small interest in the key hub in the area, the Gjoa field, because we have numerous tiebacks that we're involved in that we will be producing through Gjoa in the years ahead.

If we move to the next slide, please. The second piece of news is very gratifying results from the Afrodite appraisal well, very positive. That's a discovery that's been on the shelf. I've been wondering what to do about that for some time, decided that appraisal was needed before commercialization. And we entered it through a swap transaction with Equinor earlier in the year. And so very, very pleased that the appraisal there has been successful.

I think it said in the news that we -- yes, we more than doubled the resource estimate. And now, Kvitebjorn, which was -- which is a hub where we have an interest through the swap transaction and was maturing. I mean, this whole area is going to be revitalized now in the next few years.

Atlantis is moving rapidly to sanction. And with Afrodite and Carmen there, if we -- with the stimulation and fracking technologies around, we are optimistic that this will be a very interesting area in the years to come. Thank you.

Next slide, please. Of course, the news today is just the latest on the conveyor belt that we are developing in the North Sea. And this is a busy slide. I'm not proposing to go through every bullet point, but we are -- we've been seeking over the past few quarters to communicate how we will be building our business and achieving our 100,000 barrels a day target.

Notably, 6 months ago, my colleague, Morten Grini, from the North Sea business joined us to do a bit more of a deep dive through a few of these projects, including, of course, Kjottkake. This time, we're just trying to give you a bit better portfolio view of how we've already delivered. So we've delivered since last -- beginning of last year, 5 projects into production. Those are now producing about 18,000 barrels a day.

In the middle then, we have now 6 projects under development following the final investment decision on Kjottkake. Those total around 40 million of resources that we expect to be booking as reserves at the end of the year. And the next line of projects are coming through to deliver another 40 million. And those are the ones that are coming up to project sanction in the near future. So a very busy time for us, but this is not -- when I say busy time, this is the normal. We will be pushing through this type of project activity every year as we move forward. And so it's a very fun business to work in.

I'll leave you to study the individual projects in more detail. As I said in the last quarters, we've also provided more information on many of them. But I just want to add that the reserves and resources increases that we have on this slide are the -- are not the whole picture in terms of our reserves replacement. We also have positions in important hub assets such as Martin Linge, Ekofisk, and these assets are also -- we're also working hard with the operators to generate additional reserves and resources in those assets. And that's how we plan to grow and replace reserves as we go along.

If we go to the next slide, then we are well-known as an exploration company in the North Sea these days, I think, punching above our weight with respect to the number of wells we drill, but also importantly, the commercial success rate. And of course, that is then the next step in this story that we are really -- we continue to fill the project funnel through organic efforts, through the drill bit, primarily complemented by selective asset transactions.

So, so far this year, we've had what we're classifying as three appraisal. There's always -- in my world, there's more sort of appraisal of discoveries and appraisal that's more outreach. I've talked about Afrodite at length already. I would like to highlight the Symra, where this is another great piece of business in the North Sea where development well -- we took the opportunity when drilling a development well to have a small pilot into a nearby structure, which we expected to contain resources or hoped such that we call it appraisal. But that's a smaller volume, but very high-value barrels because it's so easy to produce through the existing infrastructure there.

Then we -- and then the other point just to note here is a bit of a detail, but I'm very much looking forward to the Norma appraisal. Unfortunately, it's been -- the drilling sequence is such that, that's been pushed from late 2026 into early '27. And so, you'll see a phasing impact on our exploration expenditure in '26 and '27 as a result of that. But that's one of our operated projects, so we're all looking forward to that well.

Thank you, Jostein. That concludes my comments on the North Sea. And now we turn to Kurdistan and -- very pleased to be back in business there. And we resumed production, of course, right at the end of the last quarter as the chart on the right shows quite dramatically because we had just 363,000 barrels a day averaged over last quarter, which was a couple of days at the end of the quarter, if I remember rightly. And of course, we're back in business at average something like 73,000 in this quarter.

We are then ramping up activity very quickly, again, given the payment surety that we've achieved with our local sales being paid in advance and the money remitted to our international bank accounts. We offered the guidance there for the average of the year, a bit of an odd year with that -- with, unfortunately, the precautionary shutdown that we had to do in the second quarter.

We've had a slight uptick in the prices in our sales in the last quarter. We've managed to get it up to $45 a barrel. Of course, that's still well below international market prices. And as I mentioned in my opening slide, we continue to work hard to get our oil back into international markets or connected to international prices in some manner, but without giving up the payment surety that we think is of very high value in this part of the world.

With that, I will pass the floor over to my colleague, Birgitte, wishing her many happy returns, and she will give you more information on the financials.

Thank you very much, Chris. Thank you, Bijan. Good morning, everyone. As already mentioned, it's a very good morning, and we're very proud to present another very strong quarter for DNO. Our revenue in the third quarter was $1.023 billion, up 34% from the last quarter. The increase from Q2 is mainly driven by higher sales volumes and net production in both North Sea and Kurdistan. About 90% of the revenue stems from the North Sea in our third quarter.

If we look at year-to-date, our revenue is just above $2.4 billion, 143% increase compared to the first 9 months of 2025. Operating profit ended at $641 million, up 46% from Q2. Operating profit in Q3 was $222 million, as you can see on the graph.

Higher realized gas prices, partly offset by lower realized oil prices and a small net loss on commodity hedges in the North Sea and higher sales prices, as Chris mentioned, in Kurdistan had a very positive effect on our operating profit.

Our tax expense in the quarter was $494 million, increased mainly due to higher taxable income, which is a positive. Net profit in the quarter was $101 million, representing a 22% decrease compared with the second quarter. Again, if we look at the year-to-date, our net profit is $235 million, up from $41 million in the first 3 quarters of 2025. Can we move to the cash flow?

Thank you. Our cash position moved from $550 million to just above $1 billion during the third quarter. Operational cash flow was $660 million, supported by robust earnings, partly offset by negative working capital movements as prices increased during September and consequently increased the receivables as of quarter end.

We had 2 tax installments in Norway totaling $136 million in Q3. These installments are the first related to the 2026 expected profits for our NCS business and expected tax installments on the NCS for the fourth quarter will be around $230 million. Of course, that number will be influenced by any currency fluctuations as the tax is paid in NOK.

Given our strong results, there will also be a substantial tax overhang into the first half of 2027. Net investing activities were $129 million. We had $198 million in asset investments and decommissioning, offset by $68 million in net inflow from disposals and license transactions.

We further had the cash -- net cash inflow from financing activities as we drew upon our prepayment facilities related to BD activity, partly offset by payment of dividend and interest, which left the cash at quarter end just north of $1 billion.

Can we move to the last slide, please, Jostein?

Our total balance sheet is now for quarter end around $6.8 billion, of which PP&E represents about 50%, just $3.3 billion as of quarter end. Our net debt ended at $232 million, a substantial reduction from last quarter, mostly driven by cash from operations. However, worth mentioning here is that our net debt does not include the payable income tax of $938 million as reported in our books. Our equity shares remained quite stable at around 21%, and with total equity of $1.42 billion, we are well within our bond covenants.

And on the back of the strong balance sheet and cash generation, the Board has decided to distribute NOK 0.375 per share, as Chris mentioned, and this is the same level as the last quarter.

To sum it up, record revenue and operating profit, very strong cash flow and corresponding reduction in net debt. Remember, however, the strong results lead to high taxes, which will be paid in the coming quarters.

Then I think we move on to the Q&A session.

Thank you, Birgitte, for the excellent presentation.

[Operator Instructions] It seems like Teodor Sveen-Nilsen is already ready to ask the first question.

Congrats on a strong quarter. A few questions from me. The first one, that is on Kurdistan. What kind of initiatives are you doing or pursuing to realize prices closer to international pricing?

Second question, that is on NCS. Which parts of the ConocoPhillips portfolio do you think is most attractive? And have you looked at it?

Third question, that is on Kjottkake, which I understand will be called [ Lyra ] going forward. Could you -- positive to see that you have taken FID. Could you just remind us of the CapEx -- the total CapEx for the project and also estimated first oil?

Let me take on the first question with respect to Kurdistan. As you well know, the situation in the Middle East, in particular the challenges of moving crudes to the Strait of Hormuz have -- and other political and geopolitical developments in the region have opened up other routes for exporting and necessitate other routes for exporting Iraqi oil and other regional oil to other outlets. As you probably know, I'm sure you know, a lot of the southern Iraqi oil is now moving up by truck to the pipeline to Turkey, but also to Syria for export. And as new export routes develop and new export arrangements develop, this opens up opportunities for other producers in the region to also seek other outputs. So there are possibilities now that have opened up for movements of oil to the Mediterranean to Syria, which was closed before the -- during the turmoil and the civil war there. But with political stability there, other routes are opened up for Iraqi oil, including Kurdistan oil and our oil to move west through Syria. We're looking at those possibilities and opportunities.

There is, again, more oil going into Turkey from the south and the new pipelines are being put in place. So there's a lot more activity now to find export routes from Iraq and from Kurdistan, which, as you know, is landlocked to markets facing west rather than just the Turkey option and the option of moving southern oil through the Persian Gulf. So we're very actively looking at how else we can move our crude.

In the meantime, we have been able to raise the value or the pricing of our crude into the local market in Kurdistan. We started the year at just a little bit above $30. We're going to the fourth quarter -- we're into the fourth quarter with $45 prices, which is a almost 50% increase in our price just in the past 10 months. We are actively looking at other arrangements, which will move that figure up even higher. So it's a combination of a bigger push on our part to get better prices, and not just higher prices, but the certainty of payments that is key to us, and we continue to push for that and get paid in dollars into our international bank accounts. So all of the challenges of the past in terms of getting paid on time, we're getting not just paid on time, we're getting paid in advance. The payments are received and barrels equivalents of payments received are then loaded up into our buyers' tankers. So that remains the key to us. And we've been prepared over the past year or more to trade higher nominal prices or lower certain prices. And that has been key, not just as a financial matter for us, but it's also allowed us to have revenue, which we then used to drill more.

We're the most active driller in Kurdistan by far. I think right now, we may be the only IOC that's drilling. As Chris mentioned, we have two rigs, heavy rigs drilling deep wells. We have our own Sindy rig, which is used for workovers, but also for drilling shallow wells into that Jeribe formation, which we're producing from Tawke for some time. And we now have the go ahead to negotiate a third well. So we're drilling very, very actively, and these wells will give us a longer term -- both longer-term production increase, but also as prices are raised, we have more oil that we can immediately put into the market at those prices. So certainly, payment has been also a very basic part of our strategy -- our growth strategy in Kurdistan. So we're very bullish and I think our price trajectory over the past year is showing that we were able to achieve higher prices as we go, and we will push even harder to do that.

On the ConocoPhillips asset, that is obviously a very important asset, and it's an important acquisition. And we understand a number of companies have looked at it. Obviously, we're looking to grow in Norway, as Chris has mentioned, and we look at assets, large and small. And medium size, we had the best acquisition last year. The small assets were the best -- from our point of view, medium-sized assets to acquire, we successfully acquired them. We acquired the small assets, not just assets, production and reserves, but a very strong team that the small had put together and we inherited that team and they're the backbone of our Stavanger office, working with our own team from the pre-acquisition, and we're showing very, very good results, as Chris has indicated.

And at the time we made the acquisition of small, our price was a full and fair and strong price. I think the market looked at it and said that DNO has paid a bit of a premium for that. So we were happy to do that to succeed with the acquisition. But with these higher prices for oil and gas this year, I think we've pretty much covered our acquisition. We're very pleased with it. And those assets have a long life. And we're going to continue to look at acquisitions and assets and where we can make them work, we will make them work.

Chris, do you want to add to that?

I think that covers it. I just -- I can pick up on Teodor's last question with respect to Kjottkake, which is going to take me a while to get used to the new name, Teodor. I think we -- on the CapEx side, it's in the sort of $20 to $25 a barrel of oil equivalent CapEx range. And that was what we guided, I think, at the beginning -- probably in the Q1 presentation where Morten was here that we expected for the portfolio of FIDs this year. And similarly, across all those projects, we'll be doing the sort of $40 to $45 a barrel breakeven.

On the production side, of course, we hope we are planning for the first half of 2028. So it's a very exciting week at the moment because immediately on the back of the final investment decision, big contracts are being awarded, rigs are being committed. And I'd just like to take this opportunity to recognize the project teams, Aker BP. I'm pleased to say there's a number of DNO staff in key positions there as well, done a brilliant job to get the project from discovery to final investment decision in less than 18 months.

And let's not forget all the hard work ahead together with the service companies and drilling companies that we have. And we are continuing to push for acceleration even in this next phase of the project. So we're hoping that we can meet the target of Q1 2028, Teodor, but the official guiding is H1.

Great. It's helpful for those of you who are not Norwegian speakers. So Kjottkake is a hard one to learn to pronounce. But also I understand Kjottkake in Norwegian means meatball. So goodbye meatball and hello Lyra.

Lyra.

I'm not sure what Lyra means, but meatball was a bit awkward, as was Kjottkake. So good to move on.

Chris, when you say $20 to $25 per barrel, how many barrels are you assuming? Is that 37?

Yes, the 37 is the gross number, I think now, which is -- I'm not sure all of that is bookable at the end of it. It gets a bit confusing, Teodor, because not all of that will meet the SPE classification requirements at the end of the year. So the reserves and resources, 37 is reserves and resources. And then we also have a very nice upside in Kjottkake, which is probably still going to be classified as contingent resources. So those are the numbers -- yes, there's a few numbers to track on that, but 37 is the gross that we used in the decision documentation anyway.

Okay. And just one final quick question for me. I'm not sure, Birgitte, if you mentioned it, but what do you expect as cash tax payment in Q4?

I briefly mentioned it. It's $230 million expected cash tax in Q4. But of course, that will rely on the currency fluctuations as we pay it in NOK. But that's actually a combination of the tax installments and also the final part of the 2025 tax, which has a payment in November. So it's a combination of the 2026 first or second installments and the latter part of the 2025 tax.

Thank you, Teodor. Now there's a chance for others to chime in as well. There's no one on the list at the moment. But if you want to, you can push the -- oh, here we have from [ Bard ]. I believe you'll have to introduce yourself and click the unmute button.

This is Bard. I'm an investor in DNO. I just -- and of course, very a great report and happy birthday. I just want to know if you can expand a little bit on the dividend policy going forward, or if you are planning to do some share buybacks.

Good. I should also mentioned, I think Birgitte, she says she's 50, she looks younger. But I just want to also note that this is DNO's 55th birthday this year. So the company -- she was not born when DNO was formed, I was. But we're very pleased that DNO is now 55, and I look forward to not personally, but someday, the company being celebrating its 100th birthday. And there are not very many international oil companies around that have survived 55 years. So it's a proud year for DNO. And we've survived because we've taken care of our shareholders, our investors, our bondholders over the years. And our dividend policy, again, is very shareholder-friendly.

We do realize, as a company, as a Board, that when we set this dividend level, maybe 5 or 6 quarters ago, our dividend yield at the time was around 10%. It's now down to about 5%. The good news is that the share price has moved up as much as it has, and that's obviously important for shareholders too. In addition to just the dividend distribution, the share price matters hugely. And I recognize that as a shareholder in the company myself.

We do have, as you say, several tools in terms of creating shareholder value or distributing shareholder value, dividends, share buybacks, which we've done in the past, but also special dividends. I think to the extent that our share price reflects higher oil and gas prices, and it does in part, but not exclusively so part of the -- again, the rise in our share price over the last years has had to do with our success in operations and how we manage the business. But oil prices and gas prices may come down. When they will come down, when, by how much and for how long, no one knows. But we've been careful not to overreach to increase shareholder distributions and have to pull them back.

We're conservative and cautious and thoughtful in terms of what we do. And so we thought we would retain the current dividend amount through the end of the year, and we will revisit this as we do every quarter at the Board level, and we will decide into the 2027 whether to maintain our dividend level at the level that it is or to buy back shares or to do a special dividend distribution or some combination at that time. But we are very mindful of the importance of providing dividend distributions to our shareholders and have had a pretty steady record. And I think since we started the dividend distributions, but also buybacks, we've returned, I believe, after the current quarter or the third quarter dividend distribution sometime in November, we will have distributed, I think, over $600 million to shareholders during this period. So we have a track record that's important and it's impressive and it's what we want to maintain.

Beyond that, I have nothing more to say. No decision has been made. But we are focused like a laser, not just in terms of our responsibility and our commitment to our bondholders, but also to our shareholders. And you can certainly be assured of that.

Thank you. Yes. Well, we have one other question here from an analyst, Tom Erik Kristiansen.

Congratulations on the good results. Just thinking big picture and looking a bit forward here, Norway obviously has become very large already. How are you thinking about the M&A market and further growth? Are you thinking that you are at a fine size now compared to earlier being too -- maybe too heavy on the development side after having a significant exploration success? Or are you equally eager to acquire production?

Second question is, with all that exploration success in the history of the recent years, are you looking to increase even the drilling program, even though you probably have the most active one if you compare to market cap on the [ Bors ], compare yourself; are you looking to even expand that or not?

Well, we'll keep drilling. We haven't changed our mind and our approach to our portfolio. Chris described that in some detail in that larger slide and then in terms of our operations. We're going to keep drilling. As you say, we've been a very successful driller in the North Sea. We'll keep drilling. We've been a successful acquirer in the North Sea, we'll keep looking at acquisition opportunities. And we are branching out elsewhere. We've made two approaches in the past several months, one in Kurdistan and one in Egypt. As Chris said, we are looking at other opportunities in other countries, and we have a short list of countries and areas where we think, as Chris mentioned, we have a competitive or comparative advantage. We're actively looking at those opportunities and involved in discussions. Some preliminary, some a bit more advanced.

