Dana makes reserves-doubling Mauritania gas find
(Adds comment on Venture Production (LSE: VPC.L - news) talks, possible takeovers)
By Andrew Callus
LONDON, March 31 (Reuters) - Dana Petroleum Plc (LSE: DNX.L - news) announced a natural gas find off the Mauritania coast on Wednesday that could almost double the British firm's reserves and open up a new opportunity in Mauritanian gas.
The news came with the firm's annual results, which showed net profits up 188 percent at a record 19.6 million pounds ($36.0 million) thanks to doubled production and high oil prices.
Dana (NYSE: DCN - news) uses the cashflow from the mature North Sea to finance exploration there, and in Mauritania, Indonesia and Australia.
Dana estimated the west African find totalled one trillion cubic feet of gas, of which 600-800 million was recoverable. In barrels of oil equivalent terms this is 100-140 million boe.
Dana, which had proven and probable reserves of 123.7 million boe in 2003, said there was "scope for considerable further upside in these estimates".
The Pelican well that had the discovery is on Block Seven of acreage licensed by Mauritania. Dana has a 76.5 percent stake.
"This is something that is going to give us a big lift in the future," said Chief Executive Tony Cross.
Pelican follows the success of a group led by Australia's Woodside Petroleum , which has made three significant discoveries off Mauritania, including the Chinguetti oil field, declared commercial in 2003.
Cross said the gas may be commercialised through liquefied natural gas developments by big firms homing in on West Africa.
Bigger players working off Mauritania include Hardman Resources , which holds 18 percent in Block Seven, and Britain's BG , which bought stakes in Blocks Three, Four and Five from Hardman in February.
Dana's shares were up two percent at 257-1/2 pence at 1120 GMT, in line with other oil stocks.
Cross said the geological nature of the find, as well as its size, was significant in that it showed finds may be made in Tertiary as well as deeper Cretaceous levels in offshore Mauritania. "It's in a different horizon to that discovered by Woodside," he said. "For future wells we have got two targets."
ACQUISITION THIS YEAR?
On February 2, Dana, confirmed it was in merger talks with similar-sized Venture Production about a combination of the Britain's two smallest main-market listed oil explorers.
Four days later talks were terminated.
But on Wednesday, Cross said Dana had also been involved in talks with another party and was still looking at opportunities.
Wonder WHO Dana are talking to!
Tom.
HDR
hardman resources limited
