Dana Increases Stake in Barbara Field Area
Dana Petroleum has completed a number of recent commercial transactions and operational events which have enhanced the Company's near-term North Sea exploration and appraisal program.
Firstly, Dana has agreed to a farm-in with Shell U.K. Limited and Esso Exploration and Production UK Limited, an ExxonMobil subsidiary. Under this agreement, Dana will drill a well in an area of UK North Sea Block 23/16b into which the Barbara gas-condensate discovery is mapped to extend. The well will appraise the extent of the original discovery made by Dana and its coventurers with the 23/16c-8 exploration well in the neighboring block. In return for drilling the well, Dana will be assigned a 50% interest in, and operatorship of, the Barbara extension-area within Block 23/16b.
Secondly, Dana has agreed a two-for-one farm-out to Endeavour Energy UK Limited ('Endeavour') whereby Endeavour will fund 40% of the cost of an exploration well to test the Fiacre prospect in UK North Sea Block 23/11, which lies directly to the north-east of the Barbara field. In return, Endeavour will be assigned a 20% interest in the Fiacre sub-area of Block 23/11, which specifically excludes the mapped extension of the Barbara field into 23/11. Dana will therefore pay 40% of the Fiacre well cost whilst retaining a 60% interest in, and operatorship of, the block.
Under the terms of the agreement with Endeavour, Dana has also been granted the reciprocal right, effective until the end of 2006, to participate on a similar 'two-for-one' basis for up to a 20% working interest in Dana's choice of up to two UK North Sea exploration or appraisal wells in which Endeavour has an interest.
Both the forthcoming Barbara appraisal and Fiacre exploration wells will be drilled as part of Dana's 2005 North Sea operated program. The Bredford Dolphin semi-submersible drilling rig has been contracted for this work with the Barbara appraisal well expected to start in July. This will be followed by the Fiacre exploration well and subsequently, the Clachnaben exploration well in Block 211/22a, in which Dana built a majority interest earlier this year.
A further exploration well has also been approved in the Netherlands sector of the North Sea, to test the E18a-DF prospect. This well will follow completion of the adjacent F16-E gas field development which is now due on-stream in October 2005, some two months ahead of schedule.
Tom Cross, Dana's Chief Executive, commented:
'The four North Sea wells we have confirmed today follow on from the Melville oil discovery, drilled in March. In addition, an appraisal well is being considered on the Wagtail discovery, in the Greater Kittiwake Area, towards the end of the year. We therefore anticipate drilling a total of six North Sea exploration and appraisal wells in 2005, targeting some 50 million barrels of reserves net to Dana.'
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