In terms of specific opportunities, we want to grow this company. We already had a track record of growth, and we want to continue that. So you could assume that growth and the larger size is important to us. And the company has a mandate to do so. However, again, as Chris mentioned, as we've said repeatedly, capital discipline is important. It's not growth for the sake of growth, it's growth for the sake of profitability and performance. So we can increase dividends and grow our size, and size matters. Again, the larger you are, the more you approach a credit rating, the more you're able to, again, lower your cost of capital, and that matters, too. Size gives you those opportunities. It makes it possible to do bigger deals. Governments like larger companies to come in rather than smaller ones. So there are strategic advantage to growth as well as commercial, financial, operational ones, but being careful to have capital discipline is hugely important as well.

We've seen a lot of companies of our size and larger -- smaller and larger, they go belly up because they went too aggressive and didn't show capital discipline. And the fact that we were still around after 55 years, I think there have been a lot of different management groups that have been involved with DNO, a lot of people have been involved. But over time, I think and certainly, in the most recent period, we've shown that we are disciplined and we've taken care of the -- managed the assets well and grown the company and grown it properly as the last quarter and earlier quarters have shown.

One follow-up on that. Should we read that as in the context of a couple of recent years, I think every analyst has been thinking that the next acquisition is happening in Norway that we wanted to grow the base here. And maybe -- and that was the second leg to the Kurdistan business, which now is sort of firmly established and probably on valuation bigger even than Kurdistan. And then, is the third leg basically, call it -- a third base where you kind of take a significant position, is that the right way to think that that's maybe strategically even of higher importance than growing in Norway? Or you can probably do both, I guess, if you find the right deals?

I think we can -- three legs is important because it's like a stool, a two-legged stool is very stable. Three-legged stool, it's a lot more stable. And one of our legs, Kurdistan, has been challenging for reasons you know, whether it was local politics or regional challenges during the ISIS crisis, and obviously, that impacted our operations.

The missile attack in 2015, obviously, affected our business. We were -- went out of production for a while. We came back very rapidly. The challenges of receivables. So Kurdistan has been great for DNO and remains a very important part of our business, but it's -- but there are challenges that we don't control, not operational ones, but political ones, security ones.

For quite some time, Kurdistan carried DNO. Operations in the North Sea were started recently in terms of history of DNO, and Kurdistan allowed us to grow the business in the North Sea. And when Kurdistan was affected by the security issues and the drone attacks and challenges, the North Sea carried the company. But now, we will have a third leg so that we have even greater supports for our business and the diversification is good. We don't want to overextend ourselves by diversifying into too many places. No one company has the ability, even the largest companies in the world, the large oil companies, I think 80% of their revenues probably come from 20% of their assets or some rules. So you can't be everywhere, but we think three makes very good sense. And DNO has had in the past years, a third and fourth leg. We had a leg in Yemen, but as Yemen started to unravel, we have to shut down our business there. We retained one discovery, but that's not going to come on stream anytime soon. We don't think. But Yemen was an important leg for DNO. And I think DNO had produced a field -- a 100 million barrels in Yemen. This is -- much of this is before my time with the company. That's pretty impressive, but that leg disappeared.

And we then went back to one important leg, Kurdistan. We added Norway in the North Sea as a second leg, which has become very important to us. The third one is important to us and we're pursuing it. But in looking for a third leg, we've seen other opportunities that we might be able to bring in and we're looking at those, too. I think we've maxed out at four for now. And if we do another leg, we want to make sure we strengthen that leg before we look at something else following that.

Okay. As we are fast approaching the 1-hour mark, I think there's room for one last question from [ Tobias ]. You might have to introduce yourself. Please remember to unmute yourself as well. Okay, it seems like we have -- Toby might have been on this --

Oh, we answered his question.

Yes.

Maybe we answered his question. So okay, with that, I think we will have to wrap it up. Thanks for taking part and all your questions, and we look forward to see you again in 3 months' time.

Thank you.

Thank you.

Good morning, and welcome to DNO's Second Quarter 2026 Earnings Call. My name is Jostein Løvås, and I'm the Communications Manager here at DNO.

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

But before we begin, I would like to draw your attention to a slide in today's presentation summarizing DNO's possible offer for Genel Energy, which was announced on the 7th of August. Due to strict limitations under the U.K. Takeover Code, we will not take any questions regarding Genel or the potential offer during today's call. Instead, we will refer you to the slide and to the full statement, which has been published on our website through the news messaging service and via RNS.

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

Good morning. Welcome to the Q2 2026 interim results presentation by DNO. I'm joined by my colleagues who usually attend and present at these quarterly reports, presentations. I will just say welcome and say a couple of introductory words before we proceed to discuss the slides.

This quarter has been a very strong one for DNO, among the strongest in our history, and our history is a long one. We celebrate this year the 55th anniversary of the formation of DNO. And that's quite a number of -- more than half a century. We are still around. Many of the oil companies in the international industry who were operating and active in 1971 when we were formed, are no longer in the industry for different reasons. So this makes us one of the oldest of the international oil companies in the world, and we're very proud of that history and of that record.

This quarter was the strongest ever for the company in certain financial metrics, but we're very proud of our performance. And our strong performance has taken place, notwithstanding the fact that one of our most important legs, operating legs of the company, our operations in Kurdistan, were shut in for most of the quarter.

During that time, and of course, all of you who follow the company and follow the region and the industry know that we've had security events and threats to our operations, as have other companies in the Middle East and in Kurdistan, in particular. But we used that period -- while we were not producing for safety and security reasons, we used the period to -- especially the second part of the quarter to initiate workovers on our wells and even to start drilling new wells to position the company to start operations and production, in particular, when the conditions are permitted and to have the ability to recover production at a rate that brought us back to where we had been preshutdowns.

We have restarted production and my colleague Chris will discuss the operations in Kurdistan, but we hope to have -- to sustain the production at the levels that we had before the shutdown over the course of the remaining quarters, but obviously, with one eye, always 2 eyes or 4 eyes on the security conditions and situation because paramount for us is the safety and security of our people on the ground, of course, of our facilities as well. But we hope that we continue to produce in Kurdistan and have a safe and secure operation in the coming weeks and months.

I would also like to make a quick reference to what Jostein said about the possible offer that we might make for Genel Energy, our partner in Kurdistan. And we hope that the board of Genel Energy will engage with us as we pursue this opportunity. But I can't -- as Jostein said, because of our 2.4 announcement, of a possible offer and the conditions set by the panel that governs these matters in London we can't say any more about that other than to say we hope to engage with the board of Genel and see how best to proceed on this matter.

With that, I'll ask Chris to present the operating portion of the presentation today.

Thank you, Bijan, and good morning from me. As Bijan has already touched on, another great quarter for DNO. And it really shows what a strong, diversified company we are now. We're just over 1 year on from the Sval acquisition. And yet again, the merits of that acquisition are coming through extremely powerfully in our results.

I've talked a lot over the last year about the operational synergies that, that combination has unleashed, and you'll see more examples of that in this presentation. But I think the highlight in this quarter is the diversification. Obviously, as Bijan has described, we've had a difficult quarter in our Middle Eastern business in Kurdistan with almost no production. But by having the very healthy North Sea business, combined with the high oil and gas prices has meant that we've still hit record revenues for the quarter.

So the strong, diversified, growth-oriented DNO that we mentioned in our press release today is very clearly evidenced by last quarter. So the statistics are in front of you on this slide. Another very good quarter of production in the North Sea, a bit above what we were expecting. And with the prices we achieved, more than compensating for almost 0 production in Kurdistan in that quarter.

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

On the back of that, we saw this record revenue of $760 million. We say largely unhedged. It's maybe 1% of the revenue was hedged, so effectively unhedged in our North Sea, and that traditionally has been the DNO approach.

And with the great volatility that we've seen this year, that position has been rewarded by not capping the upside from these commodity prices.

On the back of a high revenue, of course, you see that flowing through the operating profit and the net profit. But particularly gratifying for a simple engineer such as myself is the free cash flow, which is my most important performance indicator. And with this very high cash flow, we have actually paid down $220 million of debt in a quarter with 0 production from Kurdistan. Who would have thought that 3 years ago for DNO? And of course, the Board were comfortable to approve the quarterly dividend once again. And so a few years ago, we pivoted towards our shareholders. We are maintaining that pivot, if that makes any sense, as an English expression. But in any event, we continue to provide an attractive dividend yield, in addition to the upside potential we see in our equity story.

Moving on to the North Sea. Very strong quarterly production, as I've already mentioned. And we had expected things to go slightly worse in the second half than the first half. So we were expecting a stronger, but it has exceeded even our estimates. What you see, and in the last quarter, we had a deep dive into the tieback projects that we have ongoing and coming up on the North Sea. My colleague, Morten Grini, for those who are watching, gave you a good run-through of those projects. And once again, last Q2, you see that portfolio delivering with 2 new developments coming on stream. And this is, as we explained last quarter, very much the model. And you see that with the developments that were approved in the fifth bullet point on this slide.

The fourth bullet point points to yet another value-adding transaction. And as I've mentioned in the last few quarters, that's another element to our business model in the North Sea, very definitely. Here, it's a great step that we've been looking to do for some time, because we have multiple projects either already tied back to the Gjøa hub. And we have several, including Ofelia, Cerisa and Gjøa Nord in the next bullet point that are being tied back to that hub. We did not have an ownership position there, and we have -- the team have managed to get us in with a 5% interest, which is extremely helpful, obviously, when you're tied by so many of these satellites.

So we're very pleased with that transaction and comes on the back of a string of similar North Sea either swaps or small acquisitions, small divestments. So with the majority of --returning to production -- with the majority of the maintenance shutdowns behind us now and still ahead of our estimates, we are increasing our guidance for 2026 production, and we're now estimating we should get about 85,000 barrels of oil equivalent, on average, through the year.

Next slide, please. Turning to the growth side of the business. And we are, as we've said many times, very growth oriented, not only here in the North Sea, but looking for growth in other areas also. And the latest in that regard was our Carmen appraisal, which came in, in June. You see the results there. And that, of course, is right next to the Atlantis discovery, which is moving forward to development and which we entered through another one of those North Sea deals that we've been delivering. We announced that in March. So we discussed that also in the last quarter. But Carmen is within, I think, about 20 kilometers.

And in the same area is the Afrodite discovery, where we picked up a 10% interest. We're hoping for the best on that appraisal, but that is a deep sort of tight gas opportunity. So we'll see what comes with that, but we're operating on the well at the moment. And 4 more wells to be drilled in our exploration appraisal portfolio this year. Thank you.

Over to Kurdistan. And unfortunately, again, the quarter dominated by the war and the knock-on effects of the war in the Middle East. We had to shut down for the safety of our people and remained so for most of the quarter in terms of production. But when the ceasefire was signed, we started to cautiously ramp up activities. And really, the slide describes that cautious ramp-up that took place.

We have -- as Bijan said, the priority, of course, is the safety of our staff. We have put in place extensive passive protection in both for the accommodation blocks, but also around our process facilities in the form of big concrete walls, which we are advised is the best way to minimize the impact of the greatest risk we have, which unfortunately is drone attacks. With that in mind, we felt sufficiently comfortable to restart production. But as anyone who reads the news knows, it's a very uncertain environment. And we are, not quite daily, I guess, but we're driven by events.

We're reviewing security frequently. And I would say we've been close to shutting down again recently, but we're still going. And if the security condition allows, we do expect to be able to get the PSC back to around the same level of production which we had preshutdown and we are drilling. But really, you can't get away from the security situation at the moment. And I hope in 3 months' time, we'll be able to say -- to give -- to look forward with more confidence and give better estimates. But at the moment, really, it's anyone's guess.

We are, of course, producing though, and we are, as we have done for the last few years, selling the oil to local traders. And at the moment, we're getting in the mid- to upper 30s. But as we always do, we've been insisting on being paid internationally before we deliver the oil. So at least we have a complete payment surety for oil.

Thank you. Then, as obviously, many of you joining the call, or if not all, are aware, and Bijan mentioned, on 7th of August, we publicly announced our possible offer to acquire Genel Energy plc. As already been mentioned a couple of times, we have strict guidelines from the takeover panel that we have to stay within the -- what we've stated in that announcement. And I think that's fine because I think it speaks for itself.

The indicative offer we made is 69p per share which is a premium of 38% to the price of Genel share the day before we made the announcement.

We believe that if they were to accept this offer, the shareholders of Genel would see certainty of value. And that's irrespective of what happens with their offer for Capricorn on the terms that they've announced. We note that if they don't succeed in taking Capricorn, then Genel won't have the diversification that has been working on for some time and a significant G&A cost burden that we consider to be disproportionate to the company's scale.

The proposed offer that we've made is not conditional on completion or lapse of Genel's announced offer for Capricorn. So it won't matter what happens in that process to our offer. Genel shareholders have had -- Genel shares have had a relatively poor trading liquidity in recent history. So we consider that our offer represents a liquidity event for those Genel shareholders, should they wish to take it.

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

So with that backdrop, we have to decide by the 4th of December -- 4th of September, sorry, most likely, although there are certain circumstances in which that date can be extended, but we'll have to decide whether to announce either a firm intention to make an offer or that we are not going to make our own the famously dubbed put up or shut up deadline for us. And as Bijan mentioned, our hope, as we stated in the 2.4 announcement is that we could get into some constructive discussions with the Genel board on this offer.

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

Thank you very much, Chris, and thank you, Bijan. Good morning, everyone. As you said, Chris, at the start of this call, we present another very strong quarter for DNO. Revenue in the second quarter was $761 million, up 21% from the last quarter. The increase from Q1 is driven by higher realized oil and gas prices, partly offset by lower sales volumes in the North Sea, explained by underlift as well as seasonal maintenance. As production in Kurdistan restarted very late in the quarter, we recorded no sales or revenue here.

Comparing with the second quarter 2025, we must, of course, take into consideration that Sval was included in our figures as of June, which explains most of the large movements of almost 200% revenue increase.

Year-to-date, revenue was almost $1.4 billion, tripling the revenue from the first half 2025. Operational profit ended at $439 million, also a substantial increase of 55% compared to $284 million in the first quarter. Our tax expense in the quarter was $340 million, an increase mainly due to higher taxable income, which is a good thing. Net profit in the quarter was $83 million, representing a 65% increase compared to the first quarter. And year-to-date, the net profit is $134.1 million, up from negative $10.9 million in the first half of 2025.

Next slide, please. So let's move to the cash flow. Our cash position moved from $531 million at the end of the first quarter to $550 million at the end of June '26. The operational cash flow was $639 million, supported by robust earnings and working capital movements. We had the 3 tax installments in Norway in Q2, totaling $98 million. And as these installments were the final ones related to the 2025 results, the cash tax in the coming quarters will be higher. We expect the total tax installment on the NCS in the second half of around USD 320 million, though this will also, of course, depend on the exchange rate at the time of the payments. The strong free cash flow in the second quarter should be seen in context, of course, then of the higher tax payments starting from Q3.

Net investing activities was $228 million, with the main effects coming from $202 million in asset investments and $26 million in decommissioning. We had a material reduction in drawn amount under our offtake financing, as Chris mentioned, of $221 million and other financing of $73 million covers dividend and interest on our debt.

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

Next slide, please. Our total balance sheet as per quarter end is around $6.2 billion, of which PP&E represents around 50%, $3.2 billion at the end of the quarter, a slight increase from last quarter. Our net debt ended at $553 million, down $238 million or 30% from the last quarter, mostly driven by the previously mentioned reduction of the offtake financings during the quarter.

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

On the back of the strong balance sheet and cash generation, the Board has decided to distribute NOK 0.375 per share, as Chris mentioned. And following this payment, DNO will have paid dividend to our shareholders for 17 consecutive quarters, totaling $491 million, in addition to $62 million in share buyback.

All in all, a very strong quarter for DNO. And by that, I think we'll move over to the Q&A session.

Thank you, Birgitte and Bijan and Chris for an excellent presentation. And before we move on to the Q&A, I guess it's timely to remind you all that we will not take any questions about Genel and the possible offer due to the U.K. takeover code limitations.

And so with that, I think we can take the first question. And Teodor Sveen-Nilsen, analyst, you may unmute yourself.

A few questions. First on the Tawke production and the current production in Kurdistan. You mentioned that you have restarted, but it's a little bit on and off. Could you comment on at what level has the quarter-to-date production been in Kurdistan? So that's the first question.

Second question is also on Kurdistan. That's on local prices. I know you get like pricing authorities, which also I think that you highlighted in your presentation. That's the same as previous periods. Why hasn't the local price increased when global oil prices has increased substantially lately?

And then third question, that is on NCS and 2027 production outlook. You definitely have several fields coming on stream into next year. I'll also assume some underlying decline on the current production. But should we should we expect like double-digit percentage production growth on NCS next year? Or is that too aggressive to assume that kind of growth?

Let me start with the Kurdistan question, and I'll turn it to Chris and ask you to respond to the NCS question. With respect to our production level, that's a hard one to respond because as I mentioned, as Chris mentioned, we look at the safety and security situation in Kurdistan, in Iraq, in the region and importantly, in our areas of operation on a very regular basis, almost a daily basis. And it's possible that we will have to shut down production very quickly.

And Chris may refer to that as well. And because of the uncertainties and the shut-in, we prefer not to give a figure because today's production may not be tomorrow's production. And I think it would give a false projection and raise expectations or lower expectations if we report our production on a weekly basis, a daily basis, on an ongoing basis, it's not really helpful to our investors. It's not helpful in other respects either. So we will obviously, in our next quarterly presentation, present the numbers for this quarter. I hope they will be strong numbers, but I can't give numbers that represent 1 day's production, high or low or not at all, because, again, this would not really give a good guidance to the market as to what to expect in terms of Kurdistan production.

We're producing currently. We've said that our expectation is that we will reach -- if all goes well, our reach and sustain on an ongoing basis, our preshutdown production levels. And what we have said about drilling and workovers would be -- would help offset normal decline in some of the wells and hopefully give incrementally higher numbers. But we just can't say this is a very unique situation. And we have one foot on the accelerator in terms of operations, in terms of drilling and one foot always on the brake.

So I think the best numbers we can give you will be the numbers we present next quarter, which should be backward looking rather than forward looking.

