DANA PETROLEUM: DRILLING FOR 1 BILLION BARRELS OF OIL

Operational Update

RNS Number:9310V
Dana Petroleum PLC
20 December 2005





PRESS RELEASE

DANA PETROLEUM PLC ("Dana" or "the Company")


INTERNATIONAL OPERATIONS UPDATE


EGYPT - Second Deal Secured


Dana is delighted to announce that it has signed an agreement with Compania
Espanola de Petroleos S.A. ("CEPSA") to acquire a stake in the South Feiran
Concession, located in the Gulf of Suez, offshore Egypt. This deal builds upon
the recently announced agreement with Gaz de France to acquire an interest in
the West El Burullus area of the offshore Nile Delta region of Egypt. Following
completion of the transaction, which is subject to normal regulatory and partner
approvals, the South Feiran partners will be Dana 20%, IEOC Exploration (a
subsidiary of Eni) 50% and operator, and Phoenix Redux Inc. 30%.



The South Feiran Concession covers an area of 349 square kilometres, with
relatively shallow water depths in the range of 50 to 80 metres. The licenced
area is surrounded by significant producing oil fields and associated oil and
gas production infrastructure, including the very large Belayim fields which are
estimated to have contained initial reserves in excess of 2.5 billion barrels of
oil. A 3D seismic survey is now being planned over the high-graded eastern
portion of the concession, with the objective of better defining a number of
potential prospects already identified from earlier 2D seismic data.
Exploration drilling is targeted for 2007.





MAURITANIA - Successful Completion of Exploration Drilling



Drilling of the Faucon-1 exploration well in Block 1 offshore Mauritania has now
been completed with the well reaching a total depth of 13,682 feet (4,170 m).
Final logging operations have been conducted, including the gathering of
sidewall core samples and the shooting of a vertical seismic profile (VSP).



A further 172 feet (52.5 m) of sandstone formation has been intersected since
the intermediate logging programme previously reported over the hydrocarbon
bearing intervals. Whilst there were no significant shows seen in these lower
sands, overall the results are very encouraging with a total of 316 feet (96.5
m) of potential reservoir having been found in this well of which the upper 46
feet (14 m) of net sand is hydrocarbon bearing. The hydrocarbon fluid
composition cannot be finally determined until the downhole pressurised fluid
samples recovered from the well have been analysed in an onshore laboratory,
this is expected to occur during January 2006. Subject to completion of the
recently announced exchange agreement with Gaz de France, the coventurers in
Block 1 are Dana 36% and operator, Gaz de France 24%, Tullow Oil 20%, Hardman
Resources 18% and Roc Oil 2%. All of Dana's costs in the Faucon-1 well will be
free-carried by Gaz de France.





ALGERIA - Four Well Drilling Campaign Started



A new four-well drilling programme has begun in Block 353 onshore Algeria with a
well to appraise the western flank of the Oued Zine gas field. The Oued Zine
field is the largest of the ten gas discoveries made to date in Blocks 352a and
353, with the potential to contain up to 2.5 trillion cubic feet of gas in
place. Two further appraisal wells and an exploration well are planned as part
of the current drilling campaign. Subject to completion of the recently
announced exchange agreement with Gaz de France, the coventurers in Blocks 352a
and 353 are Dana 15%, Gaz de France 60% and operator and Algerian state
organisation Sonatrach 25%.





MOROCCO - Major New Seismic Programme Underway



The acquisition of a 2,150 square kilometre 3D seismic survey over the
North-West Safi exploration licence, offshore Morocco, is progressing at pace
and is now nearly 40% complete. This survey aims to define drilling targets on
a number of prospects identified from a 2D survey carried out in 2004, with a
view to commencing exploration drilling in 2007. The partners in the North-West
Safi licence are Dana 26.25%, Norsk Hydro 48.75% and operator and Moroccan state
organisation ONHYM 25%.





Commenting on Dana's progress, Tom Cross, Chief Executive, noted:



"Dana's international business has moved ahead strongly during 2005.



The recent exchange deal with Gaz de France introduced a strategically important
partner into Mauritania and gave Dana very valuable new assets in Algeria, Egypt
and the UK. This will boost Dana's production and drilling opportunities
significantly and, together with our entry into Morocco earlier in 2005, has
both grown and balanced our international portfolio.



In particular, Dana has gained entry into the prolific petroleum countries of
Egypt and Algeria where the opportunity exists for our team to build a material
oil and gas asset base through both exploration and appraisal drilling and via
further acquisitions. This is demonstrated by Dana securing entry into the
attractive South Feiran Concession in Egypt so soon after the GDF deal.
Drilling has already begun in Algeria and we expect the early acquisition of 3D
seismic data in both our new Egyptian concessions and in our Moroccan licence to
result in exploration drilling in 2007.



The Faucon-1 discovery is a very important result for Dana's licence interests
in southern Mauritania and Senegal, which span three large contiguous production
sharing contract areas. Whilst the information collected so far would imply
Faucon is unlikely to be commercial on a stand-alone basis, it has proven the
presence of hydrocarbons and that the vital combination of petroleum source,
reservoir and trap is working in this vastly under-explored part of West Africa.
Faucon has also demonstrated that significant potential reservoir sand can be
present in the Cretaceous, which could lead to much larger discoveries in this
region. Faucon therefore provides enormous encouragement for the additional
prospects in Block 1, such as Petrel, and also for the future exploration of
Dana's neighbouring licence interests, namely Block 2 immediately to the north
and the St. Louis Block in Senegal which adjoins Block 1 to the south."







20 December 2005





For further information please contact:


Dana Petroleum Plc
Tom Cross, Chief Executive 01224 652 400
Andy Bostock, Technical Director 01224 652 400

College Hill Associates
Nick Elwes 020 7457 2020




This information is provided by RNS
The company news service from the London Stock Exchange
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