Dana Petroleum plc ("Dana") the upstream oil and gas exploration and production company focused on Europe, Africa and the Middle East announces its financial results for the twelve months ended 31 December, 2011 as well as a forward looking statement from Dr Marcus Richards, Group Chief Executive.
“As a transitional year, 2011 went very well for Dana Petroleum. We are delighted to have established a successful partnership with KNOC and created the momentum necessary to significantly grow the company.
“We are on track to achieve our goal of more than 100,000 boepd by 2016. With steady and sustainable production, we are reinvesting the cash Dana generates to fund a range of exploration, development and production activities across the portfolio, with immediate successes already being realised in both the UK and Egypt.
“These are exciting times for Dana. We are growing, not only in terms of size, financial success and production but also geographically, and we are building an exceptional team to ensure a bright future.”
Production was strong during 2011 with 25 production-related wells drilled during the year (18 production and seven injection/disposal) with particular successes in Egypt (Calum-1x and Omar-1x) and the UK (Goosander, Chestnut and Captain).
The 50% year-on-year increase in production to 61,970 boepd reflects a full year of production from the Dutch assets purchased in August 2010, a full year of production from the Captain asset and production from the assets acquired from Petro-Canada UK in March 2011.
The most significant contributions in terms of production are associated with participation in the fields of Greater Kittiwake area (GKA), Greater Guillemot area (GGA), Babbage, Cavendish, Captain, Hudson, Ettrick, Jotun, East Zeit, Hanze and De Ruyter.
Our goal is to continue to grow production to more than 100,000 boepd by 2016.
We completed 12 exploration and appraisal wells during the year, making a number of key discoveries. In the UK Southern North Sea we made the Tolmount gas discovery, in the Netherlands the Van Ghent East oil discovery, with two further oil discoveries, Matr-1xST and WON c-1x in Egypt. The results of the Cormoran-1 well in Mauritania, which was tested in late December 2010 at stabilised rates of up to 24 MMscfpd, were very encouraging.
We continued to build our exploration portfolio through licence round applications and commercial transactions throughout the year.
During the year we made good progress with developments in the UK, Netherlands and Egypt.
We received UK Government approval of the Environmental Statement for the Arran development in the UK Central North Sea. It is a Dana operated three-well subsea tie back to a new Bridge Linked Platform adjacent to the BG operated Lomond platform, with project sanction expected this year.
We also submitted an Environmental Statement and Field Development Plan to the UK Government for the Western Isles project in the UK Northern North Sea. It is a Dana operated nine-well project tied back to an FPSO, with project sanction expected this year.
The Medway integrated oil and gas project, utilising the existing De Ruyter facilities, made good progress during the year, culminating in the completion of an innovative tri-lateral well connecting the Van Ghent field – a first for the Dutch sector. First oil was delivered in early January 2012.
Following successful discoveries in 2010, first oil was produced from the Lorcan and Fin oil fields in North Zeit Bay, through Petro Kareem, a new joint venture between Dana and Egyptian General Petroleum Corporation. A third well, Matr-1xST, obtained development lease approval during the year with first oil achieved through the Lorcan Processing Facility in early January 2012.
As a core part of the business, the North Sea has been a particularly busy area for us over the last six months with some significant uplifts for the business. We strengthened our position in the Central North Sea with the acquisition of Hess’ 28.3% interest in the Bittern field, increasing Dana’s share to 33%, and adding c.5,500 boepd. As a result of the transaction, which we anticipate will complete on 1 October, Dana expects to assume operatorship of the Triton FPSO later this year.
We entered the detailed engineering design phase on the $1.5 billion Western Isles development project in the UK North Sea, which is expected to add more than 26,000 barrels of oil equivalent to Dana’s daily production, with first oil expected in 2015. The project is a joint venture between Dana with an operating equity share of 65%, and Cieco, which holds the remaining 35%.
We were awarded three new blocks (in a 50/50 partnership with Sorgenia) in the UK’s 26th licensing round, as well as five new licences in Norway adding additional prospective acreage adjacent to our producing assets and forthcoming exploration wells. We also welcomed the supportive measures introduced in the 2012 UK Budget, with a number of our fields set to benefit from the Small Field Allowance.
In the Netherlands, we completed the Medway development project delivering first gas from the Van Nes field and first oil from the Van Ghent well, adding a combined 4,000 boepd.
We were delighted when the Government of Cameroon awarded a PSC for the Bakassi West block in Cameroon. The deal extends the Company’s existing position in Africa. With Dana as operator, the PSC gives Dana access to prospective, shallow water exploration acreage in a new West African country.
However, it has been our operations in Egypt, which have demonstrated our drive to grow international production. Despite a challenging political backdrop we have maintained strong growth in the country highlighting our commitment not only to our operations but also to the country itself. Dana’s daily production in Egypt has increased to more than 13,000 boepd in 2012, already up 50% on 2011.
In January 2012, we confirmed first oil from the Matr-1XST well in the North Zeit Bay PSC area onshore in the Gulf of Suez. In March 2012 we completed the A12Z well in the East Zeit field, part of the US$169 million investment we’re making in the Zeitco joint venture. Two further East Zeit wells East Matr-1X and North Matr-1X followed in May, with two more development wells in the Gulf of Suez area in June.
To help us deliver our strategy, we are attracting talented people to Dana including a new Chief Geologist and Chief Geophysicist. In addition, demonstrating our appetite for inorganic growth, we appointed Jim Mair as Director of New Business Development who joined us following a 30-year career with Shell where he led the company’s exploration and production acquisition and divestments team and played a leading role in its corporate mergers and acquisitions activities.
Given our plans to invest US$1 billion each year to realise our ambition of becoming a leading international oil and gas company in Europe, Africa and the Middle East, these appointments are central to our future success.
Dana Petroleum plc is a $3 billion oil and gas business with operations in the UK, Egypt, Norway, The Netherlands and Africa, producing 60,000 barrels of oil a day. Our ambition is to grow to become a leading international oil and gas company operating in Europe, Africa and the Middle East. We will invest more than $5 billion over the next five years to more than double the size of the company.
Director of Group Communications and External Affairs