Having said that, you asked about pricing. Obviously, pricing in local markets sometimes are related to external markets, sometimes they are not. In this instance, there is a disconnect between prices for fuels and diesel, gasoline, other products in larger Iraq and the global markets, oil-producing countries typically sell products into the local market at well below international prices. This is true of Iraq and also true of Kurdistan. So there is this disconnect.

If the oil is moved into international markets, that changes. But at the current time, our sales reflect, again, other conditions, other considerations than those in terms of our North Sea pricing for our oil, in particular, that tracks the global supply and demand in global markets very closely.

We have said that the price that we are currently selling to local traders and where that oil moves, we don't know. But our sales price is in the mid- to high $30 a barrel range. Before the shutdown, we were at a very, very low $30 range. So that's already about a 20% increase over our preshutdown levels, which is great. But our pricing does not -- the net pricing to us does not reflect international prices. That's unfortunate.

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

And when we first started going to the North Sea, it was Kurdistan that was carrying the quarters, multiple quarters for us and allowed us to move into Kurdistan revenues. Kurdistan operations allowed us to go into the North Sea. And now the shoe is on the foot of the other sister and the North Sea is carrying Kurdistan. And hopefully, in the third quarter and the fourth quarter, both will be -- will have their dancing shoes on, but we just don't know and we can't offer you that guidance.

I wish the situation were different, but it is what it is, and we try to make the best of it. But again, the safety of our people on the ground in Kurdistan is uppermost on our mind. That's not to say we don't -- we're not concerned about safety and security in the North Sea or the Ivory Coast or any other part of the company. Safety and security and the well-being and welfare of our team is uppermost in our list of concerns and considerations and therefore, our corporate policies.

Chris?

Thank you, Bijan. And I'll turn to Teodor's third question about North Sea production. And yes, you're right that, Teodor, we are growing in the North Sea. It's a very exciting part of our business. It takes a huge amount of energy from the team, primarily in Stavanger, a few over here in our corporate headquarters as well. So we like to get involved, too.

The growth trajectory that we are pushing for, we first set out in the pack we published at the time that we bought Sval. And at that point in time, I think we set out our ambition for 100,000 barrels of oil equivalent a day DNO share by 2030. And we put a graph in the slide pack showing the sort of trajectory towards 2030.

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

That's clear. And then just to clarify on Tawke. Bijan, you said that you expect production to come back to preshutdown levels whenever the war ends. So then we're still talking about 100,000 barrels gross from Tawke expectation, right?

Teodor, I don't want to give, again, any projections or any guidance. We had said, I think at the start of the year that with the 8-well drilling program that we had planned that we thought we could reach 100,000 barrels a day in -- by the end of this year. Circumstances changed. We shut in production.

When you shut in production, performance of some of the wells will be affected. We have to go in and do workovers and they get pumps that perhaps because we were shut in, burned out and replace those and make other repairs. And that's been something that we've initiated, and it's an ongoing process. The wells we thought we would be drilling at the first part of this past quarter, we didn't drill, we couldn't drill.

We started drilling in the latter part of the quarter as conditions seemed to have improved security-wise for some period of time. So we are behind the schedule that we had anticipated early in the year and behind in terms of the ability to reach targets that have been set back. And again, if security conditions deteriorate, we will stop drilling the new wells again.

I hope that won't happen, but we're mindful of that.

So, Teodor, I think you should assume based on what has been happening on the ground in other regions that our goals are -- will not be met, that these will be suspended. By how much and for how long? I just don't know. I wish I did. If we had the crystal ball and knew what was going to happen security-wise, we would stop operations or expand operations. But we don't have that crystal ball. And we just have to watch this day by day.

But as we've said repeatedly with onshore wells and onshore fields, it's easy to hit the brakes and easy to hit the accelerator. But when you hit the brakes in a fast-moving car, and then you start again, you lose some time in terms of your performance.

I should also note that I talked about our North Sea and Kurdistan as sisters. Again, this is a relic of the period in which DNO was formed in the '70s -- '60s, '70s. The big oil companies were called the Seven Sisters. Why sisters, I don't know. But the sisters or Seven Sisters are now, I think, maybe 4 are the super majors, and we were always the small sister. But the feminine term is used when it comes to the oil industry, maybe to show the softer side of companies.

We have a soft side of our operations. But we work in a very difficult masculine geopolitical environment, and that's okay, too.

Next question comes from an analyst Nikolas Stefanou.

Congratulations on a very strong quarter and it's really good to see these numbers coming through. I want to ask you a couple of questions on the North Sea and then one in Kurdistan. I understand the reluctance from giving an outlook for 2027, but you have increased this year's production in the North Sea. So would you be able to give maybe an exit rate for this year?

And then the other question, could you please remind me the number of FIDs planned for this year and what else is left in the North Sea?

Certainly. I can dissect the one on the production side. You asked for an exit rate for the year. I don't have that number in front of me. But obviously, we have this morning reported the actual production for the first 2 quarters. And we have upped our guidance for the year to 85,000 barrels of oil equivalent a day.

So I think that you should be able to quite easily calculate what to expect in the second half, if that helps answer that question, unless any of my analysts here are coming up with a number for you. In the meantime, what was the second question, sorry?

Yes, it was the number of projects sanctioned and to be sanctioned in 2026? And where are we at there? Just an update, basically.

So we updated this quarter that we sanctioned 3 more of the subsea tiebacks in Q2, Cerisa, Ofelia and Gjøa Nord. And we are still projecting that the [indiscernible] Kjøttkake project will be sanctioned later in the year, which I think is consistent with the presentation we made 3 months ago where we did a bit of a deep dive into that satellite portfolio. So if anyone is interested to get a bit more information on our near and medium-term satellite tieback project portfolio, if you click on the slides from last quarter, you'll get a bit better overview. And I think the dates there are still valid.

Okay. Okay. So it's just one more FID planned for 2026 then?

For '26, yes.

Okay. The other question, I guess it is for Bijan, and it's kind of like a bit of a strategic one. I guess in the past few years, the DNO narrative, especially after the Sval acquisition, was to bring investor attention towards the North Sea. And it is a magnificent business. You are doing very well there.

Given the recent developments, are you -- where does Kurdistan sit in your strategy at the moment? Because if this still kind of like happens, you're going to have a very large sort of like presence there, like even larger than it is now. So I just want to kind of like get a sense of where Kurdistan fits with the rest of the portfolio now that the North Sea has grown so much.

Kurdistan is very important to DNO. It has been historically. You might recall that this past December, we hit a very substantial -- significant milestone. We announced that we had produced 500 million barrels for the Tawke license between the Tawke field and the Peshkabir field. This is a very important milestone. It's by far the largest production from fields in Kurdistan, fields that are operated by international oil companies since recent period of 25 years or so. So it's been very important to the company.

But we obviously, given all the challenges in Kurdistan, these challenges aren't just Kurdistan. We've seen these challenges now throughout the Middle East and much, much larger producing countries as a consequence of the war. It is always imprudent to be a single asset company.

Single asset companies are, again, very, very exposed to movements in oil and gas prices, movements in production and then the external conditions, geopolitical, political, security and otherwise. So it was a very smart move. It was a deliberate move. We started moving into the North Sea starting about maybe 5 or so years ago. And then we were able to accelerate and move up into -- in a major way with the acquisition of the Sval assets.

And before the shutdown, our 2 legs were each producing about equal volumes, about 8,000 barrels a day in an operational sense. Of course, the net figure and the entitlement figures are a little bit different. But we felt that the 2 major parts of the company were both doing well and contributing importantly in a diversified way to our performance and to our growth.

Kurdistan remains a very important part of our business. And we, again, are investing now. We are -- we have our own rig. We have a DNO-owned rig that is drilling shallow wells, but also dealing with our workovers of our existing wells. We have another larger rig drilling additional wells on Peshkabir. We have engaged a second large rig. These are rigs that can drill to the depth of our producing reservoirs in our fields. And we're now looking for a third large rig to come in. So we're actively drilling.

I think we're the only international oil company in Kurdistan that's drilling. We are the only international oil company in Kurdistan that's producing. The others have all shut in because of security concerns of their own reasons. But we're the only one drilling, drilling a lot, the only one producing. And we're committed to Kurdistan, and we are committed in terms of spend, in terms of activity.

And we're able to do it because we are a large company. We do have our North Sea business that can support our presence in Kurdistan. We've been the first international oil company in Kurdistan. We have a strong presence in Kurdistan. We have great working relationships with the Kurdistan regional government, and we're proud of our history of our relationship with them, and that allows us to have the confidence and the support to keep going. And this is not the first time when ISIS came into Northern Iraq, and they came very, very close to our operation.

All the other companies shut down and left. In fact, the U.K. government instructed British citizens to leave, as did the U.S. government. But DNO stayed and we produced. And during that period, we weren't paid very much. But it was important for us to be a good corporate citizen and to be there for Kurdistan at a very, very difficult moment when millions of refugees have come to the country. Kurdistan's financial support from Baghdad was cut, and we felt we needed to be supportive and be with -- in Kurdistan at bad times as well as in good times.

And so that mindset continues. And both then and now, we remain committed to operation of Kurdistan. And that shows that we're able to do it because of our size and our diversity and our history there and our relationships with the people of Kurdistan, the government of Kurdistan and the Ministry of Natural Resources there. So we feel that they have our back, we have their back and we're going to keep going.

And hopefully, the situation in the Middle East will resolve itself. It can't go on like this. And once it does and we hit the accelerator, we're going to go faster than any other company. And hopefully, it will make up for the period in which we've been -- our production and our operations have been at some -- have been disturbed. And so we have that confidence, and we are showing -- putting our money where our confidence is, I suspect, in our operations and our activities.

And we support our people. We go in very regularly to be with them to understand the security issues, the safety issues and other considerations at multiple levels. I go to Kurdistan, Chris goes to Kurdistan, rest of our team, we're always happy to do it, always excited to go there, but we're mindful of the security conditions, and we plan our travel accordingly. So we're very committed to Kurdistan.

Could I add one point? Bijan, you covered it very well. But on the financial side, I think that Kurdistan sits better in our business these days. We used to have to hold hundreds of millions of dollars on the balance sheet to protect the company against downturns in Kurdistan. And you've seen us successfully navigate that, especially if you're a bond investor, over 20 years. But that comes at quite a significant cost. And we have -- in the years I've been with the company, many comments from equity investors pointing out the inefficiency of holding such large amounts of net cash.

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

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

Could you please talk a bit more about how you think about the export payment regime? Do you see that now as more proven that you see some of the companies that has got paid through that mechanisms? Or is it higher risk if you take a look at Iraq's total economy and the lack of southern exports?

Is that a regime you would like to change to now when you think about access export pricing, what you mean with that? Or is it -- this is the right time maybe to stay with the local sales? How do you think about that and timing of how to manage this process?

We have no visibility on the payment scheme that the other companies have set up. We know how it works, but we understand that there is a preliminary payment. I think it's $16 -- based on a $16 a barrel payment. What the actual figure is, we're not sure because there's a large formula that governs that. And there was to be a top-up payment, the bulk of the payments to match international pricing was to come later. It was anticipated to come in a matter of months. I don't think that payment has come.

I do know that Iraq's budget is squeezed, importantly because during part of this crisis, they have not been exporting through the Persian Gulf. And it's not a secret that the Iraqi government has said that their ability to meet various budgetary needs and commitments has been reduced by the fact that their exports have been much lower than the budgeted and the plan. So where that's going to go, we don't know.

We, DNO, together with our partner, Genel, on the Tawke, decided that we preferred certainty of payment rather than promise of payments. We've been promised payments in -- certainly in Kurdistan in the past that were not made. And we had to find other ways to compensate for that, and we did so successfully in the period -- the ISIS period where we weren't paid.

We put in place a plan that eventually worked out quite well for us and also for Kurdistan. So this time, we thought that we don't want uncertainty of payments. We don't have to build up receivables as all the companies have done and that certainty of payment would allow us to budget how much to spend to grow the business. So we thought it was better to have 1 bird in the hand than 2 birds in the air.

And that has allowed us to conduct our business, to keep producing because we know we're getting paid when we produce, we wouldn't otherwise and to invest. So that's why we're uniquely placed. The one company that didn't participate in that scheme is the only one producing and the only one investing. So maybe we've done something right. We've been told we've done this right.

And our payment scheme, we've described it as cash and carry. We don't really mean cash and carry, although during the ISIS period, bankers would show up with suitcases of cash and we fill it's like going a gas station, and we'd fill them up. Now, of course, it's not cash as such. But we do get payments in advance of deliveries.

Typically, companies deliver the oil and they're paid, depending on the location, approximately the market, they're paid 45 days later, 60 days later. We get it in advance, and we deliver the amount of oil that was prepaid for to the trading companies. And that's worked out well for us. It's worked well for them.

I think there's a margin for them. We don't know what that margin is. But just the fact that they're prepaying, there's a cost to them. And we try to have a good relationship with them and work with them. We work to try to get that price as close to the actual market price as possible.

We would love to export. But there are, as you know, political and other constraints. Kurdistan is landlocked. It has to export through a neighbor. That neighborhood is a difficult neighborhood. The outlet of choice for the companies in Kurdistan, for others, has been through the pipelines that go through Turkey to the Mediterranean Port of Ceyhan. We'd like to access that. We always work towards trying to get to that point. And that's a work in progress.

I can't give any visibility or projection or guidance on when that will happen, but that clearly is our aspiration, and we hope that it will be possible. I can't give you a date, but that is an aspiration. And I assure you, we work on that, and on finding a way to do that in a very, very -- very regular, ongoing basis and speak to the different stakeholders.

But as we understand it's complicated and very complex. If we get there, that will be fantastic. And I hope to get us there, but I can't give you a date. But in the meanwhile, we're doing, I think, quite well, thank you very much, because we -- our payments are secure, and we use part of that payment -- those payments to reinvest. And as long as we're producing and getting those payments, we recover our costs pretty quickly.

But as Chris said and as I've suggested, we have a backup now. In the past, the backup was several hundred million dollars target that we had to always have that cash on hand. Now we don't need that in the same way because we have the North Sea.

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

We now have access to prefinancing in terms of our North Sea oil and gas. The cost of that prefinancing is probably half of our blended cost of bonds and our hybrids. So we now have access to financing that the very largest oil and gas companies have across the globe because they're part of our prefinancing arrangements, and we're effectively borrowing against their balance sheets as part of this arrangement that we have.

We give them secure supply, committed supply and they help us with the financing, and that's going to make a significant difference to the company. We'll need to maintain as large cash balances. We can use those cash balances to invest in drilling, in bolt-on acquisitions and other acquisitions and do so with cost of money being something under 6% versus 12% for other Kurdistan oil and gas companies versus other companies anywhere that are not of that size and scale of the big sisters. And that makes a big difference to us as well and allows us to keep going Kurdistan.

Any further questions?

Do you want to say anything more on that point? Or have I covered it?

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

Chris, anything more to add on this or any other points?

No, I think you've covered it very well, sir.

Okay. With that I think we can safely conclude this earnings call and thanks to all for attending and see you again next quarter.

Thank you.

Thank you.

Thank you.

Good morning, and welcome to DNO's First Quarter 2026 Earnings Call. My name is Jostein Lovas, and I am the Communications Manager here at DNO. Present with me here today in Oslo are, as usual, Executive Chairman, Bijan Mossavar-Rahmani; Managing Director, Chris Spencer; and CFO, Birgitte Wendelbo Johansen. In addition, we have a surprise guest, Morten Grini, who is Senior Vice President, responsible for Assets and Project Development in the North Sea business unit. And Morten Grini will wrap up the presentation with a North Sea deep dive. After the presentation, we will open up for questions in the Q&A session and press questions will be dealt with afterwards.

With that, I give the word to Bijan, please.

Good morning, and welcome to our first quarter 2026 results and operational updates, again, with a focus on the North Sea. This is a beautiful spring sunny day in Oslo, clear blue skies. You won't have a chance to see it because we're in an indoor room. My colleagues typically put me in an indoor room away from a window and away from the seagulls that fly over Oslofjord. Those of you in Norway, some of you may understand the reference. But trust me, it's a beautiful day, and our results are similarly sunny and blue skies for the first quarter, and this has continued into the first part of the second quarter.

Much of this has to do with higher oil and gas prices, principally in the month of March, but the impact has been significant on our results and those of many other international or national oil and gas companies. The strong performance of our North Sea operations, which we will review in more extensively, Morten will, and others will touch on it. Our strong North Sea performance has been able to capture higher prices. We are, as you know, not producing currently in our Kurdistan sector, but the acquisition of Sval Energy last year and our much larger presence in the North Sea now has proven the important de-risking that acquisition and diversification has brought to the company. And now we are a far more resilient company in terms of capturing as much as we can the performance of our 2 business units in Kurdistan, but also in the North Sea, principally on the Norwegian continental shelf.

The higher oil prices, of course, and higher gas prices are a result of the geopolitical turmoil and the war in the Middle East. Based on recent latest reports, we may be seeing a light at the end of that tunnel and the peace and stability brought back to the Persian Gulf region and Iran in particular, and the other countries that have been impacted by this crisis. The higher oil and gas prices resulted from it that they have not been because of any action by the -- by our industry. Our industry has benefited, but of course, we all recognize that tragedy and devastation and suffering of people that are affected by these geopolitical crises are not something we welcome nor have we had anything to do with their creation. The impact has been a strong financial results for us and other companies. And these will -- these are not only reflected in our first quarter results. They will be importantly reflected in our second quarter results, but they give us the financial means with which to continue to grow our business. There are many opportunities in the DNO portfolio and the additional resources will allow us to capture those. So that's also points to a stronger weeks and months and years ahead.

With that, I'll turn it to our Managing Director, Spencer, to give more color to the performance during the first quarter and facts and figures about the first quarter. Please, Chris.

Thank you, Bijan, and good morning from me. As introduced by Bijan, we've had a good quarter with the strong performance again in the North Sea lifting our profits on the back of those higher prices that we've seen, particularly in March. So the operating profit level results increased by a full 60% quarter-on-quarter. And happily, we have black ink on the bottom line, which Birgitte, our CFO, will take you into a bit more in details shortly. The production, of course, as you see on the chart on the right-hand side of the graph, we again, at very strong levels of production in the North Sea.

