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Dana Petroleum ramps up production

Fiona Bond
19.11.09 10:29


Oil explorer Dana Petroleum (DNX) has ramped up output to 42,000 barrels of oil per day in the last three weeks, putting it firmly on track to hit its yearly production targets.

The FTSE 250 group said it expects to reach a 2009 level of around 39,000 barrels of oil per day (boepd) after pushing ahead with an ambitious exploration programme. Dana has averaged approximately 38,200 boepd so far this year.

In its interim statement, the company, whose focus lies primarily on the North Sea and Egypt, said it expects to drill a total of 18 exploration wells this year, and has completed drilling on four exploration prospects and two sidetrack wells in the six months to 19 November.

The first of these wells on the Tornado Prospect in Scotland proved a coup for the company after it discovered significant volumes of gas and oil.

However, its three further attempts were less successful. In Norway, an oil discovery was made on the Jetta prospect but due to sub-standard quality and close proximity to Dana's producing Jotun field left its commercial viability in jeopardy.

Exploration attempts in the Gulf of Suez, Egypt and the Troll prospect in Norway also proved redundant.

Following a flurry of disappointing findings, Dana is pinning its hope on the Papyrus exploration well, offshore Nile Delta in Egypt which is in the process of being drilled. The aim of the well, expected to be completed by the close of the year, is to find additional gas volumes in the area in order to optimise development planning.

Once completed, work will begin on the much larger Bamboo prospect which will target deeper, high pressure gas reservoirs with the hope of opening up significant prospectivity in the block.

"Good progress is being made on the three key development in which Dana is currently participating," the company said.

It is also embarking on further drilling programmes in Egypt and has bid for a number of Norwegian licences.

As a result, Dana's overall 2009 capital investment programme has remained within its guidelines of £240-255 million.

Next year will welcome the first production from the Babbage field development and mark a first full year of production from the fields which joined the group through the Bow Valley acquisition earlier this year.

Dana said its exploration programme for 2010 will be refined over the coming weeks, with key wells already scheduled for prospects at Bamboo in Egypt and Anne Marie in the Faroe Islands.

The company failed to touch upon recent rumours naming it is a possible takeover target for oil titan BP.

Dana's shares were marginally up at 1,300.5p.

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