Dana Petroleum is pleased to announce that the Fin-1X exploration well has discovered a new oil field, in the North Zeit Bay Production Sharing Contract (“PSC”) area onshore in the Gulf of Suez, in Egypt. This follows the discovery of the Lorcan oil field, made just last month in the same PSC area.
The Fin-1X well (Dana 100% stakeholder and Operator) was drilled to a depth of 10,038 ft, some 3km from the Lorcan oil discovery announced in June. The Fin-1X well encountered good quality oil bearing sands in the Kareem formation, in line with Dana's prognosis prior to drilling.
During the drill stem test, the Fin-1X well flowed strongly with high downhole pressures delivering an average flow rate of 1,049 barrels of oil per day through a 52/64” choke. The flow rate during this test was restricted by the temporary flow testing facilities and the requirements to truck the produced oil from the desert location. The well has been retained as a future oil producer.
The Fin discovery together with Lorcan, which flowed at 4,714 barrels of oil per day and was also constrained by the testing equipment, confirms this area will be very attractive to develop. A preliminary development plan has already been submitted to the Egyptian General Petroleum Corporation (EGPC) for agreement. Dana estimates that these two discoveries so far in this PSC area have proven up initial reserves of 10-12 million barrels of oil (100% Dana) with the potential for considerable upside beyond these initial proved volumes. Further drilling is planned.
Once the development plan has been agreed with EGPC, an application will be submitted to the Ministry for a development lease. Following the development lease being lodged, the potential for early oil production will be discussed with EGPC. With EGPC's agreement, early production facilities which would allow oil to be exported by road tanker could be installed and operating within one month. The full development plan is to tie production from this PSC area back to the East Zeit oil and gas processing plant, which is situated just 15km to the south east of the Lorcan and Fin oil fields. Dana also holds a 100% working interest in East Zeit, making these developments extremely efficient and commercially attractive.
The drilling rig will now move to another operator to drill one well, which was a pre-existing contractual commitment for the rig, before returning to Dana's North Zeit Bay concession. Dana expects the rig to return in October, when it will drill at least one appraisal well on the Lorcan field plus a further exploration well in this important PSC area. Drilling on the North Zeit Bay concession will also continue in 2011.
For further information please contact:
|Tom Cross, Chief Executive||Dana Petroleum plc||01224 652400|
|Stuart Paton, Technical & Commercial Director||Dana Petroleum plc||01224 652400|
|Nick Elwes||College Hill Associates||020 7457 2020|
NOTES TO EDITORS:
Dana Petroleum plc is a leading independent oil and gas, exploration and production company listed on the London Stock Exchange (symbol: DNX), and is a constituent of the FTSE 250 Index.
The Group currently produces from 36 oil and gas fields across four countries (UK, Netherlands, Norway & Egypt) and holds more than 100 interests in exploration and production licences spanning nine countries. Dana’s activities are focused within its two core areas of Europe (North Sea) and Africa (North & West).
In Africa, Dana has production, development and exploration interests across Egypt, oil and gas discoveries offshore Mauritania and Morocco, and additional exploration opportunities offshore Senegal and Guinea.
In Europe, Dana’s producing interests are focused on oil and gas in the UK North Sea, oil offshore Norway and gas offshore The Netherlands. Dana also has significant development and exploration opportunities across the North Sea, including development of the Babbage gas field which is due on-stream in August 2010, the Arran gas fields (formerly known as Barbara/Phyllis) and the Western Isles oil fields.
In addition, on 14th June 2010 Dana entered into an agreement to acquire the entire issued share capital of Petro Canada Netherlands BV. The acquisition represents the Company’s largest acquisition to date, providing Dana with a significant growth step and a complementary asset base in the North Sea, bringing Dana’s total number of producing fields to 54 from 36 currently. The acquisition will provide Dana with an additional 31 million barrels of oil equivalent (“mmboe”) of proved and probable reserves and 51 mmboe of proved, probable and possible reserves at 31 December 2009, and unrisked prospective resources of up to a further 67 mmboe across the Petro Canada Netherlands portfolio (20 mmboe on a risked basis). Petro Canada Netherlands’ net production this year, to end April 2010, averaged 12,136 boepd. The acquisition is expected to complete in 3Q 2010 and should increase Dana's daily production to around 50,000 boepd. In addition, Petro Canada Netherlands is currently drilling the L06-08 exploration prospect.