A new record by just 400 barrels a day, or barrels of oil equivalent a day, I should say. But we'd still love to talk about that because first of all, it re-emphasizes the importance of the Sval acquisition we made last year, which quadrupled our North Sea production. And of course, at a time like this, the strategic importance of that acquisition is self-evident to everyone who follows our company. Also that, that is a higher level of production than we expected to have when we made the acquisition, which is a great one of the many areas where that acquisition so far has been very successful for the company. As we say on this slide, we're not resting on our laurels. We are challenging that we put forward. We've been very open about our target to get to 100,000 from what we have within our portfolio in the North Sea by 2030. And I'm very pleased that my colleague, Morten Grini, is joining us this morning to give you a bit more insight into some of the key projects that will underpin that ambition.

Another element that we've been very active on, and I hope you will continue to see, is the new business development. Not giant deals like the Sval one, but very much building on that through smaller and frequent transactions as we refocus that large North Sea portfolio into core areas and seek to accelerate production through business development as well as project development. And the deal we -- the swap deal we did with Equinor in Q1 is a fantastic example of that. I'm very pleased to say that we found a win-win deal. Equinor very happy with the deal we understand, and BMO is very happy from our side, and it's accelerating the production from and some of our discoveries in unusual way because we swapped out of those discoveries into primarily Atlantis, which we expect to come on sooner than the discoveries we left. Smaller deal, but another nice bolt-on is the Vega transaction, which we announced today. We just did yesterday.

So thanks to INPEX and of course, our team, a small deal, but once again showing the way we are building and strengthening position in our core areas. Last on the slide, but very much not least, the dividend was maintained by our Board of Directors in their meeting yesterday, not a difficult decision on the back of these results, and that's maintaining a strong track record over the last 5 or 6 years.

Next slide. So I'm just going to briefly touch on Kurdistan because we have a new number of slides on the North Sea, which Gordon will present shortly. In Kurdistan, we started the quarter optimistically and strongly. We had recommenced drilling just before the end of last year and had really great results from the first 2 wells we drilled. And until, of course, we got to the middle of end of February and the world changed for us as it did for everyone. Of course, we had to shut down as a precautionary measure. We are ramping up our what we call passive protection, in other words, concrete walls.

So in case we do get targeted and we do whatever we can to protect, of course, our people, but also our critical facilities and particularly those that have long lead times to repair. Following the declaration of ceasefire, we have started tentatively to get back to work, bring back people to site and so forth. We've resumed work over of existing wells and restarted drilling. That means that when we're ready to start, we are optimistic that we'll be able to bring back Tawke and Peshkabir at higher rates than we left off at.

So obviously, we're not quite sure now where the production levels from Kurdistan will be, so the final bullet point, saying at the moment, of course, '26 production will be lower than we thought when we addressed you a quarter ago. Similarly, investment's going to be lower. But when we do restart, we're expecting strong levels of production.

With that, I will pass over to Birgitte to take you through the financials.

Thank you, Chris. Thank you, Bijan. Good morning, everyone, from me as well. I'm very glad to present, start the year by presenting very strong results from DNO. The revenue in the quarter was $627 million compared to $482 million in Q4 2025. Please note that if you look at year on year, the large movement went from Q1 '25 is mainly related to the acquisition of Sval, included in our accounts as of June '25, and that's why you see the large movement from Q2 to Q3. If you look at the movement from Q4 '25 to Q1 '26, the main drivers are, of course, the increased prices in the North Sea and also the increased sales volumes.

In Q1 '26, we have 93% of the revenue stemming from the North Sea and about 7% remaining from Sval. Look at the operating profit, as Chris mentioned, is a solid improvement from Q4. Also again, we don't compare with Q1 since that is not including the numbers from the North Sea, now Sval or previous Sval, now DNO, North Sea business unit. There are 2 one-off effects that I would like to mention. One is the change of deferred tax assets, having a positive effect of about $30 million on our numbers and the other one is an increased SG&A in the first quarter of about $20 million, which is related to the reorganization in the North Sea, that's also a one-off effect. That brings us, as Chris said, to solid black ink for the first quarter of $51 million in net profit in 2026.

We move to balance sheet, Jostein? Sorry, the cash flow. First, we ended 2025 with $454 million in cash position, and the result after Q1 was $531 million. A solid improvement there as well. If we look at the cash flow from operations, stronger than previous quarters. High prices in March is yet to be reflected on cash flow, and you can see this in the cash flow statement through an increase in trade receivables of $125 million. At tax, we had 2 tax installments in Q1, totaling $64 million. Tax, we had 2 tax installments in Q1 totaling $64 million. That means we will have 3 tax installments in Q2, around $95 million, collecting the 2025 tax. Then we have the investing activities of $153 million, consisting of $107 million in asset investments and $48 million in decommissioning, partly offset by $3 million in net cash inflow from equity account investment in West Africa, as I said on the slide.

If you look at financing activities, that includes net interest payments and also FX, net cost was $88 million, leading us to a cash at quarter end of $531 million. And the balance sheet, please. We have a very strong solid balance sheet still. Total balance sheet is about $6.2 billion, of which half is PP&E, and that has been quite in line the last 4 quarters after the inclusion of Sval in Q2 '25, as I mentioned. If we look at the net debt, an improvement there as well, about 12% reduction in net debt from $886 million by the end of Q4 to $790 million in Q1 '26.

We have an equity percent -- equity share of the balance sheet of about 21%. The equity is $1.3 billion, so that is well within the covenants in our bonds. On the back of this strong balance sheet, as Chris said, the Board has decided to pay a dividend of NOK 0.375 per share, 16 consecutive quarters in a row with dividends to our shareholders, totaling $497 million in dividend and $62 million in share buyback. That is quite strong. On the back of that, a very good quarter, very good position for DNO.

I hand over to Morten for a deep dive into our North Sea business.

Thank you, Birgitte, and good morning, everyone. Today, it's my pleasure to talk to you about -- or give you some highlights about the project portfolio in the North Sea. And if you look at Q1 results, production results of close to 90,000 barrels, you for sure see line in sight of reaching 100,000 barrels per day production in the North Sea by 2030. The scribbles you see on this whiteboard is some schematics identifying development opportunities for one of our discoveries in a spring session together with Aker BP. I'll get back to that later.

And starting off with our sanctioned projects that are coming on stream between now and 2029, representing about 200 million barrels gross reserves. And starting off with Symra, that's a 4-well subsea tieback to the Ivar Aasen platform. And here, we have 2 wells already on production as of April 2026. That's about 9 months ahead of the PDO plan, so well done by Aker BP and the license to make that happen. We're still drilling, and we have 2 more wells to finish off. Expect to put these 2 on production in Q3 and Q4 2026.

And then over to the Dvalin and North, which is a 3-well subsea tieback to the existing Dvalin subsea template. Here the subsea infrastructure is in place, and we are currently drilling this 3-well campaign. 2 wells have been drilled to TD with the results as expected. And here we hope to get to production in Q3, also well ahead of the PDO plan of January 2027. Next, 2-well subsea tieback to the Brage platform. Both wells have been drilled and the reservoir came in as expected. We have some subsea campaign going on this year and also some work to be done on the Brage or Asgard platform. Here, OKEA is still in on good drive to get to production start in Q1 2027 and potentially late 2026.

And last but not least, the Berling projects, which is a 3-well subsea tieback to Asgard B. Subsea infrastructure is mainly in place, and we are getting ready to start drilling operations late this year or sometime during first half next year. Peak production start is in Q1 2029, and critical path is the work to be done on Asgard B. And hopefully, we can also accelerate production here from Q1 2029 to late 2028.

And now next here is the discoveries we have made, where we have finished appraising appraisal scope. Here you see it's 9 different projects that is being matured for final investment decision between now and 2028. If you look at the first 4, Cerisa, Cuvette, Kjøttkake, and Ofelia, they have all final investment decisions in 2026 for production start planned in 2027 and 2028. I plan to come back in some more details here on Kjøttkake, Kveikje, and Atlantis. But first, I also want to highlight the focus that DNO has on accelerating first oil on all the projects and with the ambition of getting all this on stream before 2030.

We have a fast-track mindset, or a get off your assets and develop mindset, which basically means say, what does it take to bring first oil sooner? And if it makes sense to make it happen, we go after it. If you look at the 2 columns to the far right, you see the scheduled production start for these, and you also see the DNO ambition, if accelerated, with the goal of getting all this, as mentioned, on production before 2030. The success of that, of course, remains to be seen. We're working hard to make it happen. And also wanted to mention a couple examples on our fast-track mindset. First of all, Kjøttkake development, that was discovery in Q1 2025. We have a final investment decision coming up in September this year, but we're on good path here to be able to deliver first oil in Q1 2028. That is 3 years from discovery to first oil, which is no other project of this kind have been delivered that quickly in the North Sea.

If you look on the schematic to the right, you see Kjøttkake mentioned there. That's a 4-slot template tieback into the Nova subsea field. It's where Harbour Energy is the operator, and then further tieback to Gjøa, where vår energi is the operator. Critical for this success for us was to immediately appraise the discovery we had back in 2025, and there shortly thereafter, team up with Aker BP to do a sprint to mature a development concept which we identified. And then shortly thereafter, we put a team together. Aker BP had a team just coming off another project. It made sense to hand the operatorship over to them. And we also have secondees in from DNO into that team and started the planning of this project with early pre-FID investments of the long lead and vessels was also critical to maintain the opportunity for Q1 2028 production start.

Of course, also important to have a close dialogue and early involvement with vendors on this, but also hosts and regulators, it was also important, and that is progressing very well. And over to Kveikje. Kveikje is the base plan there was to bring Kveikje into the Ringvei Vest development and down to Troll for a 2031, 2032 production start. And here in Q1 this year, the license and Equinor as the operator, asked then DNO and Aker BP to go ahead and perform a sprint on behalf of the license to look into this alternative of taking Kveikje to Kjøttkake and up to Gjøa as an alternative to be able to accelerate first oil with a couple of years. We had the sprint together with Aker BP, and they identified the development concept, as you can see on this schematic, with a 4.3-kilometer tie-in from Kveikje into Kjøtkake. There's a team in this team working on this to mature this development concept simultaneously as they're maturing the development concept to take Kveikje down to Ringvei Vest and to Troll.

Concept select here is coming up this summer, and then we will see what alternative will be chosen. Still to be confirmed what alternative we will go for. Chris mentioned, of course, happy with the BD deals accelerating production for us. In this case here, it's Atlantis, where we had swapped then with Equinor to get 19% in that discovery. But the plan is a tieback to increase [Indiscernible] where we also have a 19% work interest. FID here and investment decision is coming up early next year and a production start in 2029 or 2030. Expect to be at around 8,000 barrels net DNO when they get to plateau in 2030.

Also wanted to mention on this slide here, we have appraisal program ongoing. And Afrodite and Carmen is in the same area. If in discovery could be developed back to Kvitebjørn potentially in some sort of combination with the Atlantis. Which takes me to my last slide, which is upcoming North Sea 2026 exploration program. We have 6 wells planned, 3 appraisal and 3 exploration wells. The change from previous report out was of course we got Afrodite in with the deal with Equinor, we handed Mistral Nord and Sjørøver over to them. And Sjørøve was also moved from previously we planned on drilling in 2026 to 2027 because of rig schedule. Still a good program coming up here now in 2026. We have already started to drill on Carmen, where we expect to be in the result shortly.

And DNO, we remain among the most active explorers on the NCS, and it's another exciting portfolio to drill also now in 2026, as you see. Some of them may be some good opportunities for fast-track development. Thank you.

Thanks a lot, Morten, for the excellent presentation. And then we'll open up for questions in the Q&A session. I guess I should give a couple of technical remarks there. [Operator Instructions] With that, it looks like Teodor is ready to ask a question.

Can you hear me?

Yes. We hear.

A few questions from my side. First on summer maintenance for NCS, given the strong oil and gas prices we see now. Is it tempting to postpone some of the summer maintenance, or is it possible at all? Second question, that is on Kurdistan. Impressive to see that you already have started drilling there after the potential peace plan. Just wonder what do we need to see specifically to see you resuming production and not only drilling? Third and last question, that is on guidance. In fourth quarter report, you provided some guidance on production and operational spend. I didn't see any update on that in the Q1 report. Could you just confirm that the guidance given in the Q4 report is still valid?

Morten, do you want to answer?

Yes. For sure. Summer maintenance, some of the scope here, is important for tie-ins. We have important scope on Brage, which is important for to tie in Bestla. We also have important scope on o Ivar Aasen and Edvard Grieg for the, for this Symra production. We also have some critical maintenance that we have to do on the Norne field because of backlog there. Some of it's difficult to push out in time. But I'm sure there'll be some optimization opportunities there to maximize on production.

Thank you. On Kurdistan, yes, we resumed drilling, and we did that following the first ceasefire that was announced. Our concerns in Kurdistan in terms of operations broadly, including drilling and workovers and other investments and activities. Our concern is the safety and security, primarily of our staff, but also, as Chris mentioned, our critical surface infrastructure.

In the time that we've been, we had stopped operations at the start of the war, the Israel, U.S. war, and on strikes on Iran, we started put into place as best as we could passive security measures that has since we've been in the form of concrete walls around critical infrastructure and even more importantly, around residences and areas in which our staff either live or work. We have now put in something over two kilometers of these concrete walls in the Peshkabir field and also in the Tawke field, so we're more comfortable that we have provided a safe work environment as much as possible, as much as we are capable of doing for our staff. Knock wood, there have been no strikes and therefore no impact on the individuals or on our equipment in Kurdistan since last summer where we had those drone attacks that we reported on.

So with that, we resumed the drilling, and other activities so that we can hit the button when the time comes with respect to again, safety and viability, commercial viability of our operations. Once we hit the button, as Chris said, we expect we will have even higher production levels than we did when we stopped production. And as a result, in part of not having produced these fields for some time, so there will be flush production, but also a result, again, as Chris mentioned, of our drilling in the interim period. We have new wells coming on that are available now to be produced or will be coming off production soon. Now I made a reference to commercial viability because if you recall, as we again widely reported, our average sale price prior to shutdown was around $30 a barrel, just a bit over $30 a barrel.

That price was that we were receiving, and we had indicated that we received that the payments for our production in advance of production. We were paid first and then produced subsequently, quickly thereafter. But that was in a global price environment of, I don't know, $60 Brent give or take a few dollars. We're in a very different environment now. There are wild gyrations in prices every time there's a report of peace or new strikes, prices can move $5, $10, $16 a barrel in a day. The average seems to now be about $30 to $40 a barrel more than it was before.

And so we are obviously not prepared to sell our oil for any period of time at the same price today. Much higher price environment globally than we did previously. But how do we get there? Again, there's a lot going on that affects the pricing and affects how we sell our oil, to whom, and to where or from where. The government of Iraq has only just been announced that there is a prime minister who has been elected, subject to confirmation by the parliament in Iraq, and that's expected to take place. It'll take some time, and it's taken many, many months for to get to this point. A cabinet has to be appointed and approved. That will take a bit of time. Until that happens, any discussions we have with Baghdad and the Iraqi State Oil Marketing Organization, and we are having those discussions, will take a bit of time.

And those of who follow Kurdistan also know that the contract between the Government of Türkiye and Iraq for the use of the pipeline that takes Iraqi and Kurdistan oil to the Mediterranean port of Ceyhan, that contract expires in the end of July. What will replace it, we don't know. It's still a work in progress. What the implications of that are in terms of the access of Kurdistan companies to that pipeline and Iraqi companies to that pipeline, under what terms and conditions, that remains to be seen. And how that is resolved, and it'll have to be resolved by summer, by the end of July, will impact how we can market our oil and what terms and conditions.

So there are a number of moving parts out of our control, but there are imminence. There will be a government in place in Baghdad, hopefully, in the not too different, distant future in a matter of weeks, and a matter of couple more months, there'll be a new, potentially have a pipeline agreement that will govern how our oil can move, at least through Türkiye to global markets. There's a situation in Syria as which there's a lot more stable today. There's still work to be done there's repairing pipelines and the roads and access to companies to move oil and gas out of Syria. That opens up another possible route. We've said before that we are trying to and hoping to, and probably in a matter of months, if not earlier, we'll be able to access export prices in some form now even when we were exporting our oil through Türkiye. Teodor as you well know, and others, shareholders and analysts know, as well, we were getting, again, much higher prices, but there was still a deep discount because we're moving across a large territory geographically, and it's complicated.

But my expectation is we will approach those sorts of prices or those sorts of discounts to Brent and global prices that were in place previously. We're pretty optimistic we'll achieve that. And once we do that will make a very significant difference in terms of our production, our sales, our pricing, our revenues, our operating profits, our net profits. So we're -- that's our target, and that's achievable once some of these complexities are addressed and hopefully resolved, and hopefully sooner.

Chris, would you like to add something to that, or?

No. I think that's a comprehensive answer. I can just touch on the final question on guidance. The only guidance we updated this quarter, Teodor, you'll have seen on was on the Kurdistan business. I touched on that on the slide I presented. And obviously with the current, with what's happened since the 28th of February, we're not really in a position to offer new guidance. I think you can make your own judgment on that just as well as we can given the current situation. And then the fact that we haven't updated the other guidance means that we stand by what we said last quarter. Simple is that, basically.

The next question comes from [ Claudia Carpenter ]. You might have to introduce yourself.

I'm a reporter. Is that okay?

There's no one else on the list, so we can take a question from a reporter.

It's really interesting what you're saying about Iraq. Couldn't you give -- since you say that the production and investment that you'd planned in Kurdistan is going to be lower than previously. Can't you say what you're expecting now? You must have some expectation if you say that there's an expectation.

