DNO (DNO) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of Sval Energi provides a rare opportunity to acquire high-quality, cash-generative assets on the Norwegian Continental Shelf, significantly increasing scale, production, and diversification.

• Boosts global production by two thirds to around 140,000 boepd and 2P reserves by 50% to 423 million boe, with North Sea production quadrupling to 80,000 boepd.

• Sval Energi's portfolio is highly complementary, offering interests in 16 producing fields, hubs, tiebacks, and extensive development opportunities.

• The deal is transformational, positioning the company as a major North Sea player and rebalancing exposure between Kurdistan and Norway.

• Strategic focus remains on Norway, with further growth through organic exploration and future acquisitions.

Financial terms and conditions

• Acquisition price is USD 1.6 billion, with USD 450 million cash for 100% of Sval Energi Group AS shares, financed through existing cash, new bond and RBL debt, and offtake-based financing.

• DNO held USD 900 million in cash at year-end 2024, with an additional USD 100 million liquidity under its RBL facility.

• Capital structure will be optimized prior to deal completion.

• The company is moving from a net cash to a net debt position, but expects the acquired assets to generate significant cash flow.

• The acquisition was agreed at a full and fair price, reflecting the current asset mix.

Synergies and expected cost savings

• Financial synergies include tax optimization, G&A savings, and lower cost of capital due to increased scale and North Sea weighting.

• Operational synergies arise from overlapping core areas, shared infrastructure, and the ability to accelerate development of contingent resources.

• Sval Energi's portfolio is highly cash generative with low production costs (USD 14/boe) and limited near-term investments.