Dana Gas has announced that its annual production rate for 2010 from its Nile Delta Concessions in Egypt is an estimated 42,000 barrels of oil equivalent per day (boepd), an increase of 20% on 2009, with production commencing from seven new fields.
In addition, the Company has continued its exploration success during 2010 with seven new field discoveries in the Nile Delta from eleven exploration wells drilled which has led to a 20% increase in reserves, after allowing for 2010 production, compared to December 31, 2009.
Considering these continued operational successes particularly the discovery of the South Abu El Naga and Salma Delta North fields in September, the Board of Dana Gas has decided to retain its 100% interest in its Nile Delta Concessions and to continue operating them to maximize ultimate benefit for its shareholders rather than proceeding with the proposed farmout.
Dana Gas has now embarked on a new phase of production growth, upgrading existing plants and building new capacity to bring these new fields online as quickly as possible. The planned new gas processing plant to the East of the Nile River will be designed to process 120 million standard cubic feet per day (mmscfpd), a considerable increase compared to the original planned design of 50 mmscfpd, which will contribute significant value as the South Abu El Naga and Salma North discoveries have high liquid content. This, along with an ongoing increase in capacity at its El Wastani Plant, will bring Dana Gas total production to some 400 mmscfpd (67,000 boepd excluding liquids) in mid 2012.
The company is also continuing its aggressive exploration campaign with a 14 well program for 2011; the drilling of first well, Sanabel-1, has commenced targeting the deeper high potential Sidi Salim formation.
On the Komombo Concession in Upper Egypt, Dana Gas along with 50% joint operator Sea Dragon Energy Inc, has produced oil during the year at an average gross production rate of 620 barrels of oil per day (bopd) and is currently producing at approximately 800 bopd. Work is ongoing to increase the productivity of the Abu Ballas formation by fracturing with two fractured wells due to be placed on production during January 2011. During 2010, 480 kilometers of 2D seismic was acquired and processed, and the first exploration well, Memphis-1, commenced drilling in December.
Mr. Ahmed Al Arbeed, Dana Gas CEO, said "Our ongoing excellent exploration performance, with sixteen discoveries in the Nile Delta over the past three years, combined with our year on year production increase of 20% reinforces our view of the remaining potential of this first class acreage and thus confirms to us that retention of our 100% interest will deliver the maximum value to our shareholders. Our production continues to increase, with current production in the Nile Delta at 246 mmscfpd of gas plus 7350 barrels per day of condensate and LPG, a total of 48,000 barrels of oil equivalent per day. We are targeting similar annual increases in production during 2011 and 2012.
"Our team in Upper Egypt continues to work hard to enhance production from the Al Baraka Field with further development drilling planned in 2011, alongside our exploration program to test the vast potential of the Komombo Concession."
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