You raised 2 questions about what's going on politically and what we're able to do. We have resumed now our investment plans that we had previously announced, which included the drilling of 8 wells in Kurdistan this year. We're back on track. We have rigs drilling. We're going add rigs. And so our investment plan was interrupted maybe a couple of months, but it's now been resumed. I believe we're the only international oil company in Kurdistan drilling and with such ambitious drilling plans and such ambitious, but also extensive. So we're back on track drilling. The fact that we've had such a great quarter and that our revenues are higher because of -- partly because of higher prices in March and now in April, and going into May, there's a lot more cash coming in.

So we have the corporate resources with which to execute our plans, investment plans. So that we're doing. What happens in terms of actual production and price, those are out of our control. Price, of course, depends on perhaps the global prices, but also importantly, what happens to the price that we can achieve and other international oil companies operating in Kurdistan. They have a different price plan and export plan than ours. They reached an agreement last year and we chose not to participate in that in those arrangements at that time, in part because we were able to receive payment from our buyers in advance of our actual sales. We called it cash and carry. Of course, it wasn't really cash. It was cash during the ISIS period, where people would show up with suitcases of cash. The banking system had broken down at that point. They delivered suitcases of cash and we delivered the truckloads of -- tanker truckloads of oil to them. Now, of course, it's a different arrangement, but we still use that cash and carry term.

But you can't just give me a number? What you think the production is -- the net production is going to be in Kurdistan in 2026?

If you can -- you're a reporter, I assume you follow Iraq in the region. If you tell me what's going to happen in Iraq and when the government formation will take place and when the what will happen to the Türkiye pipeline. If you give me those inputs, I can give you the outputs that you're looking for.

Okay. And so are you exporting everything through the pipeline, or are you using trucks?

When we were still exporting, it was through the pipeline. There have been periods in the past where the pipeline wasn't available to Iraqi and Kurdistan sales that we used trucks, lots of trucks.

Apparently there's like a huge surge in demand for trucks now everywhere.

Claudia, I think that will -- we will have to take the next question now. That's from Nikolas Stefanou. I think that will be -- and there seems to be a follow-up question from Teodor, I think those will be the last two questions today. So Nikolas, you might go ahead.

Good to hear back from you again. So that's -- sorry just a clarification on Kurdistan realizations. You very rightly said so that, I mean, we're like $120 debt Brent now. And for that number for this quarter, but I mean would you -- if you're going to resume production there and sales, would you try and make an agreement with the traders for a much higher price before you do that? Or how should I be thinking about your sort of like approach to maybe getting a bit more of the share of the pie there?

Well, again, the price we were getting before and the arrangements that we had in place before were based on $50, $60 oil prices. Those are now doubled. It moves up and down every day, as I said. So you can be assured that our aspiration is to get a higher price, and we are talking to several different parties to see how best that can be achieved.

It's complicated by politics and geopolitics and the access to infrastructure -- transportation infrastructure. It's complicated, but you can assume and you should be assured that we will do everything possible to try to capture the higher oil prices and the higher value that our oil commands. But I hope when we meet again for our next quarter, the discussions, that we will have some of those arrangements clarified and hopefully put into place, but we're working day and night to try to get there.

Does the change to the oil price environment change any way you think about your participation in the tripartite agreement?

We had some concerns about that agreement that we voiced at the time. That was many, many months ago. That agreement is now evolving in terms of how it's working. I'm not privy to all the details, but I assume we will have more information about how it works and how those arrangements and those payments compare to what we were receiving through our alternative arrangements. So we'll see how that's working out, how the consultants report, if you're familiar with the details, has worked in practice, how quickly and how much Baghdad is going to be paying the other companies under that arrangement.

And if that turns out to be favorable, if some of the uncertainties that we were concerned about have been resolved one way or the other, then we'll have more information as to how that option works compared to other options that we are producing. Again, the region has changed. Who knows? If the U.S. and Iran come to some agreement and sanctions are removed, Iran would be one other way of getting oil out of Kurdistan into global markets through swaps that there are refineries near the border between Iran and Iraq. One can potentially move oil into those refineries and get a swap in the Persian Gulf and hopefully by then the Strait of Hormuz will have opened up. I mean, the world is changing very rapidly and creates optionality, including how Iraq and Türkiye what agreements they reach and the use of that pipeline are an option.

So there are new options that did not exist when those agreements that by the other international companies in Kurdistan reached their agreement. They did the best they felt they could at that time. The world has changed. It's going to continue to change and in ways that we're we can't quantify right now what are the implications of that. And, of course, the role of Baghdad in the sale and transfer of Kurdistan oil was based on a budget law that was passed over a year ago, with a different, with a different government. And how those, whether there'll be a new budget law that also covers Kurdish oil or whether Kurdistan will choose to again, export its oil, the oil from the region itself, we don't know.

But those are all -- there are a lot of moving parts, and we're watching them very carefully, and we will try to engage in the arrangements that we can put into place that best collapse the price we receive for our oil, that price and the global prices. But again, we should know more on how those conversations will go, at our next quarterly meeting, I hope. If something is put into place before then, of course we will announce that to the market, when that takes place.

And there will be a last, short follow-up question from Analyst Teodor Sveen-Nilsen.

Thank you for taking that follow-up. It's regarding North Sea lifting schedule in Q2. Should we expect overlift or underlift for your North Sea production in second quarter?

Birgitte, can you address that?

Yes. I don't have all the details on top of my head. But April and June more normal is at least some thoughts that I've been given. I don't have all the details and all the facts for the time being, to be honest. Sorry about that. We can come back to you afterwards. Maybe Morten, you can help me.

I can chime in. We talked about the Q1 production. Just talk about production from my side. The Q1 production, as we talked about doing, came in very well. We expect to go down as we mention now because of the maintenance and this upgrades that is happening now in Q2 and Q3, slightly less than production, of course, next 2 quarters before we then ramp back up and have a strong finish in 2026 here, around 90,000.

I think -- no, no -- for lifting.

The liftings are always very difficult to predict, as you know, and particularly when you get to the end of the quarter, just a mere few days can make a cargo flip from 1 quarter to the other. It's extremely difficult to give guidance on liftings. However, I just emphasize for everyone that we have contracts in place so that we don't just get paid depending on the price of the oil on the day of the lifting. We have what we call PQ contracts in place so that we're exposed to the price of oil every day. So you don't have to worry. I know for some of my colleagues who have offshore production in West Africa and so forth, then you cannot get those type of financial arrangements, and so the price you get is just when you load your cargo.

For us, we are on both the gas and the oil in the North Sea. We have the exposure to the ongoing prices that you see. Well, you may not see on your screens because, of course, the dated Brent has been considerably higher than the front-month Brent during March and April. Whilst the liftings impact on our profit and loss side of our accounts, look, when it comes to the cash flow, we are not dependent on the liftings.

Are there any other questions?

Just a press question that we'll deal with afterwards, I think.

Because we're like Donald Trump, we can't stop talking to the press. Also to our shareholders. We don't want to cut you off if there are other questions. We can take a few more minutes to address them. If not, we can close this session and then get on the press and shareholders.

I just wanted to ask, what is your name?

Sorry, if there is a press question, it's not going to be raised by you. Yesar Al-Maleki, from Middle East. I think, MEES, right? Will you unmute yourself?

Good morning. Can you hear me?

Yes.

Congratulations on the results. My question is to Chairman Bijan Mossavar-Rahmani. You mentioned I am just picking up on something you mentioned. You mentioned that there has been some sort of conversations with SOMO with regards to restarting production, if I understand it from your earlier answer. Because what we hear on the Iraqi side is that they want the Kurdistan companies to produce so they can double exports currently to Turkey. I am just trying to understand if there has been any conversations on that recently.

Thank you. Any other questions? The answer is yes. Yes, but, and we've had discussions with others as well who might open up channels to exports and monetization and the start of our production and monetization of that production. We still, I mean, the issue of security and safety of our people and of our equipment is critical to us. We've been hit by drones before. We had to cease production while we did repairs again, and we sprinted to make those repairs. But we've been hit before and damaged, and we are very sensitive to that. And the situation in the region continues to be very uncertain.

Other companies have been attacked as well by missiles and drones. That is the single most important issue for us. But we anticipate we will start production and that anticipation of startup of production, we started up now for some weeks of work in the fields, work over some existing wells so that when we start up, the wells are available to produce at maximum volumes. We've drilled new wells. We will have additional production. So we're doing what we can, so when we hit the button, we will have significant amount of oil going into the system of Kurdistan. We are, as you well know, the largest producer in Kurdistan. As I said, we're the only company actively preparing for startup by drilling new wells, and I believe once we, as the largest producer, as the oldest producer in Kurdistan, once we start production, our expectation is that other companies will follow, their production of these other companies below ours. But I think if they see us producing, and they see us producing safely for some period of time, they will add.

So for purposes of SOMO, when we start up, it won't be just us starting up at 85,000 barrels a day. It'll be additional oil coming from Kurdistan as well, and that's, I believe, to everyone's advantage. The other companies once we take the lead and take the first hits. I hope there won't be any hits, and that the situation will be stable and the region peaceful. But our engagement and our involvement in exports will open up much more oil than just ours alone.

Just a pick up on this. Is the channel you're looking at, is it Syria or is it Turkey, when you're looking at other alternative channels? I'm thinking here trucking.

Trucking is an option through Syria. Trucking is also an option through Turkey. But I think that the currently available route for substantial amounts of oil, where the transportation cost is lowest, it's the pipeline through Turkey. That has been the option that our preferred option, and the one that we've used, maybe not half the period we've been producing in Kurdistan because we have also used trucks. We used hundreds of trucks a day during the ISIS period and during other periods where the Iraqi-Turkey pipeline was not available.

There was a time when we were producing, I think, 125,000 barrels a day in Kurdistan. We were loading a truck every 1.5 minutes. At the time I described it as being like a Coca-Cola bottling plant.

The trucks would come up with -- fill up, they'd move on. That's an option, but trucking is far more expensive per barrel than pipelines. Our preferred route would be the pipeline through Turkey, for economic reasons, and for other reasons of efficiency. If it comes to trucking, we'll look at that option as well. Trucking opens up Syria as a possible route. It also opens up Iran. If hopefully all the issues are resolved and sanctions removed, then Iran would be an option for us as well.

Thank you. That concludes this earnings call and thanks to all for participating. See you again next quarter.

Thank you.

Good morning, and welcome to DNO's Full Year 2025 Interim Results Earnings Call. My name is Jostein Lovas, and I am the Communication Manager here at DNO. As you may understand from the color photo, we've had a landmark year with lots of celebration. Recently, our Board of Directors and senior management were in Kurdistan, marking that 500 million barrels of oil have been produced from our operated Tawke license. This photo shows our 2 chefs, Executive Chairman, Bijan Mossavar-Rahmani, cutting the cake together with the chef at the Tawke field.

Now back to Oslo and the results. Present with me here today are Managing Director, Chris Spencer; and CFO, Birgitte Wendelbo Johansen. And the Chairman is joining us online from New York, and we will kick off the presentation. Please, Bijan, go ahead.

Jostein, thank you, and good morning to everyone attending this call. We will, of course, be discussing the interim results for the fourth quarter of 2025 and for the full year, but also taking a peak look at the direction of the company in 2026, our goals, our targets, our plans and programs. As Jostein mentioned, 2025 has been a very transformative year for DNO with milestones and records. He mentioned the great milestone of 500 million barrels produced from the Tawke license that includes the Tawke field itself and the Peshkabir field. 500 million barrels produced is a lot of barrels. And this field has outperformed the expectations of many not necessarily ours. We've always known this is a very important license. And we produced 500 million barrels and many hundreds of millions of barrels still left to be produced from these 2 fields.

So this has been a terrific asset for DNO. And I think we've managed it responsibly and safely and well over the more than 20 years that the DNO has been producing from this license. Going beyond that important celebration and visit that the Board and I and senior management paid to Kurdistan in January. I'll say a few words about other records reached by DNO in 2025. Our net production increased significantly by about 43% year-on-year to 110,700 barrels of oil equivalent per day.

That is the highest level reached in the company's 54-year history, boosted in important respects in the second half of 2025, of course, by the transformative acquisition of Small Energy Group in Norway. Of that total, 110,000, 111,000 barrels a day equivalent, 54,300 barrels of oil equivalent per day was in the North Sea and an almost equivalent amount of 52,600,000 barrels of oil per day equivalent in Kurdistan. So the company is now about evenly balanced between the North Sea, most importantly, of course, Norway and also Kurdistan. So our 2 legs are now about equal size and both very strong and robust. We have a smaller leg in West Africa, where we produced last year 3,300 barrels of oil equivalent per day.

Most of that is gas in the Ivory and in the Ivory Coast. The figures picked up in the fourth quarter of the year with net production of as much as 88,300 barrels of oil equivalent per day in the North Sea and 58,000 barrels of oil equivalent per day in Kurdistan. Our revenues in 2025 more than doubled year-on-year to close to $1.5 billion. That's a very significant figure, of course, for us, with cash from operations also nearly more than doubling to $929 million last year. Our operating profit was strong, increasing to $513 million, while net profit stood at a negative $25 million, that reflects importantly, the income tax in Norway and net financial expenses.

And our CFO, Birgitte will go into some detail on those numbers. And Chris will -- in this coming presentation, go over our operational issues and then talk about both in more detail the figures that I just presented and our plans for 2026, which are very exciting as well. We now have a very strong platform coming out of 2025 to go into '26 and into the ensuing years. One final point for me. The Board of Directors yesterday approved another quarterly dividend of NOK 0.375 per share to be paid to our shareholders later this month. Last year, our total dividends paid to shareholders was $130 million, again, in 2025. And I should also note that we have been paying quarterly dividends consistently since August of 2022.

And we're pleased to have that also as part of our ongoing targets is to prioritize our shareholders and pay quarterly dividends on the back of our performance. So with that introduction, I now pass this on to our Managing Director, Chris Spencer, to cover the operational issues, and I will stay, of course, in the meeting and happy to respond to questions together with my colleagues during the Q&A at the end of the presentation. So thank you. And Chris, if you would please resume the presentation.

Thank you very much, Bijan, and good morning from me from cold Oslo. So as Bijan mentioned, I'll take you through the operational aspects of our quarterly report. And as the title of the slide -- I'm starting in Kurdistan, obviously, and as the title of the slide indicates, we are putting our foot back on the accelerator in Kurdistan. As the previous slide mentioned, 2025, however, was characterized by tremendous resilience of our business in that region. And that's really the first couple of bullet points that we have on the slide are alluding to that. So notwithstanding the production deferment resulting from the drone strikes back in July, our team did a fantastic job recovering from that, and we managed to average 70,000 -- just over 70,000 barrels of oil equivalent per day throughout the year.

And you can see that from the numbers how the recovery panned out because by fourth quarter, we were back at 77,000 barrels a day roughly. And that looking back, it's -- we highlighted it in several of the quarterly presentations last year, but it's a real credit to both the team and the quality of the assets that we have in the region [Audio Gap] and compares very favorably with the 2024 average production rate of about 79,000, so despite not drilling for 2 years, the team has kept pretty much a flat production apart from when we've been hit by drones.

So as Bijan mentioned, we've been celebrating 500 million barrels, but I think that, that performance in the last couple of years has illustrated for us that there's plenty of potential left in the Tawke and Peshkabir fields. And that is one of the reasons why we've decided after a [ 3-month ] hiatus to get back to drilling. That has started already. We have -- in December, we kicked off our 2-rig 8-well program.

So it's a little bit in '25, but mainly 2026. And that's the company-owned Sindy rig and one contracted rig from our long-term partner, DQE. Second contracted rig and third rig in total is now being signed up, another DQE rig. And so we -- by April or so, we should have 2 bigger rigs and Sindy all working in the Tawke license. That makes us by far the most active international operator in the region once again. Of course, that means increased CapEx this year. But that's good news, good money spent. It's going to have very short return on investment times.

And of course, as a reminder to everyone, the cost that we -- all cost that goes into the company license is recovered as we spend it under the cost recovery mechanism in the PSC. But of course, that requires one to be paid, which I'll come back to. On the back of that resilience that we've seen from the assets and our ability to maintain production at around the 80,000 mark combined with the drilling program that we're now putting in place, we have our target to hit 100,000 barrels a day of gross operated production from the license which, of course, DNO share would represent 75,000 working interest.

And as you will -- if you've read the press release, you will see we are guiding an average of 65,000 share from the Tawke license this year. As I touched on, the cost recovery, of course, requires one to be paid. And this is a key driver, as we discussed before, for the choice we made to continue to sell our oil to a local buyer where payment, we call it -- we call or use the shorthand cash and carry, but it's actually a bank transfer, international bank transfer, and we make sure the money hits our account before we hand over any oil. So we are -- we have that payment certainty in an uncertain region. We're not content with that.

However, we're very pleased that [indiscernible] and other producers agreed to get back to using the export pipeline last year. I think that's very positive for the country. And the buyer of our oil puts it into the export pipeline as well. So with that reopening, we hope there are and aim to find a way to get back into export markets or export pricing for our own oil during 2026, and that's a key aim for us this year. Moving on to North Sea and a couple of general themes here. First of all, the slides talk to the business model of the North Sea, where we have -- we're turning exploration -- we're doing exploration and identifying upsides in existing assets, maturing those into resources, reserves, production and therefore, dollars.

And as you know, DNO is pushing hard to fast track that process wherever we go, trying to shorten the cycle time from an actual investment to return on that investment. And that is one of the themes that runs through the slides we have for you. The other, of course, is the impact of the Sval acquisition on that business model for us and the operational financial synergies that we are realizing from that transaction. So we maintain our active but focused exploration portfolio. We're making discoveries and then we are impatient to get those on stream. We've guided 82,000 of net production for this year from the portfolio, which gives us that financial and tax efficiency for the fast track development model that we're pursuing.

We just gave for your reference here the pro forma figures as if we had owned Sval throughout last year, just to give you a sense of where the assets stand. Of course, for DNO shareholders, this is the first year where we have the full effect of Sval production. So the increase in production that Bijan mentioned is the real number for DNO shareholders to consider, but the 81,000 just gives you a sense of where the assets have been performing and that we're tweaking those up this year as well. Many, many fields that we're involved in now as the slide says, the recent highlights of the start-up of [indiscernible] and Verdande. But as we show in the slides, this is part of conveyor belt of opportunities that we're working on ongoing developments that have been sanctioned and are in halfway through the projects with start-ups in the next few years.

