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1. Company Snapshot

1.a. Company Description

DNO ASA engages in the exploration, development, and production of oil and gas assets in the Middle East and the North Sea.Its flagship project is the Tawke field that is located in the Kurdistan region of Iraq.As of December 31, 2021, its proven reserves consisted of 196.1 million barrels of oil equivalent (MMboe); proven and probable reserves included 321.4 MMboe; and proven, probable, and possible reserves consisted of 420.6 MMboe.


The company was incorporated in 1971 and is headquartered in Oslo, Norway.

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1.b. Last Insights on DNO

The recent 3-month performance of DNO ASA was negatively impacted by the company's decision to take non-cash impairments of USD 146 million in its accounts, resulting in an operating profit drop to USD 6 million. Additionally, the company's acquisition of Sval Energi in a transformative transaction, although expected to quadruple North Sea output, may have created integration challenges and distracted from short-term performance. Furthermore, the company's decision to redeem its bond DNO04, with a redemption price of 102.3625%, may have resulted in a significant cash outflow, potentially affecting the company's liquidity position.

1.c. Company Highlights

2. DNO's Strong Q3 2025 Earnings: A Turning Point in Production and Profitability

DNO reported a significant improvement in its financial performance for the third quarter of 2025, driven by a substantial increase in production and the acquisition of Sval Energi in June. Revenue surged to $547 million, a 112% increase from the previous quarter, resulting in a net profit of $20 million. Earnings per share (EPS) came in at $0.1997, beating analyst estimates of $0.115. The company's operating profit was $222 million, more than doubling from the previous quarter. The cash flow from operations nearly tripled to $407 million, underscoring the strength of DNO's operational performance.

Publication Date: Nov -17

📋 Highlights
  • Profitability & Production Growth:: DNO returned to profitability with $20M net profit and 115,000 BOE/day production, driven by Sval Energi acquisition.
  • Kurdistan Production Recovery:: Output surged to 80,000 BPD (up 45% QoQ) post-drone strike disruptions, showing operational resilience.
  • North Sea Accelerated Development:: 50% faster discovery-to-production timelines with Kjøttkake project, boosting ROCI efficiency.
  • Revenue Surge:: Q3 revenue hit $547M (+112% QoQ) as North Sea contribution rose to 92% of total revenue from 65% YoY.

Operational Highlights

The company's production reached 115,000 barrels of oil equivalent per day, driven by the ramp-up in Kurdistan to 80,000 barrels per day and the contribution from the North Sea assets following the Sval Energi acquisition. In Kurdistan, DNO successfully overcame production challenges, including drone strikes in July, and is targeting 100,000 barrels per day next year. The North Sea business is also gaining momentum, with DNO accelerating the development of discoveries, including the Kjøttkake discovery, in partnership with Aker BP.

Financial Position and Guidance

DNO's financial position remains robust, with a cash balance of $531 million and over $900 million in prefinancing associated with oil and gas sales in the North Sea. The company maintained its quarterly dividend payment, which was increased last quarter, and is prioritizing debt servicing and building cash reserves. The guidance provided in the Q2 report for operational spend and CapEx for the Norwegian portfolio remains valid, and DNO is confident in its ability to resolve arrears issues in Kurdistan.

Valuation and Outlook

With a P/E Ratio of -16.58 and a P/S Ratio of 1.87, DNO's valuation reflects the challenges and opportunities in the energy sector. Analysts estimate revenue growth of 46.6% for next year, driven by increasing production. The company's focus on fast-tracking production from discoveries and exploring bolt-on acquisitions positions it for potential long-term growth. The dividend yield of 8.98% is also attractive, providing a return to shareholders amidst the company's efforts to improve profitability.

