Dana Petroleum
Business development and commercial activity
Key commercial transactions undertaken during 2009
- In April 2009, the Group acquired the entire share capital of Bow Valley, a company listed on the Toronto Stock Exchange, through a plan of arrangement. Aggregate consideration was approximately USD 212 million equivalent, which included the assumption of USD 176 million of net debt. The transaction delivered production from four oil fields producing in the UK, namely Blane, Chestnut, Enoch and Kyle, with a fifth, Ettrick, which came onstream during August 2009. The acquisition added approximately 12 mmboe of reserves at the date of completion and a substantial UK tax loss position which has delivered further benefit to Dana post acquisition, particularly given the oil price recovery in the second half of 2009. Through this deal, the Company has again demonstrated its ability to undertake complicated transactions in a difficult financial and economic climate, in a timely manner.
- In December 2009, Dana signed a binding Sale and Purchase Agreement with Hyperdynamics Inc to acquire 23% equity in an exploration stage Production Sharing Contract (PSC) covering offshore Guinea, West Africa for a total consideration of USD 20 million. This acreage is considered to be highly prospective given the recent discoveries in the West Africa Transform Margin including those in Ghana and Sierra Leone. The partnership aims to acquire 3D seismic over the highest ranked prospects in 2010, with the objective of drilling the first exploration well by late 2011.
- Farm-out of a 10% interest in the Eitri and Jetta wells in Norway to Bridge Energy enabling an additional exploration well to be accommodated in the 2009 programme while remaining within the agreed budgeted spend for the year.
- Completion of a deal with CalEnergy originated during November 2008. Dana acquired a 45% equity in Block 48/1a, UK Southern North Sea (adjacent to the Babbage discovery) for circa £2 million, carrying CalEnergy through its remaining 5% well costs. An additional element of the farm-in, gave Dana a 40% equity in 48/1c at no further cost. This part of the deal completed during June 2009. Drilling is planned on the Platypus prospect in this area during the first half of the year. This gives Dana further exposure to an exploration well close to infrastructure where Dana holds a material existing interest.
Licence rounds
Dana again was an active participant in licence rounds in the UK and Norway. Successful awards enable the Group to broaden its exploration portfolio and provide the potential for further drilling opportunities in the future.
Other commercial opportunities
Oil price volatility and the difficult financial market conditions have been a catalyst for an increasing number of commercial opportunities. The Group regularly reviews such opportunities and the upstream corporate landscape for potential value-adding transactions and will continue to do so.
- Production
- Reserves Growth
- Exploration
- Development
- Business Development
- Our People
- H,S & E Performance
Business development during 2009 continued the success of previous years through a combination of a production adding deal, a material exploration new country entry, and a number of portfolio optimisation transactions. Through the Bow Valley deal, in particular, the Company has again demonstrated its ability to move swiftly and undertake complicated transactions in a difficult financial and economic climate.
