Dana Petroleum plc, the independent oil and gas exploration and production company focused on growth through international exploration and the development of production in the North Sea and Egypt, is pleased to provide the following operational update and outlook.

(Concerning Egypt)

Highlights:

  • Currently producing from 36 oil and gas fields, spanning the UK, Egypt, Norway and the Netherlands

Outlook:

  • Currently drilling three exploration wells: Papyrus offshore Nile Delta, RAD 3X in the Gulf of Suez and East of Nile F-1x well, to be followed with a balanced portfolio of 14 further wells planned in 2010. These wells are targeting significant prospects in the Faroe Islands (Anne Marie), offshore Nile Delta (Bamboo) and Mauritania Block 7, with a number of wells in Egypt and the UK which can be developed in a timely manner to deliver near term cash flow. 

Chief Executive, Tom Cross commented:
“Despite tough macro economic conditions during 2009, Dana has achieved substantial progress across its portfolio.
We have already begun an exciting drilling campaign for 2010, with three wells currently drilling in Egypt and a total of 17 exploration wells scheduled for this year across five countries.”

OPERATIONAL UPDATE

Extensive Exploration Programme Delivering Substantial Oil & Gas Reserves Increase:

  • During 2009, Dana completed drilling on 17 exploration wells. The Company is currently drilling three wells in Egypt; the Papyrus exploration well, offshore Nile Delta, the EON-1x well in the East Beni Suef concession and has just spudded the RAD-3x well, offshore Gulf of Suez.
  • Two further commercial discoveries were made in the East Beni Suef concession, onshore Egypt, with the Sohba field already having been brought on-stream.
  • The costs of unsuccessful exploration increased by £34 million during 2H09, due to write-downs following certain exploration work in Norway, Morocco and Egypt.

Robust Production Performance:

  • East Zeit in Egypt where the C2 well started cutting water in late 2008. The production decline was somewhat mitigated by a workover campaign during 2009.
  • Onshore Egypt concessions where the difficult economic environment of early 2009 caused operators to delay investment in the infill drilling programme. Notwithstanding this, across Dana’s non-operated portfolio in Egypt, three development wells were drilled along with 15 further well interventions, and a 3D seismic programme was acquired in the Qarun concession. The infill programme has now been re-energised with a significant number of wells planned for 2010.

Development Projects Progressing:

  • In addition to new field developments, a number of infill drilling targets have been identified within Dana’s producing fields. The Company has budgeted for further wells in the Claymore, Ettrick and Cavendish fields in the UK and each of the Egyptian concessions in 2010. In addition, further infill opportunities are being considered in the Chestnut, Johnston and Otter fields in the UK and the Dutch gas fields.

Outlook:

  • 17 exploration wells are currently scheduled for 2010, including the ongoing drilling in Egypt, at a total cost of approximately £115 million. The programme is targeting 200-250 mmboe net to Dana of unrisked reserves. These wells provide a balanced portfolio across each of Dana’s focus areas, and include:
    • the Anne Marie prospect, Faroe Islands, West of Shetland;
    • the Papyrus and Bamboo prospects, offshore Nile Delta;
    • two wells offshore the Gulf of Suez, Egypt;
    • two onshore wells in the Gulf of Suez, Egypt, and
    • five wells in the East Beni Suef concession, onshore Egypt, which provide the opportunity for near term production growth.
  • In addition to Dana’s extensive ongoing exploration and development programme, highlighted above, the Company will continue to appraise new opportunities and commercial transactions where Dana’s technical expertise and financial strength can be utilised to add further value for shareholders.

(Dana Petroleum Press Release)