Press Release
29th July 2003
DANA PETROLEUM plc
(“Dana”, “the Company” or “the Group”)
ANNUAL GENERAL MEETING STATEMENT
Dana is pleased to report that at its Annual General Meeting held earlier today all resolutions were approved unanimously by shareholders. This included the proposal to consolidate the Dana shares on a 15 for 1 basis, announced on 27 June 2003, and hence the approved consolidation will take effect from tomorrow, 30 July 2003. In addition, Dana’s Chairman, Charles Smith made the following statement:
Overview
“2002 was an excellent year for Dana. A successful acquisition and divestment programme complemented ongoing field development activity and was enhanced by further exploration success, all resulting in record operating and financial performance. Annual production grew by 41% and this also delivered record levels of turnover, cash flow and profit in 2002, placing Dana in a strong position to execute its exploration and development work programme during 2003 and 2004. The combination of new discoveries, the development of existing fields and acquisitions, led to proven and probable oil and gas reserves rising to a record high at year-end of 116 million barrels of oil equivalent (boe).
Dana has continued this momentum into 2003. A balanced exploration, development and acquisition programme has been financed by strong cashflow from the Group’s rapidly growing production volumes and healthy commodity prices. Production for the first half of 2003 has surpassed expectations and has averaged approximately 16,000 boe per day. This represents an increase of over 200% on the rate achieved for the same period in 2002, (5,275 boe per day). Over 90% of Dana’s revenue now comes from its six producing fields in the UK North Sea.
UK North Sea
The Caledonia oil field was brought on stream in February ahead of schedule, and is producing well as a sub-sea tie-back to the Britannia platform. Drilling has progressed at pace on the Otter field, with the fifth and last development well successfully completed in May. These two new fields now contribute over 8,000 boe per day to Dana. Dana is also working with its partners in the Cavendish gas field in the Southern North Sea to finalise developments plans for the field by year-end.
In addition to the progress at Caledonia and Otter, in April, principal terms were agreed between Dana, Venture, Shell and ExxonMobil for the acquisition by Dana and Venture of a 50% interest each in the Kittiwake and Mallard oil fields and the surrounding development and exploration licences in the Central North Sea. This deal is scheduled for completion during the fourth quarter. The two additional field interests are expected to supply a further 2,500 bopd to Dana’s production initially, and should also open up some attractive opportunities to add value in the Greater Kittiwake Area. The prospects for infill drilling, further exploration and satellite developments are all currently being studied, including the potential to tie-back the Company’s existing Goosander oil discovery to the Kittiwake field.
Dana has also been an active participant in the 21st UKCS Licencing Round, applying for a number of new licences with significant exploration upside. We are expecting an announcement of awards by the Energy Minister shortly.
Russia
Oil production continued to flow steadily from the South Vat-Yoganskoye field and this has been joined by first oil production from the Upper Salym field, also in the West Siberian basin.
Mauritania
Dana’s exploration and operations teams are currently planning our first deep water exploration well offshore Mauritania. This is scheduled to test the Pelican prospect in Block 7, towards the end of 2003. With a potential oil target of several hundred million barrels in place, this well, in which Dana holds an 80% interest, could prove an important milestone for the Company.
Kenya
The deal recently announced to farm-out 40% of Dana’s interest in offshore Kenya to Woodside, in return for an 80% contribution to exploration costs, has now been formally approved by the Kenyan authorities. The acquisition of a large seismic survey is due to commence in the next two months. If successful this may lead to exploration drilling in 2005.
Western Australia
The Kenya seismic survey follows the completion, in May, of a 3D seismic survey over Permit WA-226-P offshore Western Australia, which it is hoped will lead to further drilling there in 2004, following the oil shows seen in the Morangie well in 2002.
Indonesia
Approvals for the development of the 460 bcf Ujung Pangkah gas development are expected this quarter with first gas scheduled to flow in 2005. In addition, further appraisal drilling on the Western flank of the Ujung Pangkah field and the nearby Sidayu oil field is planned to commence around year-end. This appraisal programme has the potential to double current gas reserves and create a new oil development in the region.
Faroe Islands
The Marimas exploration well is currently being drilled to test a series of prospects and results are expected by September. Dana holds an interest in this area through its stake in Faroe Petroleum plc (FP), the niche Atlantic margin oil company. FP completed a successful flotation on the London Stock Exchange last month and is currently acquiring stakes in two UK fields West of Shetland, Laggan and Suilven, from ENI Agip.
In summary, Dana’s strategy of ensuring a balanced portfolio of significant exploration, development and acquisition opportunities, underpinned by reliable cash flow from a quality production stream, continues to deliver results. New reserves are being added at an attractive finding cost of less than $2 per barrel and strongly rising UK cash flow will yield further increases in revenue and profit in 2003. On behalf of the Board I wish to pay tribute to our staff and the excellent results they are achieving.
The Company has a clear strategy and a highly skilled team, which is delivering it. Dana is therefore well positioned to continue solid growth through 2003 and beyond.
I would like to take this opportunity to thank all our shareholders for their continued support and interest in the Company’s activities.”
Charles M Smith CBE
Chairman
For further information please contact:
| Tom Cross | Chief Executive | 01224 652 400 |
| Andy Bostock | Technical Director | 01224 652 400 |
| Justine Hibbert | College Hill Associates | 020 7457 2020 |
