Press Release

28th September 2004

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

Dana Trades Indonesian PSC Interest for UK North Sea Production

Dana Petroleum announces that its wholly owned subsidiary, Dana Petroleum (E&P) Limited, has reached agreement with Amerada Hess Limited to acquire an additional 28% interest in the Hudson Oil Field in the UK North Sea, thus increasing Dana's total stake in Hudson to 47.5%. In exchange, Dana will transfer its wholly owned subsidiary Dana Petroleum (Indonesia) LLC to Amerada Hess (Indonesia) Limited, along with a balancing cash consideration payable at completion. Dana Petroleum (Indonesia) LLC holds Dana's 12% interest in the Pangkah Production Sharing Contract ("PSC") offshore Indonesia as its sole asset.Dana Operations Map

On completion of the transaction, Dana's North Sea production is expected to rise by approximately 3,500 barrels of oil per day. At the effective date of 1st July 2004, Dana estimates the acquisition of approximately 5.6 million barrels of developed oil reserves in the Hudson Field will be offset by the divestment of approximately 10.0 million barrels equivalent of undeveloped gas reserves in Indonesia.

Final completion of the transaction, which is subject to normal regulatory and partner approvals, is expected to take place towards the end of 2004.

Commenting on the news, Tom Cross, Dana's Chief Executive, said:

"This transaction is in line with a key element of Dana's strategy, trading an undeveloped discovery in a non-core area for cash generative reserves in our core UK producing portfolio. For Dana, such a trade minimises the time between discovery and production and eliminates the capital intensive development phase. This step is an efficient method of realising the value of exploration success whilst continuing to grow the Company."

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

Notes to Editors:

  1. The Hudson Field is located in the UK Northern North Sea in blocks 210/24a and 210/24b. The field, which is currently operated by Amerada Hess, came on stream in 1993 and is now producing as a sub-sea tie-back to the Shell operated Tern platform 11km away. Current production is approximately 14,000 bbls/day from 4 production wells with 2 water injector wells. The current co-venturers are Amerada Hess 28%, CIECO 25.7%, Dana 19.5%, Shell 13.4% and ExxonMobil 13.4%.

  2. Dana entered the Ujung Pangkah PSC in 1997 and has subsequently been a coventurer in the discovery of the Ujung Pangkah gas field and the Sidayu oil discovery. Two successful appraisal wells were drilled on the western part of the Ujung Pangkah gas field in 2004. The development of the field is now expected to commence shortly with first gas in early 2007. Had Dana participated in the field development, the Company's share of overall capital expenditure was estimated to be US$25 million and would have delivered incremental gas production rates of approximately 12 million standard cubic feet per day (equivalent to approximately 2,000 barrels of oil per day).

  3. The final balancing cash sum will be determined at completion, expected to be at the end of 2004, following adjustments for net cash flow and working capital movements since the effective date of 1st July 2004.

  4. An exploration well is planned to test the Melville prospect in Block 210/24a, 6km to the south of the Hudson field, in the fourth quarter of 2004. Dana has separately reached agreement to increase its interest in the Melville area to approximately 26.6% through transactions with Shell and ExxonMobil.