And that's seeing -- that means that we need to ramp up the CapEx a little bit. Again, in Kurdistan, we have the cost recovered in Norway, as most of you know, these are tax deductible when you have a portfolio such as we have now with 82,000 barrels a day of production. We are also realizing cost synergies from the Sval acquisition. I would -- and we've just been through the painful process of downsizing and streamlining the team. That does realize cost synergies, but I think from my perspective, that's much more about getting the right team, streamlined efficient team in place to go after the business model we're pursuing.

And I would say that we have a fantastic team. We've actually had to let some good people go in order to get the rightsized team because we believe that an efficient team is the way to run the business. And then back to the conveyor belt of exploration through to production and dollars. Right at the front end of that is, of course, the APA licensing rounds that we are very active in Norway. And again, we had a very successful round. I think we were ranked third in terms of the number of licenses received from the ministry.

We move on to the next slide. This one, we think, speaks for itself. And I'm really pleased to show the progress that we've made since we announced the acquisition, which was the yellow dotted line here. So back in March, when we came to the market and then started raising money on the back of the acquisition, this is what we expected to achieve from the combined portfolios. And as you see, we've been, I was going to say pleasantly surprised, but we've also been working very hard to make this happen. So the projection now looks better.

And of course, this is our daily work that we are seeking to improve this further. And again, you see from the different colors, this life cycle I'm talking about of working through from exploration and upsides are shown here through the 2C category into 2P and then out the back in production and dollars, which is what then comes back for capital allocation to dividends and reinvestment in the business. So I think that one speaks for itself as a very strong development for the outlook for our business. Subset of that is, of course, the 4 discoveries that I touched on earlier.

The interesting thing here is that those are in a prime core area for us. This is one of the core areas that we highlighted for operational synergies, again, on the back of the acquisition, and you see that coming through. So we have very strong production from the Nova field, which is not actually labeled here, but is just to the southwest of the hub. And that is what also the Suttaka development is to be tied back to Nova and into. So great example of the operational synergies that we were hoping to achieve. And Suttaka is also the best example of fast tracking that we are looking for, where together with Aker BP, we are going to have that in production 3 years after discovery and that we are trying to replicate across the portfolio.

Also, the -- as you see from the statistics on the slide, the fast track is not done at the -- by sacrificing sort of breakeven price for these developments. $40 to $45 per barrel seems to be very much part of the course on the NCS when I look around the industry. And as I've touched on a few times, we have many other discoveries in our portfolio where we're trying to unlock time lines and get fast track developments moving. And if I take the next slide, please. And then we go back to the ones that we're trying to add to our hopper. And so we're back very active exploration appraisal program again, $200 million spend, again, tax deductible. I have to be careful how I use that phrase because I don't want to give the impression that we don't care about costs.

We are very cost focused, but investors should be aware that those hard spent dollars are still tax deductible in Norway. So very exciting wells coming up this year. I'm not sure what to touch on. But of course, there's 2 appraisals there of very significant discoveries that we've made, [indiscernible] and Norma. So I'm excited by the outcomes there and numerous exploration wells. [indiscernible] is worth just mentioning because that's a higher risk than many -- all of the others, but we have a carry arrangement there. So for us, financially, it's not such a high risk on the chance of success since we have the carry. We've added a column to this slide as well to talk to -- we try to express what we're working on, which is that one thing is whether you find something or not, which is the traditional geological chance of success on the left.

The other is how quickly and efficiently you can bring that into production. And so we're trying to give you a sense of that on the chance of commerciality column. As you would expect from what we've been saying before, if we have discoveries, then we see the chance of commerciality for all of them is medium to high. And the second bullet point on the slide explains that a little bit more where there's 3 examples there where exploration prospects are going into licenses where you've already got discoveries that are heading towards development that they should be able to piggyback very quickly on the back of that.

Another example is Carmen where the adjacent Atlantis discovery is being matured by Equinor to tieback to [indiscernible] , where we have a 19% interest. And so if the resources there are firmed up, that also should be able to hop on the back of Atlantis and be developed rapidly. In the interest of time, sorry, I could go on all day on these topics. Let's move on. And I think I'm now handing over to the CFO, Birgitte to take you through the numbers.

Thank you very much, Chris, and good morning, everyone. Yes, let's dig into the financial results. We start with presenting the preliminary income statement for the full year of 2025. Our revenue was $1.474 billion, up 120% compared to 2024. The growth is strongly influenced by the acquisition of Sval Energi last year, which was consolidated into our accounts as of June. 86% of the group's revenue stems from the North Sea business in '25 compared to 65% in 2024. Operating expenses have increased also following the inclusion of Sval and operating profit ended at $513 million, also a substantial increase from 2024 and also previous years, as you can see. 2025 pro forma operational spend was $1.55 billion, which we expect to see climb to $1.65 billion in '26, as you've also read probably in the press release this morning.

Net profit in '25 was negative $25 million, roughly at the same level as $27 million we had in 2024. And the large difference between the operating profit and net income is due to higher financing costs as well as tax rate above 100%, and I will explain the latter as a part of the quarterly results on the next slide, please. So we have an extra table here to give you some more details on the fourth quarter isolated. Our revenue in the fourth quarter was $481.6 million compared to $546 million in 2025. And the main drivers for the reduced -- the revenue decrease is reduced sales volumes and realized prices in the North Sea, partly offset by higher sales volumes in Kurdistan. And for the North Sea, it's worth mentioning, reminding you that we had a strong production growth in the quarter, 14% higher than the previous quarter.

But as you know, revenue is recorded based on sold volumes, and we had a large underlift in the quarter -- in the fourth quarter of '25. Our operating profit was $177.1 million in the fourth quarter, down from $221.8 million in Q3. The main drivers are reduced revenue and increased exploration costs expensed in the North Sea, partly offset by the impairment reversal and gain on license transactions. And as you can see, we have a net impairment reversal of $56.8 million. And I've seen this morning that this has caused a little bit of a confusion amongst the analysts. I'll give you some more details on that. If you look at Note 7 in the report, we have the full description there with all details.

And there, we see that the net impairment reversal contains a reversal relating to Bestla in the Brage area, and this reversal is subject to a 78% tax charge. Then we make some impairments related to other assets, but these are goodwill impairments. So there is no corresponding tax shield related to this. So with the combination of tax charge on the reversals and no tax shield on the impairments, we end up with a net impairment contributing positively to the pretax profit, as you can see, but negatively to the net profit.

Move over to the cash flow, please. Thank you. Here's an overview of the full year main cash movements. And as you can see, they are quite substantial. Net cash moved from NOK 899 million at the end of '24 to NOK 454 million at the end of '25. Quite substantial movements also in between, as you can see on the waterfall on the slide. Our operational cash flow is strongly supported by the inclusion of the Sval numbers and totaled NOK 929 million in 2025 compared to NOK 433 million in '24. Sval is also the main change when we report our tax payments, which totaled NOK 264 million in '25 compared to only NOK 1 million the year before. Look at our investment activities, NOK 814 million out of the NOK 831 million you see on the bar there represents investments in organic and inorganic assets, including the Sval acquisition. And the rest is decommissioning with NOK 33 million and net cash from equity accounted assets in West Africa.

For financing activities, it has been a very active year, as those of you following us would know. We've had a lot of moving parts in form of establishing new financing facilities as well as the redemption of the DNO04 bond and as Sval DNO RBLs. These activities have been covered in previous presentations as they mostly relate to quarters 1 to 3, so I'll not dig into the details there. But on the back of these numbers, we're also very pleased to announce that the Board has decided a dividend distribution for the 15th consecutive year in a row. So that's very good news for our shareholders. Balance slide, please. Thank you.

You see the same effect here on the balance sheet. It's been a year of significant changes with much more assets, as you can see in the blue bar, balance sheet with a net debt position and a book equity supported by the hybrid bond. We still have a very solid and healthy balance sheet, well in compliance with all our bond covenants in addition to being a very strong basis for new potential M&A activities also with the financial toolbox we now have in place. So all in all, we have had a very strong quarter from DNO, -- no specific surprises or special items to take note of and not least a year with high activity, both operationally and on the business development side. So we're growing production in all 3 regions, and we are ready for an exciting year in 2026. So by that, I hand the word back to Jostein for the Q&A.

And I believe I should give some instructions while people are lining first up. [Operator Instructions]. So -- but first up is Teodor Sveen-Nilsen.

Congrats on a transformative 2025. A few questions for me. First, on the export in Kurdistan. You said that you expect exports during 2026. I just wonder how does it work? Are you able to join the current export deal? Or what do you need to see to put you in a place to join that export agreement? So that's the first question. Second question, that is on Tawke production. You mentioned 100,000 barrels per day. Could you share some more thoughts around the time line on that, when you will reach that or if it's already there? And final question, that is on 2026. Dividends, you talked about the 2025 dividends, but could you share some thoughts around 2026 dividends levels or whether that will be a percentage of cash flow or earnings or some other numbers? What we could expect for 2026 dividend would be useful.

Let me tackle the first and third questions, and I'll ask Chris to tackle the second one. On the first one, yes, of course, we can join the tripartite agreement any time we wish to do so. In a sense, we're partially doing that by the fact that, as Chris mentioned, that while we sell our oil on a cash and carry or deposit and bank account and carry basis, our oil does go into the pipeline. But we're not part of the agreement in the sense that we're not part of the review of the contracts by WoodMac as the other companies are and our payments again are made by our buyer and they're made in advance. So we have that certainty of payments, and we've been paid since the beginning of the opening of the pipeline, while the other participants had to wait some time to get paid, and they have a different arrangement.

But we can join that agreement at any time we want. And I think the other participants, both the companies, certainly [ Somo ] would like that to take place. We still don't know how the tripartite agreement is going to work. We don't know the time line of the WoodMac study. We don't know what the WoodMac study is studying and what it will say and how that will be processed by the [ Baghdad ] and when that is still going through a time taking process of government formation, how the new government in place will view the agreement and its terms, we don't know.

And when that will take place, we don't know. So our position is to wait and see what, in fact, that's going to look like and how that compares to the arrangement that we already have in place. That will take us probably until midyear, maybe it will drag on later depending on government formation. And by midyear, the existing pipeline agreement between Turkey and Iraq will expire, as you know. What will replace it? We don't know. And so that is another trigger for a decision by us as to what to do next. And of course, the tripartite agreement itself is constantly renewed. So there's uncertainty. And because we're making substantial investments in Kurdistan drilling and we're the only company doing it, we want to reduce that uncertainty as much as possible to be able to sustain our investments.

Other companies are not investing because they're not quite sure what comes next. They're getting some payments now as we understand it. But the fact that they're not investing suggests that there's uncertainty in their minds. We don't have that uncertainty under our arrangements, and we're investing. And when the -- some of the cloud over this disappears, we will have more wells, more production, more reserves under production, and we will gain the benefit of that at that time later this year.

But I expect that because of the changes that might come into play on the pipeline, the Iraq, Turkey pipeline, there may be other, again, ways that exports and export pricing will take place or because of a decision on our part once the uncertainty is removed to join or not join the tripartite agreement or have our own separate agreement with [ SOMO ]. That's a possibility as well that there will be the tripartite plus 1, much like OPEC+ 2 or 3, whatever OPEC+ is now. So that's another option, too. That's why we believe that in 2026, we will be either part of the export -- the current export arrangements or we will find another mechanism to be exposed to export pricing.

I think we're pretty certain that's our aim anyway to either export or have our pricing approach export and global prices. So that's the answer to the first question. On the issue of dividends, again, we've been paying dividends since August of 2022, regular dividends and rising dividends. and we're pleased to do that. Birgitte, you might say some words as to what cumulatively we've done in terms of return to shareholders. But before I turn to her to do that, I will also say that the matter of dividends distributions is one for the shareholders. And each year in June, we come back to the shareholders, and we make a proposal for dividend policy and dividend payments and the shareholders will make the determination as to what level and or what discretion to give the Board to make decisions about shareholders moving forward.

So we will make those recommendations for the next 12 months after our AGM. We'll make a recommendation to the shareholders. And ultimately, they will make the decision but we've established this record of shareholder returns and shareholders always vote in favor of dividends. So it's a question of what is a prudent level that allows us to continue this policy. And we've already signaled a number of times in the past several years that we've made this -- we've made prioritizing shareholder dividends an important part of the company. And of course, we've always prioritized our bondholders and have this incredible track record of over 2 decades of solid bond raises and solid bond returns. So this is not at the exclusion of bondholders, they are as much a stakeholder of DNO and have been for a long time as are our shareholders on the equity side.

Yes. My calculations are correct that we have paid $455 million in dividend and $60 million in share buyback after COVID. So that should total $515 million in distribution to our shareholders. So that's quite substantial.

And Chris, on 100,000 barrels a day in Kurdistan?

Thank you, Bijan. Yes, I just think it is a presentation of 500. So we're not just celebrating 500 million barrels but $500 million in shareholder distributions.

Excellent.

Thank you, Bijan. On the 100,000 target, great question. Just start by reminding everyone, as I did in my presentation of the incredible performance that we've achieved on the 2 fields in the [indiscernible] license in the last 2 years without drilling. We used to get questions pretty much every quarter about the decline rates of Tawke and Peshkabir when we were drilling, what was the underlying decline rate? We were asked time and time again. Well, it's quite amazing, isn't it? -- because we've had 2 years without drilling and we haven't had any decline.

Now I thank our team. They've done a brilliant job, but that obviously reflects on the quality of the assets underlying also. And that's what's given us the confidence to set ourselves this target of 100,000. And a key component of achieving that as we also wrote on the slide is that some of the wells we're going to drill are aiming to add reserves to what we already have booked on those fields. So that would be converting what's currently either in the contingent resource category or within the so-called 3P possible reserves into probable reserves and quickly into production.

So the time of that depends on the success of the drilling program, and we haven't guided on when -- we haven't -- we're not guiding the market on when we'll hit 100. What we are guiding on is the average this year for DNO share production of 65,000, which you can simply do the math and figure out that, that is 86,000 to 87,000 barrels a day gross on average this year. So you can do the simple math to see that the trajectory is upwards from this quarter. And we are working to hit 100 as soon as we possibly can. But what we're guiding the market is that figure.

Okay. With that, I believe [indiscernible] questions were answered. And we'll move on to another analyst, Tom Erik Kristiansen.

Congrats on last year. The performance in Norway particularly looks better than expected. Can you say anything more about how the portfolio has developed compared to your expectations in general and where is the upside being realized? And secondly, on the developments in Norway, you have focused of course, moving this forward at a higher pace than usual in this contract. What are the key drivers to achieve that? And is there also some corporate M&A aligning interests along with different blocks or discoveries would help in that regard?

Chris, do you want to put back on again, our expectations last year versus what it looks like today?

Do you have the slide there.

Yes, sorry.

Yes. Thank you for the question. So as -- and the slide I hope will be coming up shortly, but as our production projection slide shows, Tom, it was -- we've been very pleased. So we are upgrading our outlook for North Sea production just, what, 10 months after the announcement.

Now as we said in the -- I also mentioned in the slides, we have some 30 fields that we're now in. So it gets very long-winded if you go through all of the ups and downs. But clearly, the overall effect has been positive. I think on the production side, then the examples are [indiscernible] Brage, but they're all contributors. I don't want to spend too much time on that. I think really, when we're looking forward, what you see is this combination of the fast-tracking developments.

I mean Kjottkake discovered in the Q1 last year and coming on production in 2028. That is a fantastic driver not only of the production, but also value. And that's underpinning the mid-life of this particular chart. And then as we said in -- when we announced the deal as well, you have the big assets getting bigger effect as well. So we're in the Martin Linge, the [indiscernible] rigs and Brage evening as well, where -- which is a huge field, and we keep finding a bit more -- as we're hoping to do in [indiscernible] and Peshkabir, we keep finding a little bit on the edge of the field that's adding up to making quite a big difference.

So it's probably better to focus on those themes of turning the 2C into the -- turning the discoveries into 2C into 2P and the 2C that are in these big fields into 2P, and we're seeing positive developments on both of those fronts, and we're still working to achieve more. I'm glad you asked about the M&A because we announced -- we -- that's an important part of the -- not just the corporate strategy in terms of looking for more substantial M&A.

But it's going to be a big part of the toolbox we have in the North Sea as well is optimization M&A. And that's what you saw us announce a couple of deals on in Q4, and we are working on more of those. So we're trying to adjust our growth profile on the back of M&A as well and high grade the portfolio to get out more cash spinning off the asset base that we have.

Also on that point, I'll add that as we wrote in our press release today, 2026 could be a year of opportunity for us. The market is going to be nervous. We've already seen that because of geopolitical issues and trade issues and so on and the price of oil has been uncertain and it could go up, it could slide back down again depending on events outside of our control, but it is going to be a nervous year for oil markets and could be a difficult year for some companies, especially prices come back down again into the low 60s for Brent, perhaps even lower.

So there could be opportunities for us to move quickly to pick up assets. And we've said that this will be a 2026 is a nervous year because of uncertainty and maybe pressure on some companies because of oil prices, but that it will also be a risky year. There will be an opportunity and the DNO is a risky company. We can move quickly as we've demonstrated. Decision-making is rapid at DNO, and we're opportunistic. And we have a line of -- effectively a line of credit with the arrangements we have in place with ENGIE on our gas and also ExxonMobil and Shell on our oil. And we can tap into sale of those funds and other resources to move quickly to make acquisitions, and we're poised for that as well.

So we will be on the lookout and able to move quickly because of the way we're organized and because we have perhaps we're better positioned in terms of our balance sheet and our access to credit than other companies of our size or smaller or maybe even somewhat larger to move quickly to acquire opportunities if they fit and look attractive to us, primarily in the North Sea, but not limited to the North Sea.

Okay. Are you happy, Tom? It seems Teodor has a follow-up question.

