Dana Petroleum

Press Release

1 June, 2009

DANA PETROLEUM PLC

ANNUAL GENERAL MEETING STATEMENT

Dana Petroleum is pleased to report that at its Annual General Meeting held earlier today all resolutions were approved by shareholders.

Commenting on the significant progress and activities of the Company, the board of directors released the following statement:

“2008 was another excellent year for Dana, with the Company continuing its successful track record of year-on-year growth. The highlights of 2008 included a number of exploration successes in the UK and Egypt, resulting in an outstanding reserves replacement ratio of almost 300%. In addition, Dana’s record oil and gas production helped to deliver a very strong financial performance.

The Company’s extensive drilling programme has continued in 2009, with 17 exploration and appraisal wells planned for this year. Already in 2009, there have been a number of valuable new discoveries, with oil found at South East Rinnes, gas condensate at Fulla in Norway, and a gas field discovered with Dana’s first well offshore Morocco, at Anchois. The Company has maintained strong momentum in terms of the number of exploration wells being drilled, whilst remaining focused on building the breadth and quality of its exploration, development and production portfolio.

Dana now produces oil and gas from 34 fields in the UK, Egypt, Norway and the Netherlands, and it is exploring for oil and gas in eight countries across Europe and Africa. The Company will continue to develop its existing asset base whilst seeking out new commercial opportunities.

The Group is in a very healthy position with a high calibre portfolio of production, development and exploration assets. This is underpinned by excellent cashflow and a strong balance sheet.

OPERATIONAL HIGHLIGHTS

Significant Growth in Asset Portfolio:

Dana successfully completed the acquisition of Bow Valley Energy on 30 April 2009. The assets acquired are an excellent fit and, effective from 1 May 2009, they add to Dana’s portfolio new interests in four producing oil fields in one of the Company’s core areas, the UK Central North Sea, with a fifth project, the Ettrick oil field development, expected on-stream in mid-summer 2009. Overall, the acquisition has proceeded very smoothly with integration of the Bow Valley assets into the Dana group now well underway.
The Company is delighted to have been awarded two attractive new licences in the Norwegian 20th Round. Dana has received a 20% interest in licence PL526, to be operated by North Energy, which covers blocks 6608/6, 6608/9 and 6609/4, and a 20% interest in PL523, to be operated by Eon Ruhrgas, which covers Blocks 6605/11 and 6605/12. Both licences build on Dana’s strong position in the Norwegian Sea where the Company already holds interests in two other large licences.

Delivery of Exploration Programme::

Dana is currently drilling two exploration wells, one onshore Egypt (Azhar-7x) and one onshore Morocco (Tafejjart-1).
The Company recently discovered a substantial gas-condensate field at Fulla, in the Norwegian North Sea, with a second well having just been drilled as a sidetrack to the original Fulla discovery well. Proven volumes for the two wells are currently estimated at between 60 and 105 million barrels of oil equivalent. The Fulla field is likely to be commercial and development options are now being considered.
In May 2009, the Det Norske operated Eitri well, offshore Norway, resulted in a minor discovery which gave encouragement for the remaining undrilled prospects in this area, which is close to Dana’s producing Jotun oil field. As a result the next target identified will be drilled by the Jetta well, which has been accelerated from 2010 into the second half of 2009. The results from this well will allow a more complete assessment of the resource potential in this core area for Dana in Norway.
Dana is making good progress on the drilling of the Tafejjart-1 well in the Bouanane concession, onshore Morocco. Results from this frontier exploration well are expected during July 2009.
The Company has advanced its plans to drill two further exploration wells in the West El Burullus concession offshore Nile Delta, Egypt, in which Dana holds a 50% interest. The first well, on the Papyrus prospect, is due to spud in September and will target gas at a similar horizon to the West El Burullus-1 discovery made in 2008. The key aim of this well is to prove additional gas volumes in this area in order to optimise development planning. The second well, on the very large Bamboo prospect, is due to spud in November, and will target deeper, high pressure gas reservoirs which have the potential to open up significant further prospectivity in the block.
Dana has continued to explore the East Beni Suef concession, onshore Egypt. The Company made an oil discovery at Gharibon-3x in January 2009 and the well came into production in April. Drilling is ongoing on the Azhar-7x exploration well with results expected by the end of May and up to three further wells are planned in the concession later this year. Development licence applications have been submitted for the Tareef and Sohba discoveries, which were made in 2008, with first production from both these fields expected later this year.
To date in 2009, Dana has had notable successes at South East Rinnes, Anchois and Fulla. Due to recently advised delays in rig arrival and in an effort to optimise timing into the Spring/Summer weather window, the planned well on Anne Marie in the Faroese West of Shetlands area has been moved to Q2 2010. However, the Company is now planning to drill the BP operated September prospect, on the North Ghara licence in the Gulf of Suez, starting in June 2009.