3. NewsRoom

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European Growth Companies With Insider Ownership Up To 28%

Nov -25

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DNO Continues to Highgrade North Sea Portfolio

Nov -18

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DNO (OB:DNO): Valuation in Focus Following Strategic Deals, Production Upgrade, and Dividend Announcement

Nov -16

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DNO Shares Traded Ex-Dividend

Nov -13

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DNO Posts Solid Third Quarter Results; Launches Fast-Track Kjøttkake Tie-Back

Nov -06

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Key Information Relating to Cash Dividend

Nov -06

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DNO Reports Multi-Asset Swap with Aker BP

Nov -05

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European Growth Companies With High Insider Ownership In October 2025

Oct -24

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.75%)

6. Segments

Oil

Expected Growth: 4.73%

DNO ASA's 4.73% growth in oil segment is driven by increasing production from Kurdistan Region of Iraq, successful drilling campaigns, and improved oil prices. Additionally, the company's focus on cost optimization, efficient operations, and strategic acquisitions have contributed to the growth. Furthermore, DNO ASA's strong balance sheet and cash flow generation have enabled the company to invest in growth opportunities, supporting its expansion plans.

Gas

Expected Growth: 4.83%

DNO ASA's 4.83% growth in Gas segment is driven by increasing demand from industrial and power generation customers, coupled with strategic acquisitions and investments in exploration and production activities. Additionally, favorable government policies and regulations supporting the energy transition have contributed to the growth.

Natural Gas Liquids

Expected Growth: 4.65%

DNO ASA's Natural Gas Liquids segment growth of 4.65% is driven by increasing demand from the petrochemical industry, improved operational efficiency, and strategic investments in exploration and production. Additionally, favorable government policies and rising global energy demand contribute to the segment's growth.

Tariff

Expected Growth: 4.73%

The 4.73% growth in tariffs from DNO ASA is driven by increasing electricity demand, grid expansion, and investment in renewable energy sources. Additionally, regulatory changes and inflationary pressures contribute to the growth. Furthermore, DNO ASA's focus on grid modernization and digitalization also supports the tariff growth.

7. Detailed Products

Grid Operations

DNO ASA provides grid operations services, ensuring the reliable and efficient transmission and distribution of electricity to households and businesses.

Renewable Energy

DNO ASA offers renewable energy solutions, including wind, hydro, and solar power, to reduce carbon emissions and promote sustainable energy production.

Energy Storage

DNO ASA provides energy storage solutions, enabling the efficient storage and release of energy to meet peak demand and stabilize the grid.

Smart Grid Solutions

DNO ASA offers smart grid solutions, leveraging advanced technologies to optimize energy distribution, reduce energy losses, and improve grid resilience.

Electric Vehicle Charging

DNO ASA provides electric vehicle charging infrastructure, supporting the transition to electric transportation and reducing greenhouse gas emissions.

Energy Efficiency

DNO ASA offers energy efficiency solutions, helping customers reduce energy consumption and lower their carbon footprint.

8. DNO ASA's Porter Forces

Forces Ranking

Threat Of Substitutes

DNO ASA operates in the oil and gas industry, where substitutes are limited. However, the increasing focus on renewable energy sources could pose a threat to the company's operations.

Bargaining Power Of Customers

DNO ASA's customers are primarily governments and national oil companies, which have limited bargaining power due to their dependence on the company's oil and gas production.

Bargaining Power Of Suppliers

DNO ASA relies on a few large suppliers for its operations, which gives them some bargaining power. However, the company's size and scale of operations mitigate this risk.

Threat Of New Entrants

The oil and gas industry has high barriers to entry, including significant capital requirements and regulatory hurdles, which limits the threat of new entrants.

Intensity Of Rivalry

The oil and gas industry is highly competitive, with many established players competing for market share and resources. DNO ASA faces intense rivalry from other companies operating in the region.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 31.80%
Debt Cost 12.65%
Equity Weight 68.20%
Equity Cost 12.65%
WACC 12.65%
Leverage 46.63%

11. Quality Control: DNO ASA passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

15.2$

Current Price

15.2$

Potential

-0.00%

Expected Cash-Flows