Very happy. Just a short follow-up for me as well. Is it correct to assume that with those facilities you mentioned the cash on balance sheet and also, of course, some leverage capacity on assets you buy, especially if they are producing in the North Sea that you could do a deal of $2 billion, $3 billion without issuing any equity, if it's producing assets in the North Sea.

Do you think that's kind of a range of what you can take on right now without any equity issues? Or could you make some adjustments to that?

I don't want to comment on that because we don't know what those opportunities are. When I said that we can move fast on -- to acquire assets that are a bit more distressed, I had a smaller size assets in mind because of smaller companies. But there could be larger companies that may have want to divest from Norway or reduce their assets, and we'll be on the lookout for those. And I think we will be positioned and we'll have market support and to do acquisitions. We're not fearful of those acquisitions of that size. That's the small acquisition that we made was in that category, and we were able to execute and quickly.

And with that now under our belt, we are able to go even larger. So we are -- there are some assets we have -- we've been on our radar. But whether or not they become available opportunistically, I don't know. But my point was this will be a year, I think, of nervous market reactions to price movements, especially on the downside, and that could happen. But it could happen that prices will jump for some geological -- geopolitical reasons. But we're on the lookout, and we are open to doing those and certainly have the appetite and the wherewithal and the mindset, the mood and the emotional sort of riskiness. We want to do deals, we want to get bigger. So...

Sounds very good.

With that, I think Teodor Sveen will get the last question as there are no other people on the list now. So please, Teodor.

Actually, 2 new questions and follow-ups. You talked about exploration and definitely a [indiscernible] exploration prospects. I just wonder whether you can discuss the most promising ones or maybe pick up a couple of favorite wells. So that's the first question. The second one is on just the technicality on the Bestla reversal of impairment. I assume that forward curves on oil price is slightly down past year, but still you reversal of impairment. Could you just explain us the drivers behind that reversal?

Can maybe put up the exploration slide again. Thank you for the question. I hate to pick favorites as you know, because the implication for the other wells is what people take away. But I would just say that as -- Bijan has spoken about in previous quarters, as we have grown as a company, our ambition is actually to have a higher working interest in these opportunities. And because those are the ones that will really move the dot on -- for DNO.

And so when I look at that right-hand column, then you can see that if I were using that criteria as a favorite, then you would be looking at the ones where we are 30% or 20% rather than 10%, having said that, all of these investment decisions have come across my desk, and I wouldn't have been positive to them if I didn't think that they were going to add value to the shareholders. And of course, exploration is a funny game. Sometimes the one you're not expecting to come in comes in and the one you're banking on doesn't.

And we've all seen that many times over our career. So it's tough to figure out. I'm personally, I guess I'm very interested to see the appraisal results on Carmen and Norma. Those are 2 of the most exciting discoveries we made over the last few years and have substantial potential even [indiscernible] as well as being close to infrastructure. And when we talked about exploration strategy in the past, we've said, yes, we are close to infrastructure, ensuring we have rapid routes for commerciality. But we've also been looking for new play types in this new infrastructure area. [indiscernible] is an example of that to mention that one again. But Carmen and Norma also are in that category. And so they have a greater potential volume-wise than some of the others. But I don't just look at last year, when you were in Brage and you hit 10 million barrels, I mean, the value of that is tremendous because you can produce it next year. So yes, lots and lots of factors. I'm excited by the program is the way I'll finish that. The other question an impairment question, Birgitte.

Yes.

All I know as an engineer is that we have moved closer to the startup of ore production, so the NPV has gone up. Is that part of it?

Yes, that's part of it. The significant development work has been completed, including drilling of production wells. So we have a new assessment that led to a $30 million impairment reversal that is post tax. You asked about the input we use or the commodity prices we use. It's worth mentioning that there were some movements on commodity prices since we delivered our annual report or quarterly report for fourth quarter of '24 until we announced the acquisition of Sval. So the input in our impairment assessments will be different from '24 to when we did the Sval PPA, which was, I guess, in March, was before my time, but that's also worth mentioning.

So we haven't reduced our expectation when it comes to the input we use on the commodity prices since we -- since March, quite stable. And we follow our peers and the forward curve, as you mentioned also, Teodor. There's also a lot of details in the notes. We have at least one page, even more, I think, on Note 7 in the report. So there's also quite a lot of information. There you also find a table with a lot of details on each adjustment we have done in Q4 '25.

Okay. Have you increased any reserves or resources in the latest assessment?

Not reserves, I think, no.

That's no material change in the reserves. The wells have confirmed what we were expecting.

Jostein, would you put that exploration slide you just had on back on the screen, please? -- comments. And I'd point to 2 columns, both of which Chris has talked about. One is the DNO interest, which here we have this 10%, 15% interest and then the 30% interest. That shows the evolution of DNO as a North Sea player. When we returned to Norway several years now about 4, 5 years ago, we came in and started up as a pure exploration company. We took small interest or were awarded small interest in blocks and the target was to make discoveries.

As we've matured, -- we've now -- we're now taking a larger interest and being awarded larger interest in assets. And this is significant because as a larger company, then discoveries will be more meaningful for us. Plus with larger interest, we have the ability to farm down. And for example, then reduce our exposure in terms of CapEx. We don't want to do that, but at least with larger interest, we have the ability to sell down if that makes sense for whatever reason or combination reasons.

So that's been a change. And you'll see, again, that moving forward, our interests are going to be 30%, 40% in that range larger than was the case when we were a small exploration-only company with more limited resources and less of a track record. We've also added importantly this chance of commerciality.

The point isn't just to make discoveries, it's to make discoveries of commercial molecules, both oil and gas. And that's now a consideration as we decide which wells to drill. It's first, what is the geological chance of success. And the second is having made the discovery, how quickly can we bring it to market. And that better be under 5 years. It hopefully will become 2 to 3 years, and that's what we're targeting.

And that means we have to have discoveries made near infrastructure which we've been doing now for a number of years, but also that it's not just near infrastructure, but it's near accessible infrastructure that we are able to get into that infrastructure and to do all of this in very rapid time in terms of the time between discovery and production. So our business model has changed in that sense as we've matured. And you see that here, and you'll see it in successive quarters when we show these slides again that you'll see more wells that have high or medium to high chance of commerciality and where the DNO interest is larger, and that's -- that shows the evolution of DNO as a small exploration-focused company to a more mature company that focuses on exploration, but with access to infrastructure already, importantly, through the small acquisition of the small assets and the fact that, again, we are -- have this fast-track mentality and developing fast-track partnerships that you'll see us continue to mature and that will make us even more successful as a North Sea player than we have been because of exploration, will make us more successful because of development and then larger production volumes.

So I think you see this evolution in this slide, you'll see it further in the future quarters as well.

Well, then, ladies and gentlemen, that's a wrap. And thanks to all for participating, and see you again in a couple of months.

Thank you.

Thank you.

Good morning, and welcome to DNO's Third Quarter 2025 Earnings Call. My name is Jostein Løvås, and I'm the Communication Manager here at DNO. Present with me in Oslo on this morning this morning are Executive Chairman, Bijan Mossavar-Rahmani; Managing Director, Chris Spencer; and outgoing CFO, Haakon Sandborg. At first, Bijan will give an introduction. It will be followed by a presentation of the results. And after the presentation, we will open up for questions in our usual Q&A session. And as always, shareholders first, but analysts are also welcome to ask questions. will be dealt with afterwards. With that, I leave the stage to Bijan.

Thank you, and good morning, everyone. It's a pleasure to be back with you in all of these quarterly earnings calls or presentations. And we've had a very strong quarter, and we're going to be very pleased to report on it. And again, as Yos mentioned, answer as best we can any questions that you have. Before I start, I'd like to introduce to you. Haakon needs no introduction to many of you who followed the company. He has been the company's Chief Financial Officer for the past 24 years. He is, I think, not the oldest D&O employee, but the one who's been here the longest.

And he knows the company's history. He knows the company he's seen the company through many period ups and downs, the number of transformations over the past I think it's now 53 years of the company approaching 54. So as you know, as many of you may know that DNO has been Norway's oldest oil company, the first to be formed, the first to go on the Oslo Stock Exchange. And through much of that history, all of it and much of it, Haakon has been a major player in the company. We are -- he's decided to step down from his role. And it's been a privilege for all of us, myself, especially to have worked with him in that role. I've learned a lot from Haakon, a lot about the history of the company, and he's been a very valuable colleague to me and a leader one of the leaders of DNO throughout the period that I've been here and prior to my coming here as well. So we are sorry to see him go. We wish him well. He's probably best known outside of DNO for his -- as the person who initiated, led our very successful run on bond markets. That's not all he's done here. He's been involved on the stock side as well, the stock markets and shareholders and analysts, but he's perhaps best known for his stellar record of 21 successful bond raises over this period of time and he mentioned to me that he has raised through these bond raises over these periods, $5 billion, which is quite a large number for a company of our size. So thank you again, Hakan, for all of us. We wish you well, but I know Hakan wanted to have an opportunity to say goodbye to many of you who he's worked and stayed in touch. So I give the floor to Haakon to say those words to you.

Yes. Thank you. Thank you, Bijan. Thank you for those very kind words. Everything in life has its time. And I think now it's a good time for me to retire from D&O after 24 years in the company. It's also at the age of 67, it's also a good time to do something else and go on to new chapters in life is my thing. And looking back, it's been a great journey in many ways. And I'm very proud of all the growth we have achieved and the market value that we have built in the company during these years.

And I now wish all our -- all my colleagues and all our investors the best of luck and continued success and progress staying with DNO. And I'm very happy to hand over to our new CFO, Birgitte Johansen, now taking over after me. And I know she will be doing a very good job. So again, thank you, everybody, and best of luck.

Thank you very much. To continue, I would like to introduce Birgitte to you. We've already a notice about this transition. But I'll say a word about Birgitte. And of course, she will deal with the finance part of our presentation this morning and also moving forward. Birgitte Johansen has come to us from the shipping sector in Norway, the company reached Subsea, where she was the Chief Financial Officer, and we had a long search process, a deep search and we're able to persuade her to join the company, and she's hit the ground running. And we look forward to many, many years, maybe 24 years here at Vienna. I look forward to that Chris and the rest of us.

So welcome to the company. We had a very, very strong quarter in many respects. And my colleagues will have a chance to go into detail on those and I'll be available to add some color and answer questions. But I'm very proud of the performance of our teams, both in Kurdistan and in the North Sea. In Kurdistan, we've continued to ramp up production. When we last met a quarter ago, we were coming out of the period of damage to our surface facilities in Kurdistan, particular Keshkirir field, but we were able to ramp up production pretty quickly from 0 to I think we had -- we hit 55,000 barrels a day between Etawke and Feshkir fields in our last quarterly presentation.

And I indicated to our team, I was in Kurdistan, I said we're going to have our quarterly presentation. I want to have -- hit the 55,000 barrels a day figure. We go to announce that when we meet in Oslo, and they jumped to the challenge, and we were able to do that. For this quarter, we challenged them again. I said when I had the presentation on the 6th of November in Oslo. I want to be able to announce that we've hit 80,000 barrels a day of production, so up from 55,000, which is up from 0 and 80,000 was where we were before the drone strikes and the damage to the fields.

And I'm very pleased to say that we've -- that team has hit the 80,000 barrel a day figure, and Chris will go the details as some more specifics about that. So I'm very, very proud of that team, and they do a terrific job. What DNO does and has done in Kurdistan, no other company has even come close. And we're very proud of that record and proud of the performance of that team. In the North Sea, we also have a fantastic team. We've announced today as part of our release, and then we'll go into the detail on the slides about how our team in the North Sea now is similarly getting off the sofa and developing -- being to develop the extensive discoveries that the company has made in the Norwegian continental shelf.

And again, Chris will go into some details on our joint efforts with a like-minded company, Aker BP with respect to one of our discoveries, the Sotaka discovery. And we're very pleased. And again, we expect to bring that field on production to develop it in record time. We don't do it as fast in Norway as we do in Kurdistan for many reasons. Most importantly, in Kurdistan, we're onshore and the lead times are much smaller than they are with an offshore project, but we hope to be also do in Norway, what we've done uniquely well in Kurdistan.

I expect our next quarter will be even stronger than this quarter and that it will reflect some of the recent developments. And I look forward to meeting again with you for our first quarter -- fourth quarter 2025 presentation in 2016. But before then, I'll turn first to Chris to go over our operational performance this past quarter with a bit of a look ahead as well.

Thank you, Vijay, and good morning from... So we now have our transformational quarter on the back of our transformational acquisition. So we were highly expected following the hugely important acquisition of Sar Energy back in -- which completed in June. And this is the first quarter that you see the full effect of that acquisition and that runs through all of the numbers that I'll be covering and really will be coming into on the financials. And of course, immediate visual impact on the production.

We are now up to 115,000 barrels of oil today during Q3 and actually, Q3 will be a relatively weak quarter on the production front, both in the North Sea due to the summer maintenance season, but also in the Kurdistan region because of the -- we were recovering from the grow attacks as Bijan has described. Similarly, the revenue follows the production, obviously, and even more so for us because the soil acquisition, of course, is in the North Sea, where we have full exposure to global oil and gas pricing. We got back into the black with a $20 million profit.

And then operationally, we continue to have successfully drilled it. And as we'll go into in some detail, we are now making great strides in terms of monetizing discovered barrels at a record pace in the North Sea. Happily, all of this allows us to continue making our shareholder distributions the way we've been doing for some years now and the increased -- increase in the quarterly dividend payment that we announced last quarter is maintained. If we go to the next slide then. please, I think that I hope that this slide sets the tone for many quarters ahead in our North Sea.

We talked about this on the back of the acquisition of Swab that we're taking a huge step up in the North Sea, and we are determined to not only maintain but grow our production in the North Sea over the next few years. And we will be doing that by continuing to explore -- and we've got 3 wells running at the moment and importantly, accelerating the development of discoveries into production. At the same time, we're going to be high grading and optimizing the portfolio we have and that is a great example of that in the bullet points here where we've done a nice swap transaction with Aker BP.

Both companies are very happy with it. For us, we are strengthening in our core area around the Nora FPSO up in the Norwegian Sea and increasing our share of the Mede field, which is tied back to Nora. Both of the projects that are coming on in the Ganbara1 and Medande are up in that area. And so the Nora area is going to have 800 barrels of oil equivalent contribution just from those 2 projects by the year-end. In exchange, of course, we handed over some assets. And again, is a tieback to Alvheim. So that's a core area for Aker BP noncore for us. So a nice rationalization for both companies. Lastly, here are the final pieces of the financing on the back of the transaction being put in place.

We were very pleased to announce the gas offtake agreement we had with associated financing last quarter, and we are copying that now on the oil side. Not quite -- isn't quite dry on the signatures here. So we can't give full details, but we're confident these will be in place very shortly. and well ahead of the 1st of January date when those sales will commence. And again, there's the prefinancing on sales similar to the gas arrangement at very attractive interest rates way below the type of interest rates you see on our bonds.

So we will have once these 2 deals are completed, facilities of over $900 million on the prefinancing associated with oil and gas -- oil liquids and gas sales in the North Sea. If we move to the next slide, -- then this obviously is a key component now of our engine room for value creation in the North Sea. So we're going to continue to discover resources and then we are going to bring them on very rapidly.

As Bijan mentioned over the past few months in the North Sea, we need to find like-minded partners or like-minded companies to be able to do this together. It's -- and we're very pleased to be collaborating very closely with Aker BP here to make Sökaka very fast in Norwegian continental shelf terms development going from discovery in Q1 of this year to production starting in Q1 of 2028, which is obviously 3 years.

And that compares to 6 years or so as the average for subsea tiebacks that have been brought on stream so far this decade according to the data we have. So that underlines the acceleration that we are going to achieve together with ABP and Kino here. And indeed, the operator of the host that we'll be getting tie into, which is more energy over at. So we're very excited for that, and we are determined that this won't be a one-off. We will be discovering hydrocarbons, working with license partners to develop this sort of speed. And as we move forward, we're aiming to improve this further.

We see internationally that, that is possible. and we're setting the bar very high for ourselves. For investors, why should you care? It's not just fun to accelerate developments, but obviously, in terms of the net present value on the original investment in exploration, it's quite transformational on the return on capital invested when you can reduce the time from discovery to production by 50%. And that, of course, is the value proposition behind the whole exercise.

Next slide please. This is in the front end of that funnel. We've had an exciting exploration program this year. This, of course, is reflecting both the portfolios of DMO and S as they were as we enter 2025. And we've got results for 3 wells coming up very, very soon. And we have an exciting program ahead of us next year. In fact, we have a luxury problem of probably too many opportunities next year that we are working to high grade.

Next slide. Turning to Kurdistan and touched on it, but we've been ramping up production here and -- the Q3 numbers are still, of course, impacted by the terrible experience we went through in mid-July, where we were hit by drones and that caused damage to critical processing equipment at the Peshkabir field, having rushed ourselves down over a couple of weeks, put in place new security protocols to protect our staff and so forth. The team got back to what they do best, and that is overcome challenges in an amazingly speedy fashion.

And so within 3 months of the attack, we had replaced the damaged processing equipment by repurposing some redundant equipment we had over at the Tawke field and got back up to 75,000 barrels earlier this month. We, actually, sorry, mid-October. And then as BJ has announced this morning, they've pushed it even further, and we're back to the 80,000 mark as we speak. Of course, the big event in the quarter for Kurdistan oil and gas business in general was finally the reopening of the export pipeline through Turkiye to Cihan.

That was after 2.5 year closure during which the entire industry, as you know, has been selling locally. from our side, we've been -- as we've been talking about quarter after quarter, we've not been drilling in Kurdistan to properly manage our reservoirs, and we need to get back to drilling and increase the production again. And so that means we are moving into a period of higher investment again in the Tawke PSC. And for us, therefore, the certainty of payment is even more important than it has been in the past.

