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    DNO (OB:DNO): Assessing Valuation as Tawke Drilling Resumes After Major Production Milestone

    Simply Wall St·12/15/2025 19:22:56
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    DNO (OB:DNO) is turning the taps back on in Kurdistan, planning to resume drilling at its flagship Tawke field after surpassing 500 million barrels of cumulative output and enduring a long pipeline driven pause.

    See our latest analysis for DNO.

    The drilling restart hopes to build on strong momentum, with a roughly 36% year to date share price return and a powerful 67% one year total shareholder return suggesting investors are reassessing both growth and risk around DNO.

    If this kind of production driven story has your attention, it could be a good moment to explore aerospace and defense stocks as another way to spot operationally leveraged plays.

    With the share price still sitting at a discount to analyst targets despite surging returns and renewed drilling upside, investors now face a key question: is DNO still undervalued or is future growth already priced in?

    Most Popular Narrative Narrative: 18.2% Undervalued

    With DNO last closing at NOK 15.13 against a narrative fair value of NOK 18.50, the current pricing gap puts its future cash engine under the spotlight.

    The Sval Energi acquisition and focus on efficient, high margin assets strengthen DNO's production base, positioning it for stable cash generation and margin expansion. Accelerated advancements in operational efficiency, technology adoption, and high grading of the expanded portfolio (including synergies from the Sval acquisition) are expected to lower production costs, improve asset productivity, and drive further EBITDA margin expansion in coming years.

    Read the complete narrative.

    Curious how much growth, margin expansion, and future earnings power this narrative is baking in to reach that higher value? The full story reveals the production ramp, profitability shift, and valuation multiple that need to line up almost perfectly. Want to see which set of bold assumptions holds the whole calculation together?

    Result: Fair Value of $18.50 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, this upbeat narrative still hinges on smooth Kurdistan operations and disciplined integration of Sval Energi, where geopolitical setbacks or cost overruns could quickly erode the upside.

    Find out about the key risks to this DNO narrative.

    Build Your Own DNO Narrative

    If you want to stress test these assumptions or dig into the numbers yourself, you can build a fresh DNO story in minutes: Do it your way.

    A great starting point for your DNO research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

    Looking for more investment ideas?

    Before you move on, consider using the Simply Wall Street Screener to help identify opportunities you might otherwise miss.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.