Press Release

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2005

Dana Petroleum, the independent oil and gas exploration and production company focused on growth through international exploration and the development of low risk North Sea production, reports its interim results for the first half of 2005.

HIGHLIGHTS

Record Operating Performance

• Turnover increased by 47% to £71.6m (1H 2004: £48.7m)
• Average production achieved a new high of 18,796 boepd (1H 2004: 17,895 boepd)
• Operating profit approximately doubled to £40.0m (1H 2004: £20.1m)
• Profit after tax rose by over 150% to £24.1m (1H 2004: £9.5m)
• Record earnings per share for the first half of 30.47p (1H 2004: 12.71p)
• Cash flow from operations up 88% to £47.8m (1H 2004: £25.4m)
• Net cash advanced to £39.1m (end 2004: £20.5m)
  

Successful 2005 Exploration and Appraisal Programme

• Four wells completed to date, with three of these finding new oil and gas reserves
  - Melville oil field discovered close to Dana operated Hudson infrastructure
  - Additional gas proved adjacent to Johnston field leading to production boost by year end
  - Successful drilling near Barbara gas field has increased Dana's stake in the project
• 3D seismic and electromagnetic surveys acquired offshore Mauritania ahead of next phase of exploration drilling
• Important new exploration acreage acquired in the North Sea and offshore Morocco
• Highly successful in UKCS 23rd Licencing Round, being awarded 20 new blocks
• Securing large new territory West of Shetland complemented Dana's increased stake in Faroe Petroleum plc.
  

Extensive Development Activity and Asset Trading Ensures Future Production Growth

• Acquired an additional interest in the Hudson oil field and first North Sea operatorship
• Completed asset trade to secure a stake in the Johnston gas field
• Gadwall oil field brought on stream in April and performing well
• F16-E development ahead of schedule with first gas due in Q4 2005
• Successful development drilling and workovers completed in Mallard, Johnston, Otter and Claymore fields to access new reserves and extend field life
• Cavendish gas field and Enoch oil field developments approved with first production in 2006

Exciting Outlook for Exploration and Production

• Two further exploration prospects, Faucon (Mauritania) and Clachnaben (UK), to be drilled before year end
• Currently planning to drill up to a further 20 E&A wells through end 2007, around half of which will target large international prospects with major upside potential
• Goosander oil field development sanction expected before end 2005 with approval for up to six further new field developments to be sought in 2006
• Group production on target to double to over 40,000 boepd by end 2007, from current portfolio of producing and development assets
• Unhedged position currently provides full exposure to commodity price strength
  

Colin Goodall, Chairman of Dana, commented:

"Dana has continued to make excellent progress through 2005, delivering record interim results. The Group now produces from 11 oil and gas fields with three more currently under development and further projects to be sanctioned in 2006. The Company is on target to double production to over 40,000 barrels per day by the end of 2007.

Exploration and appraisal drilling is advancing strongly with three of the four wells drilled so far this year proving up new reserves and two further exploration wells scheduled before year end. With a substantial inventory of quality prospects and rising cash flow, Dana intends to accelerate the pace of new drilling with an ambitious plan for up to 20 wells over the next two years."