Press Release
26th November 2003
DANA PETROLEUM PLC
("DANA", "THE COMPANY", OR "THE GROUP")
Dana Completes Acquisition of a 50% Interest in the Greater Kittiwake Area
Dana is pleased to announce the completion of the acquisition, from Shell U.K. Limited ('Shell'), Esso Exploration and Production UK Limited ('Esso') and Venture Production (North Sea Developments) Limited ('Venture'), of interests in the Kittiwake and Mallard oil fields, neighbouring oil discoveries and exploration licences in the UK Central North Sea. This completion follows the announcement of the key principles of the transactions on 29th April 2003. With the recent award to Dana and Venture of four new adjacent blocks in the 21st Licencing Round, announced on 5th August 2003, this completion finalises the creation of a new, commercially aligned, Dana/Venture 50/50 joint venture group covering the entire 'Greater Kittiwake Area'.
As part of the above completion process, Dana has sold its 50% interest in the shuttle tanker 'Norissia', acquired from Shell during the transaction, to Knutsen Bøyelaster XI KS ('Knutsen'). An arrangement has subsequently been entered into between Venture, acting as operator on behalf of the joint venture, and Knutsen to lease the vessel as the principal storage and export system for the Greater Kittiwake Area.
With the addition of Kittiwake and Mallard, Dana's current daily production will increase by around 2,500 boepd to approximately 21,000 boepd. Average production for the second half of 2003 is now forecast to be around 18,000 boepd (1H 2003 16,081 boepd) and average production for calendar year 2003 is consequently forecast to be approximately 17,000 boepd.
Commenting on the news, Tom Cross, Dana's Chief Executive, said:
"Completion of this complex series of transactions is another valuable step for Dana, which now produces from nine oil and gas fields. We look forward to working with Venture to unlock the considerable development and exploration potential which remains in the Greater Kittiwake Area.
Dana is on course to achieve its stretch production targets for 2003, namely to double oil and gas production over that in 2002 and to exit the year producing more than 20,000 barrels per day."
For further information please contact:
| Tom Cross, Chief Executive | Dana Petroleum plc | 01224 652400 |
| Andy Bostock, Technical Director | Dana Petroleum plc | 01224 652400 |
| James Henderson | College Hill Associates | 020 7457 2020 |
Notes to Editors:
1. Dana Petroleum plc is an independent oil and gas company focused on growth through high-impact international exploration and the acquisition and development of proven reserves in its core area of the North Sea. Since floating on the London Stock Exchange in 1996, Dana has achieved growth for 7 consecutive years. Net assets at mid 2003 were £148 million.
2. The Company has an excellent exploration strike rate, having made 11 oil and gas discoveries from its last 14 wells, including six consecutive discoveries in the North Sea. Dana had built up proven and probable reserves of 116 million barrels at end 2002 and, including Kittiwake and Mallard, now produces approximately 21,000 barrels of oil equivalent per day, around 90% of which emanates from the UK North Sea.
3. The Kittiwake and Mallard fields, which are both currently in production, have been developed via a single slim-line production and drilling platform located over the Kittiwake field with the Mallard field producing from subsea facilities via a 15 km pipeline. Oil is exported from the Kittiwake platform directly to market via a dedicated tanker.
4. In addition to infill drilling opportunities within the Kittiwake and Mallard fields, the surrounding blocks contain a significant portfolio of satellite development opportunities, including the existing Goosander, Gadwall and Grouse oil discoveries, and several identified but as yet undrilled exploration prospects. Dana was a coventurer in the discovery of the Goosander field in 1998 and an appraisal well drilled on the field in 2001.
5. An innovative feature of this transaction is the approach taken to decommissioning of the acquired facilities, with Shell retaining its share of the current decommissioning liability for the Kittiwake and Mallard facilities. Venture and Dana have put in place the required security for that part of the decommissioning not covered by Shell.
6. Esso Exploration and Production UK Limited is an affiliate of ExxonMobil International Limited.
