Dana reveals ‘exciting’ new drilling plans despite profits drop

Dana Petroleum, the 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 report its preliminary results for 2009.


Preliminary results for the year ended 31 December 2009


Strong Growth in Oil and Gas Reserves

  • Proven and probable reserves increased to a new record high of 223 mmboe at end 2009 (end 2008: 194 mmboe)
  • Oil and gas reserves additions represent a reserves replacement ratio of approximately 304% for the year

Major Corporate Initiatives and Business Development

  • Completion of acquisition of Bow Valley Energy
  • New three year USD 400 million revolving credit facility agreed with Bank of Scotland and successfully syndicated to a further seven experienced oil and gas banks
  • Secured interest in highly prospective acreage offshore Guinea;  seismic already underway

Expanded Production Base and Valuable Development Pipeline

  • E18 gas field in the Netherlands brought onstream in June and four producing UK oil field interests added through Bow Valley acquisition
  • Ettrick oil field successfully brought onstream in August
  • Average oil and gas production of approximately 38,700 boepd delivered in 2009
  • Currently producing from a total of 36 oil and gas fields, spanning the UK, Egypt, Norway and the Netherlands
  • Final facilities commissioning underway on Babbage gas development in UK Southern North Sea, with first production planned for mid 2010
  • Good progress made on both the Barbara-Phyllis and Western Isles development projects, with sanction decisions planned for end 2010

Extensive and Successful Exploration Program

  • 17 exploration wells completed in 2009
  • Significant oil and gas reserves added through the drillbit, notably in the UK (SE Rinnes and Tornado), Norway (Fulla) and Morocco (Anchois)
  • Attractive new acreage won in the UK and Norway, including nine new blocks in the recently announced APA2009 Awards offshore Norway
  • Encouraging start to the 2010 exploration programme with a second gas and condensate discovery with the Papyrus well on the West El Burullus concession, offshore Nile Delta, Egypt
  • Three further wells currently drilling offshore Egypt, UK and the Netherlands

Robust Financial Performance

  • Revenue reduced by 23%, reflecting the much lower commodity price environment, to £397.3 million (2008: £518.0 million) with pre-tax profit of £56.4 million (2008: £191.4 million)
  • Earnings before Interest, Tax, Depreciation and Exploration expense (EBITDAX) remained strong at £227.7 million (2008: £327.1 million)
  • Cash generated from operations was £164.7 million (2008: £345.0 million)
  • The Company closed the year in a strong financial position, with Group cash of £67 million and net bank debt (excluding convertible bond) of just £24 million, and overall gearing of 22%
  • The remaining headroom of net USD 360 million under the Group’s debt facility ensures a robust financial basis for the Company, with significant scope to grow the business


  • Group working interest production for 2010 forecast to average between 37,000 and 41,000 boepd, assuming a continuation of 2009 UK gas market dynamics
  • First gas production expected from the Babbage field mid 2010
  • 17 Exploration wells to be drilled in 2010
  • Three wells are currently drilling, Bamboo in the Nile Delta, Platypus in the UK Southern North Sea and K3-4 in the Netherlands
  • Of the wells remaining in the schedule, most notable are:
    • Anne Marie prospect in the Faroe Islands, West of Shetland, expected to spud in April
    • Cormoran prospect in Block 7 in Mauritania, expected to be drilled during Q3 2010
  • Also in 2010: two further wells are scheduled for the UK Southern North Sea, two onshore and two offshore wells in the Gulf of Suez area, Egypt, one well in Norway and four wells in the East Beni Suef concession in the Western Desert, Egypt
  • Planned 2010 organic capital investment of approximately £235 million across existing fields and licences of which £115 million will be targeted at exploration, aiming to deliver approximately 300 mmboe net to Dana of unrisked P50 reserves
  • Intense commercial activity continues to identify and execute value adding opportunities

Chief Executive, Tom Cross commented:

“Despite tough macro economic conditions during 2009, Dana has achieved substantial progress across its portfolio. The Company successfully delivered the acquisition of Bow Valley Energy and completed a debt re-financing on competitive terms. Together with five significant new oil and gas discoveries, reserves were driven to a new record high. We have already begun an exciting drilling campaign for 2010, with early success at Papyrus in the Nile Delta and a further three wells currently drilling. In total 17 exploration wells are scheduled for this year across five countries. ”


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