Dana Petroleum PLC
08 November 2005
Embargoed until 07.00 hrs on 8th November 2005
PRESS RELEASE
DANA PETROLEUM PLC ("Dana" or "the Company" or "the Group")
Dana Expands International Business into Algeria and Egypt, Increases North Sea
Gas Production and Secures Free Carry in Mauritania
Dana Petroleum plc is pleased to announce that its wholly owned subsidiary, Dana
Petroleum (E&P) Limited, has signed two agreements with subsidiaries of Gaz de
France ("GDF"), a leading European gas and LNG player. In the first of these,
GDF has agreed to assign to Dana a 15% working interest in the production
sharing contract for Blocks 352a and 353, located in the prolific Sbaa basin,
onshore south-west Algeria, for a cash consideration of US$93 million. An
estimated 2.6 trillion cubic feet of recoverable gas has been discovered on
these blocks to date within seven main accumulations of which the largest,
containing approximately half this volume, is the Oued Zine field. Although
commerciality has not yet been formally declared, a development plan is under
preparation with gas production scheduled to commence in 2010 at rates of 560
million standard cubic feet per day.
In parallel with this acquisition, Dana and GDF have executed an exchange
agreement by which Dana will be assigned three significant assets in the UK and
Egypt. Firstly, Dana will gain a 25% interest in the producing Anglia gas field
and associated UK North Sea Blocks 48/18b, 48/19b and 48/19e. Secondly, the
Company will receive an additional 22.113% interest in the producing Johnston
gas field (together with a 30% interest in associated UK North Sea Block 43/
27a), this will take the Group's total interest in Johnston gas production up to
approximately 50%. Thirdly, Dana will gain a 30% interest in the recently
awarded production sharing contract for the West El Burullus Concession in the
Nile Delta, offshore Egypt. The Nile Delta has now emerged as a prolific
hydrocarbon basin, where gas production and LNG infrastructure is well
established and large discoveries continue to be made.
In exchange for the above assets, Dana has agreed to transfer to GDF a 24%
interest in Block 1 offshore Mauritania, a 27.85% interest in Block 7 and a
17.5% interest in Block 8. Dana will thus retain a 36% interest in Blocks 1 and
7 and a 24% interest in Block 8. Dana will remain as operator of all three
blocks. In addition, GDF will pay all of Dana's costs associated with the next
three deep-water exploration wells offshore Mauritania, one well is planned on
each of the blocks, up to a cumulative cap of US$30 million. The Company will
pay for an additional 30% of costs associated with the first exploration well in
the West El Burullus Concession up to a cap of three million US dollars.
On completion of the exchange transaction, Dana's North Sea gas production is
expected to rise by approximately 18 million standard cubic feet per day (3,100
barrels of oil equivalent per day). At the effective date of the deal, 1st July
2005, Dana estimates the exchange will also add 43 billion cubic feet of North
Sea proven and probable gas reserves to the Company (7.4 million barrels of oil
equivalent).
On completion of the acquisition of the Algerian interest, Dana will add 390
billion cubic feet of contingent gas resources on a working interest basis (67
million barrels of oil equivalent). A proportion of these resources are expected
to become proven and probable reserves in 2006 once commerciality is confirmed.
Final completion of the two transactions, which are subject to normal regulatory
and partner approvals, is expected to take place in early 2006.
Tom Cross, Dana's Chief Executive, commented:
"This is an excellent deal for Dana. It delivers immediate production and
cashflow from two UK fields and will add significant new reserves in both the
near term and medium term in the Company's core areas of the North Sea and
Africa. Dana also gains strategic entry into two world class hydrocarbon basins
in Algeria and Egypt and will be well positioned holding high calibre assets in
each, with the potential to grow further through drilling from late 2005
onwards.
These two transactions are directly in line with Dana's strategy of periodically
crystallising a part of the long term exploration value the Group is creating by
swapping for proven and producing oil and gas assets which are closer to market
and hence will achieve earlier returns.
By trading a minority of its current position in Mauritania, Dana has added two
quality new areas with major upside potential to its international programme and
accelerated the growth of its North Sea gas business. The Group has also
substantially improved the risk/reward profile of Mauritania exploration
drilling for its shareholders, whilst maintaining sufficiently large stakes for
any exploration success to be a Company transforming event. This deal locks in
the value created to date in Mauritania and reduces capital requirements through
the next phase of deep-water exploration drilling to a minimum.
Dana is delighted to be building upon its already successful UK relationship
with Gaz de France, with whom it will now be working across four countries,
Algeria, Egypt, Mauritania and the UK."
For further information please contact:
- Forums
- ASX - By Stock
- HDR
- so no one is interested? not much!
HDR
hardman resources limited
so no one is interested? not much!
-
- There are more pages in this discussion • 23 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)