Press Release
20th December 2005
DANA PETROLEUM PLC
("DANA", "THE COMPANY", OR "THE GROUP")
International Operations Update
EGYPT - Second Deal Secured
Dana is delighted to announce that it has signed an agreement with Compania Espanola de Petroleos S.A. ("CEPSA") to acquire a stake in the South Feiran Concession, located in the Gulf of Suez, offshore Egypt. This deal builds upon the recently announced agreement with Gaz de France to acquire an interest in the West El Burullus area of the offshore Nile Delta region of Egypt. Following completion of the transaction, which is subject to normal regulatory and partner approvals, the South Feiran partners will be Dana 20%, IEOC Exploration (a subsidiary of Eni) 50% and operator, and Phoenix Redux Inc. 30%.
The South Feiran Concession covers an area of 349 square kilometres, with relatively shallow water depths in the range of 50 to 80 metres. The licenced area is surrounded by significant producing oil fields and associated oil and gas production infrastructure, including the very large Belayim fields which are estimated to have contained initial reserves in excess of 2.5 billion barrels of oil. A 3D seismic survey is now being planned over the high-graded eastern portion of the concession, with the objective of better defining a number of potential prospects already identified from earlier 2D seismic data. Exploration drilling is targeted for 2007.
MAURITANIA - Successful Completion of Exploration Drilling
Drilling of the Faucon-1 exploration well in Block 1 offshore Mauritania has now been completed with the well reaching a total depth of 13,682 feet (4,170 m). Final logging operations have been conducted, including the gathering of sidewall core samples and the shooting of a vertical seismic profile (VSP).
A further 172 feet (52.5 m) of sandstone formation has been intersected since the intermediate logging programme previously reported over the hydrocarbon bearing intervals. Whilst there were no significant shows seen in these lower sands, overall the results are very encouraging with a total of 316 feet (96.5 m) of potential reservoir having been found in this well of which the upper 46 feet (14 m) of net sand is hydrocarbon bearing. The hydrocarbon fluid composition cannot be finally determined until the downhole pressurised fluid samples recovered from the well have been analysed in an onshore laboratory, this is expected to occur during January 2006. Subject to completion of the recently announced exchange agreement with Gaz de France, the coventurers in Block 1 are Dana 36% and operator, Gaz de France 24%, Tullow Oil 20%, Hardman Resources 18% and Roc Oil 2%. All of Dana's costs in the Faucon-1 well will be free-carried by Gaz de France.
ALGERIA - Four Well Drilling Campaign Started
A new four-well drilling programme has begun in Block 353 onshore Algeria with a well to appraise the western flank of the Oued Zine gas field. The Oued Zine field is the largest of the ten gas discoveries made to date in Blocks 352a and 353, with the potential to contain up to 2.5 trillion cubic feet of gas in place. Two further appraisal wells and an exploration well are planned as part of the current drilling campaign. Subject to completion of the recently announced exchange agreement with Gaz de France, the coventurers in Blocks 352a and 353 are Dana 15%, Gaz de France 60% and operator and Algerian state organisation Sonatrach 25%.
MOROCCO - Major New Seismic Programme Underway
The acquisition of a 2,150 square kilometre 3D seismic survey over the North-West Safi exploration licence, offshore Morocco, is progressing at pace and is now nearly 40% complete. This survey aims to define drilling targets on a number of prospects identified from a 2D survey carried out in 2004, with a view to commencing exploration drilling in 2007. The partners in the North-West Safi licence are Dana 26.25%, Norsk Hydro 48.75% and operator and Moroccan state organisation ONHYM 25%.
Commenting on Dana's progress, Tom Cross, Chief Executive, noted:
"Dana's international business has moved ahead strongly during 2005.
The recent exchange deal with Gaz de France introduced a strategically important partner into Mauritania and gave Dana very valuable new assets in Algeria, Egypt and the UK. This will boost Dana's production and drilling opportunities significantly and, together with our entry into Morocco earlier in 2005, has both grown and balanced our international portfolio.
In particular, Dana has gained entry into the prolific petroleum countries of Egypt and Algeria where the opportunity exists for our team to build a material oil and gas asset base through both exploration and appraisal drilling and via further acquisitions. This is demonstrated by Dana securing entry into the attractive South Feiran Concession in Egypt so soon after the GDF deal. Drilling has already begun in Algeria and we expect the early acquisition of 3D seismic data in both our new Egyptian concessions and in our Moroccan licence to result in exploration drilling in 2007.
The Faucon-1
discovery is a very important result for Dana's licence interests in southern
Mauritania and Senegal, which span three large contiguous production sharing
contract areas. Whilst the information collected so far would imply Faucon
is unlikely to be commercial on a stand-alone basis, it has proven the
presence of hydrocarbons and that the vital combination of petroleum source,
reservoir and trap is working in this vastly under-explored part of West
Africa. Faucon has also demonstrated that significant potential reservoir
sand can be present in the Cretaceous, which could lead to much larger
discoveries in this region. Faucon therefore provides enormous encouragement
for the additional prospects in Block 1, such as Petrel, and also for
the future exploration of Dana's neighbouring licence interests, namely
Block 2 immediately to the north and the St. Louis Block in Senegal which
adjoins Block 1 to the south."
For further information please contact:
| Tom Cross, Chief Executive | Dana Petroleum plc | 01224 652400 |
| Andy Bostock, Technical Director | Dana Petroleum plc | 01224 652400 |
| Nick Elwes | College Hill Associates | 020 7457 2020 |
