Dana Petroleum plc ("Dana") is pleased to announce that The Egyptian Ministry of Petroleum has approved "Petro Kareem" - a new joint venture between Dana and the Egyptian General Petroleum Corporation.
Petro Kareem will produce oil and gas from the Lorcan Development lease, within the North Zeit Bay ("NZB") concession, located onshore in the Gulf of Suez, 320km south east of Cairo.
The NZB Production Sharing Contract ("PSC") area, in which Dana holds a 100% interest, consists of two wells currently producing oil via the Lorcan Processing Facility, Lorcan-1xST and Fin-1x, with the potential to add a further four wells (Matr-1xST, Calumn-1x, Abydos-1x and Omar-1x), pending development lease approval.
Dana estimates that there are reserves of 10 - 12 million boe (100% Dana) within the PSC area with the potential of considerable upside beyond this. During the early production testing of the Lorcan lease, production of more than 0.25 million barrels of oil has already been achieved.
This positive news follows several significant exploration successes for Dana Petroleum Egypt during 2011.
Within the NZB PSC area, the Dana operated Matr-1xST well encountered good quality oil bearing sands and drilled to a total depth of 8925 feet on 27 December 2010. The well flowed strongly, delivering flow rates of 4,433 bopd with a 64/64" choke. Subsequently Dana established a gas condensate field discovery through the Calumn-1x well which reached total depth of 5,300 feet on the 17 February 2011, encountering high quality gas bearing sands, testing at flow rates of up to 16.5 million cubic feet of gas per day with a 48/64" choke.
Maximum deliverability could not be tested due to surface testing limitations. Shortly after this, Omar-1X well reached total depth of 5,605 feet on the 26 March 2011, also a gas condensate discovery, testing at 29.8 million cubic feet of gas per day. Elsewhere, on the onshore East Beni Suef concession (Dana 50%, Apache Operator 50%) enjoyed further exploration success later in the year, with two oil discoveries made firstly on 1 June 2011 by the WON C-1X well and secondly via Fayoum-3x on 2 October 2011. Both discoveries have been declared commercial and have had development leases awarded by the Ministry of Petroleum.
Commenting on what has been a successful year, Dana's Managing Director in Egypt, Nick Dancer, said:
"2011 has been a very exciting year for Dana Egypt. Such positive results from various exploration activities have been strengthened by the recent Petro Kareem joint venture approval. Lorcan's onshore location makes it an extremely attractive production opportunity and we have plans for up to seven exploration / appraisal wells in the concession area for 2012. This demonstrates Dana's credentials as an operator and partner choice."