And that has pushed us to lean on continuing to sell our oil to local buyers. The other element with respect to restarting exports that was not addressed in the agreements that other companies have signed up to is also the significant debt that the Kan regional government still has outstanding with us, and we continue to look for ways to resolve that with the KRG. So we're very pleased that exports have restarted. We're also very pleased to have the certainty of payment that we have with our arrangements. And on the back of that, we will be ramping up our investment, and we set another hay target for our team.

We're going to get to 100,000 barrels -- back to 100,000 barrels gross through restarting drilling on the -- and as BJ commented in September, we may look back a year from now and feel we have left a little bit of money on the table with respect to exports, but the value creation from getting back to drilling and pushing the production up will exceed that in our view. With that, I've done my operational update, and I will hand over for the first time to Birgitte for the quick run through of the financials. Over to you, Birgitte. Thank you.

Thank you very much, Chris, and good morning to everyone. As Chris and Ben mentioned, we present a strong quarter where we now see the full effects from the Sval acquisition, which was completed in mid-June this year. So let's jump right into the financials and the details. Starting with the income statement. The strong contribution from Sval Energy, now included in DNO's North Sea business units is clearly visible. Revenue was NOK 547 million, up 112% from the last quarter.

As much as 92% of the group's revenue in the third quarter came from the North Sea business compared to 65% in 3Q '24. Our operating expenses have increased following the inclusion of SVA, which is natural, and operating profit ended at NOK 222 million, up more than 100% from the last quarter. Net profit in 3Q back in black, as Chris mentioned, at USD 20 million.

Next slide, please. So let's move to -- let's move to the cash flow. Yes. Thank you, Jin. The high revenues led to a near threefold increase in cash flow from operations to a high level of NOK 407 million in Q3, up from NOK 135 million in Q2. This Q3 cash flow includes NOK 53 million in positive working capital changes. Stronger earnings in the North Sea also means higher taxes, and we paid 2 tax installments in Norway, totaling $53 million in Q3. As you may recall, we indicated last quarter cash taxes of around $150 million in the second half of '25.

The cash tax will increase in the fourth quarter. We again had substantial investments at $225 million in Q3, consisting of NOK 183 million in CapEx, mainly for North Sea development projects and also NOK $34 million in exploration expenditures. We also spent $10 million on Dom in this quarter. Net finance outflow of $386 million primarily covers repayment of $300 million bank bridge loan that was part of our acquisition financing for Sval Energy. We also paid a dividend of NOK 36 million in Q3, as you know.

So with the investments of NOK 225 million and NOK 300 million in debt repayment, our cash balances were reduced by NOK 257 million to NOK 531 million at the end of 3Q. But again, the key takeaway here is the very substantial increase in our operational cash flow from the first full quarter with the SA assets in operation. Next slide, please. Now as discussed in DNO's Q2 presentation, our balance sheet and capital structure were substantially changed through the SAL acquisition and related financing transactions.

Compared with the Q3 last year, we now have quite diversified funding sources with a good combination of long-term bonds and short- and medium-term offtake financing. The size of the balance sheet, thereby increased by close to 70% in Q2, primarily through higher property, plant and equipment values as PP&E was up by 135% in the second quarter, as you can see on the slide. For Q3, the PPE value remains fairly stable from Q2 as expected. Similarly, we went from a net cash position in Q1 to a net debt of NOK 860 million in Q2, whereas we now show a reduction in the net debt in the third quarter.

The key driver for the reduced net debt is close to NOK 100 million in free cash flow, partly offset by the dividends paid. Total equity increased with the NOK 400 million hybrid bond that we placed in Q2, and this metric also remained stable in Q3. All in all, it's a very strong quarter from DNO, no surprises or special items. So by that, I hand the word back to you, Jostein, for the Q&A session.

Thank you, Birgitte. That a good run through, and we'll take questions now. here. Nicolas is with us. Nicolas -- congrats on the very strong quarter. And congratulations for a long and rewarding career with the company. And thank you for the engagement with the sell side this year. So I want to wish you all the best in your next step in life. So I've got 3 questions to ask, please. The first one is about Kurdistan. And the other one in kind of like on the balance sheet.

So in Kurdistan, if you're ramping up production, drilling was there, but then you sell them locally and someone else is making this kind of like crazy sort of like margins on the exports. I'm just wondering what is the incentive from the KRG to make a deal with you in order for you to kind of like sell the crude directly. So that's kind of like the first question. And if you can talk about how the negotiations there are going, that will be good.

And then on the Sal assets and in general, the North Sea kind of like outlook, you've got these assets for a few months now, would you be able to give us maybe a production target for '26 and 2027 in the North Sea? And then finally, on the balance sheet, -- you have been quite conservative in the past few years. I mean, obviously, that was because of Kurdistan. Now that you have repositioned the business in the North Sea, how do you think about the balance sheet going forward? And more specifically, is there an optimal level of debt or leverage you guys target?

Let me try to answer the question on Kurdistan. I'm not sure I fully understood it. You mentioned something crazy margins and some other things. I'm not quite sure I understood it or I understand what you understand we've done. What we decided to do was to continue selling our entitlement crude to the buyer who have been the buyers who have been buying our crude at the same prices more or less as prior to the exports. The amount that we receive, again, is the same under the same mechanism when we are prepaid, we're paid in advance by these buyers and we deliver the oil to them. In the past, these buyers have sold the oil into the local market.

We're not -- we don't follow exactly who that oil is sold to and on what basis, but we continue -- we had an existing contract with them, and we elected to continue that -- those arrangements. Our buyers have made their own arrangements as they had done previously to sell that oil. But this time, they've sold the oil onward into the pipeline that oil as we understand it, is exported with all the other oil from Kurdistan, whether it's produced by the other IOCs or other, what terms they have set into place with Kurdistan, we don't know.

All we know is we continue to be paid in advance and at the price that's known to us, it's predictable. There are no delays. There's no calculation of price by an outside consultant. There are no issues we have about delay in payments and where those payments come from. We decided that we were better placed to continue to receive money in advance at predictable and set prices that we would be under the terms of the export that other companies have elected.

This is important to us because we -- this allowed us and allows us now to make these very substantial investments, including the drilling of 8 wells next year, which will start right away. We signed up a contract for a drilling rig. We're going to be deploying our own rig. And as Chris says, we believe that the investments we're making and the increased production that we will get from these investments will more than offset any money that we might end up leaving on the table. It's possible.

We know that there is a formula. Everyone knows that there's a mechanism that the companies get paid, hopefully, by December, $16 a barrel, less I think an estimated average $2 in transportation fees, that's $14 to then be supplemented at some point next year by additional monies to be calculated based on an outside consultant retained by the Iraqi government coming in and saying what the contractual number should be based on some other principles fairness or otherwise that we're not privy to. It's possible that as we participated in this, we would eventually receive more than we're receiving now.

We have announced what we're getting. We're getting paid per barrel payment of the low $30 a barrel for every barrel that we are putting selling based on our entitlement, which is now roughly, I think, 20,000 barrels a day with our share, we get paid in advance, and we are happy with that arrangement. Now perhaps if we participated in the export pipeline project, this number would have been higher. That's quite possible. And as we said last quarter and as Chris again said, we may looking back, see that we left some money on the table.

Maybe we will have left some money on the table and maybe we won't have left money on the table. We don't know. But we thought that the predictable receipt of money would allow us to ramp up production. As I said, we've now ramped it up based on this thinking from 0 when we were -- just after we were hit by the drones to 55,000 3 months ago to 80,000 now and to 100,000 at some point next year. I think this is best for us. It's best for Kurdistan.

It's best for Iraq since they're selling the oil. I think it's a win-win-win situation. If we find that the -- as we've ramped up production, that the terms and conditions and payments for the export arrangements are attractive that they continue beyond the end of this year. My understanding is that these arrangements were done until the end of this year and don't have to continue. There's an election in Iraq. There will be elections in Kurdistan. There'll be changes perhaps to conditions, we'll see.

If we find that those terms are attractive to us, we will participate in exports. If we find that the current arrangements give us predictability, we will stay with our current arrangements. And hopefully, we'll be able to ramp up our prices. Already, our prices for our sales -- local sales as we call them, in November are higher than they were in October when we started, and we expect those prices will continue to rise. So we're happy with it, this arrangement, and we're happy to be drilling again. We're happy to be producing larger volumes.

As I've said, DNO is great at this. And we have great fields, we have great people, and we're able to deploy $1 and get more value for it than other companies have. So we're very pleased with the way things are progressing. We hope exports will continue. We wish everyone well as part of the export scheme and their success will eventually be our success as we'll participate in exports and some other arrangements that we might make ourselves. But in the meantime, we are investing in Kurdistan. We're the only company doing drilling and planning to drill as many wells as we are.

And that's what we've always been. We've been the largest producer, the fastest mover. We've said this before, sometime before the end of this year, we will produce our 500 million barrel of oil from T license. That's a great achievement for us. It's been great for Kurdistan. And it's a record we want to improve on. And I think we're set well to do that. On the issue of what our North Sea production is going to be, I'll ask Chris to refer to that, but we haven't given that sort of longer-term guidance because our situation changes as much as it does.

Historically, that's been the case in Kurdistan, but even the North Sea, a year ago, who would have thought that our production in the North Sea would quadruple, which it has for a small acquisition. And we shared with you our plans to fast track production. We've shared with you our record of discoveries, which has been quite significant. And you know from us, what we've been saying for quite some time and again repeat it today that we're going to fast track the monetization of our discoveries by bringing them into production quicker.

So you can do some back of the envelope calculations. We are still on the lookout as we've been for some time for additional acquisition of additional production. We will ramp up production from our own discoveries, and we have long pipeline discoveries, but be on the lookout to do swaps and as we've announced again and to acquire bolt-on acquisitions, smaller ones. We've been doing some of those in the past that we reported and maybe more significant acquisition as well. Our ambitions for the North Sea are as large as our ambitions have been for Kurdistan. That I can say with some confidence. But Chris, would you like to?

I think that's a good summary. We think that we have mentioned in our material this quarter that -- and as I said in my remarks that Q3 was impacted by the summer maintenance season and so forth, and we indicated an exit rate in the North Sea of 90,000 barrels of oil equivalent per day roughly. And that gives obviously a good sense, we feel of the scale of the business we have there. We've put -- and we've made similar comments in several presentations since we completed the acquisition. So yes, we feel we've given a good indication of what you can expect from the North Sea business.

And then with the comments that Ben has made and mine earlier, we're trying to help the market understand how we are planning to generate a lot of value out of this new portfolio that we have. We've used the term repeatedly, but the 2 portfolios went together like a hand in glove. -- with the production strong portfolio of Sal with combining with the exploration and development strong portfolio of D&O. And that's -- again, I think Shekaka is just the first example of that, where Sal have an increased -- a much stronger presence in the hosts and potential pieces of infrastructure that could be relevant for Shaka development.

We made the discovery, and that is going to be on stream in early 2028. This is something, as I mentioned earlier, we are going to be working hard to replicate. Not forgetting in the backbone that will maintain production as well is the type of legacy assets we have the area, which came with Swell is everyone who follows the Norwegian Continental Shelf Ecovis goes on and on, that type of asset, Martin Ling, the Braga asset from the D&O portfolio, these also will provide a tremendous core of long-term production to which we're adding this machine of explore, develop to create value for the shareholders. So I hope that gives you enough color on what we're aiming to achieve in the North Sea.

On your other question about our balance sheet, let me say the following. Yes, you're right. We've been conservative. And we will continue to be conservative. We're not going to bet the company on anything. Part of that's been driven, as you said, by Kurdistan because of the movements up and down in payments in the past and other challenges. But that wasn't just about Kurdistan. It's not just about being conservative. The Kurdistan part is being prudent. I think generally, we're conservative in how we think about the business. But we've also been opportunistic.

We built out large cash reserves, and we're looking for an acquisition several years ago, and we're able to deploy those cash -- additional cash through the acquisition of Ferro. We then start building up again our cash position, looking for another larger opportunity, and we used it in part to finance the acquisition of SL. Right now, as we reported, we have something in excess of $500 million in cash on the balance sheet. We have $900 million in total availability of prefinancing. We've drawn down, I think, $340 million of that.

Again, as part of the small transaction, the repayment of our debt, which Rit discussed, that we have another significant amount of money available to us if and when we need it, either for an acquisition or for some other purpose. So we build up these cash reserves. We'd like to always have a significant amount of cash on the balance sheet. both because of the ups and downs of the market and the price of oil goes up and down, and we want to be prudent and in a position to continue to pay dividends to our shareholders.

We continue to service our bond debt, which we've done now for 22 years and quite successfully. We're proud of that record. And our investors on the equity side or the debt side are really important to us, our credibility and our good to perform is really important. So in that sense, too, we're conservative. Not all companies have these sort of targets of continuing to pay dividends and continue to service the debt we do.

And for that, we need to have enough cash on the bank and be prudent and be conservative. And we're proud of that, but we do build up cash and we do look for opportunities. And we'll grab those when we can. We don't have a specific sort of target figure other than whatever is prudent and conservative and opportunistic, we will -- that will drive our thinking and our...

Next one up is another analyst...

A few questions from me. First, on Take, congrats on reaching the 80,000 barrels per day target. Regarding the 100,000 barrels per day, how should we think around timing of that and also potentially the duration that should we like expect 100,000 barrels per day flat out for entire 2026? Or should we factor in a lower average production for next year? Second question, that is just following up on the export potential.

As far as I understand, you now sell at local prices in K, how does the route to export prices look like? Is it only a deal around the receivables that is between us now and you getting international oil prices? Or are there any other outstanding issues? And my third question is for guidance 2025. In your second quarter report, you gave some guidance on operational spend and CapEx for the Norwegian portfolio. I didn't see that in the Q3 report, you just confirm that, that guidance is still valid.

Thank you. I was amused when you and your back and forth about unmuting who's ever muted -- but thank you for your question. You always have interesting and important questions. The easiest one is on 100,000 barrel target. For us to get from 80,000 to 100,000, that's about 5,000 additional barrels a quarter. That's not difficult for us. We were over 100,000 barrels a day, if you recall, before the pipeline was shut in 2.5 years ago. So we know how to get there. As you know that in the 2.5 years or so that we weren't drilling any new wells, we were still able to maintain production. by tweaking the wells and by doing workovers.

And we really -- our tracked production team in really learned so much about the Tawke field and about the wells and how to with minimum amounts of spend and effort to keep those wells flowing. And this is really quite spectacular because as we've discussed many times in the past, these fields typically, these reservoirs have a 15%, 20% decline rate. How we were able to stop that decline rate without drilling any new wells is, again, an amazing achievement, but it speaks to the 20 years or so of DNO working in that field and learning how to optimize it.

So with that base, knowledge and understanding. And they've already -- during this period, they've located other wells they want to drill other location, some of them are production wells, some of them are a bit of a step out and 1 or 2 of them have an exploration component that's quite exciting. And we're going to drill into those in 2026. When we're going to hit 100,000 a day, the target we set for them is towards the end of the next year, but they've surprised us pleasantly every time we set targets for them, they achieved those targets and achieved in record time.

So I wouldn't be surprised if we once again beat those targets. But let's give them a chance to do what they do very well as they get going. And as I said, we're bringing a rig back in again, and that's going to drill the deeper wells. Our own Cindy rig, which has been doing all the work over in the last couple of years, we'll focus on some of the shallower targets that we have in the J shallower horizon in the field. So we'll get to 100,000. We'll get to 100,000, we'll set new targets and see if we can achieve that. It will get harder over time.

But if we drill 1 or 2 of these exploration wells are successful, we can have a step-up in production from the 2 fields. But give us a chance to do it. And our history is a good predictor of our future, certainly in the. On exports, how would we participate in exports, if it looks like the payments are greater than we can get in the local market. That's a good question. There are several avenues to that, that we were considering. We can sell our entitlement oil to whoever we want to sell it to for our production sharing contracts. It was helpful for everyone for us to have this 3-way arrangement between ourselves local buyers and Kurdistan and Iraq for our oil to be sold under arrangements we were comfortable with, but find its way into the pipeline.

And again, that DNO is 80,000 barrels a day, a very substantial part of the total production of Kurdistan. And without it, the pipeline project wouldn't have worked. So we didn't want to block the export project. That's an important project for many stakeholders. But we just want to make sure we were getting paid $30 or low 30s before we put the oil into the pipeline, then be paid maybe $14, $12, $14, maybe sometime in December to be topped off maybe sometime in the future or reduced maybe sometime in the future, depending on what an outside consultant would decide it would be a fair price or a price that was somehow acceptable to other companies.

That uncertainty, we didn't want to live with. And we believe that by, again, selling in the low 30s and getting paid in advance, we can invest and get more production and more revenue to offset any money we leave on the table, but there are several ways to get there. And because we're not signed up into the larger project, we have our rights under our PSC to sell the oil. wherever is the best buyer from our point of view in terms of pricing and payment terms of that oil. And we had said in all the companies that said that we would not participate in exports unless the arrears was resolved.

We've kept to that. Our arrears are important for the other companies, maybe the arrears were less that we know there were less, our areas were the greatest. And we said consistently that we will not participate in that export project until our arrears were addressed. So we get comfort that we would receive those arrears. We have different mechanisms to achieve that and none that have been finalized that we can announce now. But we will get our arrears back one way or the other as happened in the previous time we built up even much larger arrears during the ISIS period, you remember that period well.

They've always been good for all of the contracts eventually. We understand sometimes other squeezes, we work with them, but we expect one way or another and there are different ways of doing this. We will get the ears paid. And at some point, we hope to participate in exports. If not in the next few months, the export agreements between Iraq and Turkey expire in July. We don't know what -- how that pipeline will be used by whom and under what terms and conditions. But things will change in July.

And we haven't been participating in the export directly now. Perhaps from July, there will be other opportunities for us to participate in a different way in an export project. and we're comfortable with that decision. And we have the cash to drill wells to raise production. So all that is, I think, on track as far as DNO is concerned.

Time flies when you're having fun. We're approaching the 1-hour mark. And unless there are any more questions from the audience, I think we'll wrap it up. And thanks for listening in, and see you around soon.