Press Release

28th September 2004

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

Dana Agrees International Exploration Deal with Woodside

Dana is pleased to announce that it has entered into a multi-faceted agreement with Woodside Energy Ltd. ("Woodside") which will advance Dana's international exploration programme across four countries: Mauritania, Kenya, Ghana and Australia.

Firstly, Dana will acquire a 6.25% interest in the Block 2 Production Sharing Contract ('PSC') offshore Mauritania, with effect from 1 July 2004. In exchange, Dana will assign a 5% interest in the Block 7 PSC offshore Mauritania to Woodside. Woodside will additionally pay a cash consideration of US$100,000 to Dana and carry Dana's share of future seismic and drilling costs up to an amount of US$1.44 million. The completion of the assignments remains subject to the normal government, regulatory and partner approvals.

The Dorade-1 exploration well was spudded in Block 2 earlier this month by the West Navigator drillship as part of a top-hole batch drilling campaign. As planned, the well was subsequently suspended on 15th September 2004 having reached a depth of 2,352m, some 70m above the target horizon. It is expected that the potential reservoir section of the well will be drilled in the fourth quarter of 2004 when the well is re-entered using the Stena Tay drilling rig.

Secondly, Dana has invited Woodside to become a strategic exploration partner offshore Ghana, by granting Woodside an option over one half of Dana's interest in the Western Tano Basin. Woodside's option to join Dana remains subject to the completion by Woodside of a study of the exploration potential of the region and the conclusion of ongoing discussions with the Ghanaian authorities to extend the term of the Western Tano Petroleum Agreement to accommodate further deepwater exploration.

Finally, Dana has agreed to assign a 10% interest in the Block 5 and Block 7 PSCs offshore Kenya to Woodside in exchange for the assignment to Dana of a 10% interest in the Great Australian Bight exploration permits EPP 28, EPP 29, EPP 30 and EPP 31 offshore South Australia. In addition to the normal government, regulatory and partner approvals, the completion of these assignments remains subject to the completion of due diligence by Dana, and also to Woodside and Dana entering into a fully termed drilling services contract whereby Woodside will drill the Petrel-1 well in Block 1 offshore Mauritania on behalf of Dana and its Block 1 coventurers as part of the Woodside 2004/05 drilling campaign.

Dana's Chief Executive, Tom Cross, commented:

"This deal crystallises Dana's African exploration drilling plans for the next 12 to 18 months, with three wells now confirmed. These will test two important prospects offshore Mauritania, namely Dorade and Petrel, and a major first structure in Block 5 offshore Kenya. If results are encouraging, two further high-graded targets could be drilled within this period, at Faucon in Mauritania and in Block 7 Kenya.

We are delighted to be increasing our African collaboration with the Woodside exploration team, which has already proved successful at Pelican and in Kenya, and look forward to working as a co-venturer in the Great Australian Bight."

 

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. Mauritania Block 2

    The Dorade-1 well, is located in the north of Block 2 offshore Mauritania. The upper section of the well has been drilled by the West Navigator drillship as part of a batch drilling programme with other wells in Woodside's 2004/05 Mauritanian drilling campaign. The well has been temporarily suspended awaiting the arrival of the Stena Tay drillship to drill the reservoir section of the well in the fourth quarter of 2004. The participating interests pre and post this agreement in the Block 2 PSC are:

    Group
    Pre Agreement
    Post Agreement
    Dana
    -
    6.25%
    Woodside
    48%
    41.75%
    Hardman
    28.8%
    28.8%
    Energy Africa
    20%
    20%
    ROC Oil
    3.2%
    3.2%



  2. Mauritania Block 1

    The Petrel-1 well, located in Block 1 offshore Mauritania, is designed to test a large Cretaceous age structural trap with a first quarter 2005 spud date currently being targeted by Dana. Subject to sufficiently encouraging results from the Petrel-1 well, a second well on Block 1, to test the even larger Faucon prospect, is scheduled for later in 2005. Following a separate agreement with Tullow Oil plc, the participating interests in the Block 1 PSC at the time of the Petrel-1 well will be:

    Group
    Dana
    60%
    		  
    Hardman
    18%
    		  
    Tullow
    20%
    		  
    ROC Oil
    2%
    		  


  3. Mauritania Block 7

    Dana's first well offshore Mauritania, Pelican-1, was drilled in December 2003 in Block 7. It was a significant discovery, currently calculated to contain over one trillion cubic feet of gas in place, with the possibility of further stratigraphic upside. The participating interests pre and post this agreement in the Block 7 PSC are:

    Group
    Pre Agreement
    Post Agreement
    Dana
    68.85%
    63.85%
    Woodside
    10%
    15%
    Hardman
    16.2%
    16.2%
    ROC Oil
    4.95%
    4.95%


  4. Kenya

    Dana is a participant in four production sharing contracts offshore Kenya (Blocks L-5, L-7, L-10 and L-11) with a combined area of approximately 36,000 sq. km.. Interpretation of an extensive 2D seismic survey acquired in 2003 has confirmed the presence of numerous large prospects, with two large Cretaceous age structural trap prospects in Block L-5 and Block L-7 currently high-graded for drilling. An application has been made to the Kenyan Government to continue into the next phase of the Block L-5 PSC with a commitment to drill one well in the Block. Further infill 2D seismic is therefore now planned towards the end of 2004 with a view to finalising the location of the well for drilling around the end of 2005. Infill 2D data will also be acquired in Block L-7 so that, subject to sufficiently encouraging results from the first well in Block L-5 a second well could be drilled immediately thereafter as part of the same drilling campaign.

    As a result of a previous farm-in agreement, Dana has 20% of its costs in Blocks L-5 and L-7 carried by Woodside until two wells have been drilled. The participating equity and paying interests in the Block L-5 and Block L-7 PSCs pre and post this agreement are therefore:

    Group
    Pre Agreement
    Post Agreement
     
    Equity
    Paying
    Equity
    Paying
    Dana
    40%
    20%
    30%
    10%
    Woodside
    40%
    80%
    50%
    90%
    Global Petroleum
    20%
    -
    20%
    -


  5. South Australia

    Exploration permits EPP 28, EPP 29, EPP 30 and EPP 31 are located in the Great Australian Bight region offshore South Australia and together cover a vast area of approximately 65,000 sq.km. (equivalent to around 300 UKCS blocks). The acreage is broadly comparable in its risk-reward profile to Dana's Kenyan acreage, although analysis is at an early stage. A 2D seismic survey is planned in EPP 31 for late 2004. Work programmes for the next 3 years across the other permits are currently under discussion with the South Australian authorities, with a 3D seismic survey currently proposed in 2005 or 2006. The participating interests (subject to Woodside's completion of an agreement with a former co-venturer) pre and post this agreement in EPP 28, EPP 29, EPP 30 and EPP 31 are:

    Group
    Pre Agreement
    Post Agreement
    Dana
    -
    10%
    Woodside
    100%
    90%


  6. Ghana

    Dana has drilled two successful wells in the shallow-water region of the Western Tano Contract Area, in 2000 and 2002 respectively, discovering over 200 million barrels of oil in place. Given the viscous nature of the crude, an extended well test or pilot development is required to determine long-term commerciality. A number of high-potential stratigraphic fan prospects have also been identified from 3D seismic in the deep-water region of the contract area where oil would be expected to be of higher quality.

    Dana has applied for an extension to the term of the petroleum agreement, beyond its original end date of 31st July 2004, to accommodate appraisal of the shallow-water oil discovery and exploration drilling on the deep-water prospects. Discussion regarding the terms of such an extension is ongoing with the Ghanaian authorities, but remains to be finalised.