Press Release

16 May 2008

DANA PETROLEUM PLC
("DANA", "THE COMPANY", OR "THE GROUP")

DANA INTERIM MANAGEMENT STATEMENT

Dana Petroleum plc, the independent oil and gas exploration and production company focused on growth through international exploration and the development of production in the North Sea and Egypt, is pleased to report its Interim Management Statement for the period to 15 May 2008.

HIGHLIGHTS

Delivery of Exploration Programme:

• Four wells drilled in the period, namely the significant oil discoveries at West Rinnes and East Rinnes in the UK Northern North Sea, the sub-commercial oil discovery at Morgan in the UK Central North Sea and a dry well at Bjorn in Norway

• West Rinnes and East Rinnes proved good quality Brent reservoir sands, excellent quality oil and high flow rates of 7,800 barrels per day. These discoveries are located just 5 kilometres from the Dana operated Hudson producing oil field and 2.5 kilometres from the Company’s Melville oil field. The Company is now considering further exploration potential in the area and the optimal development of the Rinnes discoveries, which are now the third and fourth oil fields under Dana’s operatorship in this prolific area of the Northern North Sea

• Currently drilling two wells offshore Egypt, at West El Burullus in the Nile Delta (Dana 50%), and at West Gihan in the Gulf of Suez (Dana 20%)

• Awarded seven blocks across three licences in Norway in January 2008. The partnership group has already secured a rig and committed to the drilling of the large Trolla prospect (Dana 30%) on licence PL.485 in 2009

• Pre-qualified as operator on the Norwegian Continental Shelf allowing the acquisition of seismic on the new operated licence PL.464 (Dana 55%) awarded in APA 2007

• Rig secured to drill the Tornado oil prospect (Dana 30%) in the UK West of Shetland area in first half of 2009

Record Production:

• Average production from 1 January to 30 April 2008 of approximately 44,650 barrels per day oil equivalent after impact of Forties Pipeline System shutdown

• Strong production from Cavendish gas and Enoch oil fields, Dana’s most recent developments, which were brought onstream in 2007

• Excellent performance from Egyptian oil fields, including additional production from the re-instated C1 well on East Zeit and the newly drilled South-West Qarun-12 well

• Rig now on location at East Zeit oil field, offshore Gulf of Suez, to undertake workover and infill drilling campaign, to be followed by drilling of Dana exploration prospects in Gulf of Suez

Three Development Projects sanctioned to deliver future production growth:

• Grouse oil field (Dana 50%), in Greater Kittiwake Area of UK Central North Sea, with first oil scheduled for early 2009, which will deliver high value incremental production as a tie-back to the Kittiwake platform

• Babbage gas field (Dana 40%), in UK Southern North Sea with first gas sales anticipated in Q1 2010

• E18 gas field (Dana 5.228%) in Dutch North Sea is being developed as a tie-back to the F16-E platform, with first production targeted for Q3 2009

• Dana operated Barbara/Phyllis joint gas field development in UK Central North Sea is progressing well. Host platform selection is planned for Q3 2008 with project sanction expected early 2009 

Strong Financial Position:

• Production growth and strong commodity prices have allowed a further US$25 million of bank debt to be repaid in the period. At 31 March 2008, net debt stood at £60.3 million, a reduction of £11 million from the 2007 year end

• Company remains unhedged and continues to benefit from record high oil prices and strength of UK gas prices

Dynamic Business Development:

• Completed acquisitions of 15% interest in offshore Tanger Larache, Morocco, and 20.67% stake in Block 21/20a in the Greater Kittiwake Area of the UK Central North Sea

• Farmed-out a 41% interest in the Monkwell area prior to drilling in Q3 2008, and negotiated a cost-carry through the work programme on Block 211/8a in the UK Northern North Sea

• Increased shareholding in Faroe Petroleum plc to 27.5% via a series of market purchases. As a result, Dana will equity account for its investment in Faroe Petroleum from 2008

Outlook:

• Group production for 2008 expected to average between 40,000 and 45,000 barrels per day oil equivalent, representing more than a 30% growth over 2007 

• Exciting period ahead with extensive infill drilling and exploration programme

• Up to 17 exploration wells scheduled in 2008 with rigs for 14 of these already secured

• Preparing a portfolio of applications for the UK 25th Licencing Round in May 2008 and also actively evaluating licence applications in Norway and Egypt

• Planned 2008 capital investment programme of approximately £200 million across existing fields and licences

 

Chief Executive, Tom Cross commented:

“Dana has started 2008 very strongly by delivering exploration success, sanctioning new field developments and achieving significant production growth. This outstanding performance has been a direct result of the work done in previous years through strategic new country entries, acquiring new exploration permits, extensive technical work and new field developments. We look forward to Dana’s continued progress throughout the rest of the year from further exploration drilling, new licence applications in the UK, Norway and Egypt, an active work programme on existing fields and emerging commercial opportunities.” 

16 May 2008

 

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