Firstly, Dana will acquire a 6.25% interest in the Block 2 Production Sharing Contract ('PSC') offshore Mauritania, with effect from 1 July 2004. In exchange, Dana will assign a 5% interest in the Block 7 PSC offshore Mauritania to Woodside. Woodside will additionally pay a cash consideration of US$100,000 to Dana and carry Dana's share of future seismic and drilling costs up to an amount of US$1.44 million. The completion of the assignments remains subject to the normal government, regulatory and partner approvals.
The Dorade-1 exploration well was spudded in Block 2 earlier this month by the West Navigator drillship as part of a top-hole batch drilling campaign. As planned, the well was subsequently suspended on 15th September 2004 having reached a depth of 2,352m, some 70m above the target horizon. It is expected that the potential reservoir section of the well will be drilled in the fourth quarter of 2004 when the well is re-entered using the Stena Tay drilling rig.
Secondly, Dana has invited Woodside to become a strategic exploration partner offshore Ghana, by granting Woodside an option over one half of Dana's interest in the Western Tano Basin. Woodside's option to join Dana remains subject to the completion by Woodside of a study of the exploration potential of the region and the conclusion of ongoing discussions with the Ghanaian authorities to extend the term of the Western Tano Petroleum Agreement to accommodate further deepwater exploration.
Finally, Dana has agreed to assign a 10% interest in the Block 5 and Block 7 PSCs offshore Kenya to Woodside in exchange for the assignment to Dana of a 10% interest in the Great Australian Bight exploration permits EPP 28, EPP 29, EPP 30 and EPP 31 offshore South Australia. In addition to the normal government, regulatory and partner approvals, the completion of these assignments remains subject to the completion of due diligence by Dana, and also to Woodside and Dana entering into a fully termed drilling services contract whereby Woodside will drill the Petrel-1 well in Block 1 offshore Mauritania on behalf of Dana and its Block 1 co-venturers as part of the Woodside 2004/05 drilling campaign.
Dana's Chief Executive, Tom Cross, commented:
'This deal crystallizes Dana's African exploration drilling plans for the next 12 to 18 months, with three wells now confirmed. These will test two important prospects offshore Mauritania, namely Dorade and Petrel, and a major first structure in Block 5 offshore Kenya. If results are encouraging, two further high-graded targets could be drilled within this period, at Faucon in Mauritania and in Block 7 Kenya.
We are delighted to be increasing our African collaboration with the Woodside exploration team, which has already proved successful at Pelican and in Kenya, and look forward to working as a co-venturer in the Great Australian Bight.'
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