OSLO, July 12, 2012 /CNW/ – DNO International ASA (“DNO International”),
the Norwegian oil and gas company, announced today that based on recent
news from Calvalley Petroleum Inc. (“Calvalley”) (TSX: CVI.A), it has
currently decided not to proceed with its proposed all-cash offer (the
“Offer”) to acquire Calvalley at a price of CAD 2.30 per Class A common
share.

DNO International previously announced on 5 July 2012 its intention to
commence the Offer on or about 12 July 2012 by way of publication of an
advertisement and filing of a formal take-over bid circular. At that
time, DNO International had not received any meaningful engagement from
Calvalley’s board of directors or senior management to its approaches,
including an offer letter dated 7 June 2012, and therefore felt
compelled to bring instead its offer directly to the Calvalley
shareholders.

Following DNO International’s announcement, Calvalley in turn disclosed
on 6 July 2012 that it had received from one of its partners a Notice
of Material Terms and Conditions (the “Notice”) that set forth the
provisions under which such partner intends to dispose of its 25
percent working interest in Block 9, Republic of Yemen (“Block 9”) to a
third party. Calvalley further disclosed that under Block 9’s joint
operating agreement, the existing partners have the option to match the
offer and acquire either all or their proportionate share of the
working interest to be assigned and that the Calvalley board of
directors would meet immediately to consider its options.

The opportunity by Calvalley to match the offer on Block 9 may help
explain Calvalley’s previous reluctance to enter into any meaningful
dialogue.

DNO International looks forward to learning Calvalley’s response to the
Notice before determining whether or how best to engage in a
constructive dialogue towards any transaction.

—
DNO International ASA is an Oslo-listed, Middle East and North Africa
focused oil and gas company holding stakes in 17 licenses in various
stages of exploration, development and production both onshore and
offshore in the Kurdistan Region of Iraq, the Republic of Yemen, the
Sultanate of Oman, the United Arab Emirates and the Tunisian Republic. http://www.dno.no
—

Oslo, 12 July 2012

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DNO International ASA
Corporate Communications

This information is subject of the disclosure requirements acc. to §5-12
vphl (Norwegian Securities Trading Act)

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This news release contains statements that constitute “forward-looking
information” or “forward-looking statements” (collectively
“forward-looking information”) within the meaning of applicable
securities legislation. This forward-looking information includes,
among others, statements regarding DNO International’s intention not to
proceed with the Offer, Calvalley’s intentions with respect to the
Notice and DNO International’s and Calvalley’s ongoing relationship.
This forward-looking information is subject to numerous risks and
uncertainties, certain of which are beyond DNO International’s control
including, without limitation, uncertainty related to Calvalley’s
future plans and ability to carry out and complete such future plans.
Readers are cautioned that the foregoing list of risk factors is not
exhaustive. DNO International’s actual results, performance or
achievements may differ materially from those expressed in, or implied
by this forward-looking information and, accordingly, no assurance can
be given that any events anticipated by the forward-looking information
will transpire or occur, or if any of them do so, what benefits that
DNO International will derive therefrom.

Information in this news release concerning Calvalley is based entirely
on publicly available sources and has not been independently verified
by DNO International. DNO International assumes no responsibility for
the accuracy or completeness of such information.

Note: All financial figures are in Canadian dollars unless noted
otherwise.

This news release does not constitute an offer to sell or the
solicitation of an offer to buy any securities. No offering of
securities will be made absent registration under, or an exemption from
the registration requirements of, applicable securities laws.

SOURCE DNO International ASA