Production and Development Progress:

Group production to end April 2009 has averaged approximately 38,600 barrels per day oil equivalent. The Bow Valley assets, which can be taken into account post completion of the transaction on 30 April 2009, add approximately 5,400 barrels per day oil equivalent. This figure will increase when the Ettrick field comes on-stream.
At the East Zeit field in Egypt (Dana 100%) the water-cut on the C2 well, which was drilled in 2008, has increased more rapidly than expected, reducing field production by approximately 3,000-4,000 barrels per day oil equivalent. The Company is currently undertaking a workover programme on the field to offset this production decline and is also evaluating longer term infill opportunities. The effect on earnings of lower than expected production from East Zeit is mitigated due to the terms of the Production Sharing Contract.
Development of the Babbage gas field (Dana 40%), in the UK Southern North Sea and the E18 gas field (Dana 5.228%) in the Dutch North Sea are both progressing according to plan with first production scheduled for Q1 2010 and Q3 2009 respectively.
Work on the Dana operated Barbara/Phyllis joint gas field development project, in the UK Central North Sea, is progressing well with host platform selection now planned for mid 2009 and project sanction expected early in 2010.
Conceptual studies are already underway on the Rinnes-Melville oil development in the UK Northern North Sea. A number of alternative options are being considered and the aim is to evaluate the most attractive development scenario during the second half of 2009.
In addition to new field developments, a number of infill drilling targets have been identified within Dana’s existing fields. A recent well on the F16 gas field in the Dutch sector has proved up additional gas volumes, and further opportunities for drilling in 2010-2012 are being considered in the Cavendish and Johnston gas fields and the Otter oil field, all in the UK, and in each of the Egyptian concessions.

FINANCIAL POSITION

The Dana group has recently increased its financial strength through a new 3 year corporate debt facility with Bank of Scotland. To complete the acquisition of Bow Valley Energy, the Company has to date drawn down approximately $173 million under this facility, from the currently available $300 million. The Company is now progressing through a syndication process with a view to expanding this facility by up to a further $100 million. In addition, the Company successfully raised £56 million through a share placing in May 2009.
At the end of April 2009, following completion of the Bow Valley transaction (but prior to the share placing in May), the Dana group had total net debt of approximately £168 million, inclusive of the convertible bond of £118 million.

OUTLOOK

Taking into account the final Bow Valley completion date, the latest expected timing for the start up of the Ettrick field and the production activities highlighted above, the Group’s average production for 2009 is expected to be around 43,000 barrels per day of oil equivalent. The full year out-turn will be dependent on facility uptime and no significant reduction in off-take from the Group’s UK Southern North Sea gas fields due to low spot gas prices. The 2009 full-year forecast will be updated once Ettrick is on-stream and early field performance is known.
Dana’s overall 2009 capital investment programme, including projected spending on the newly acquired Bow Valley assets, is currently expected to be approximately £244 million.
The Company now expects to drill some 17 exploration wells during 2009. The exploration programme for 2010 will be refined over the coming months and reflect rig availability and discussions with co-venturers.
In addition to Dana’s extensive exploration and development programme, highlighted above, the Company will continue to appraise new investment opportunities and commercial transactions which can add further value to the Dana group.”

Chief Executive, Tom Cross commented:

“Dana achieved record production growth in 2008 and also had an excellent year of drilling results, adding record oil and gas reserves and replacing production by some 300%.

Following the successful acquisition of Bow Valley Energy, the Group is now producing from 34 oil and gas fields. Furthermore, both the Ettrick oil field and the E18 gas field are due to come on-stream in 2009 and the Babbage gas field will deliver first production in 2010. In addition the Company is progressing well with a number of highly attractive development projects, such as the Rinnes/Melville oil fields and the Barbara/Phyllis gas fields.

2009 will also see the delivery of an extensive exploration programme. A total of 17 wells are planned for this year, focused on the UK, Norway, Morocco and Egypt. Already this year important discoveries have been made at South East Rinnes, Fulla and Anchois in the UK, Norway and Morocco respectively.

The Company is well positioned, with a strong balance sheet alongside a valuable portfolio of growth opportunities, and is looking forward to an exciting period ahead.”

1 June, 2009

For further information please contact:

Tom Cross, Chief Executive	Dana Petroleum plc	01224 652400
David MacFarlane, Finance Director	Dana Petroleum plc	01224 652400
Stuart Paton, Technical & Commercial Director	Dana Petroleum plc	01224 652400
Nick Elwes / Paddy Blewer	College Hill Associates	020 7457 2020