Dana Acquires Stake in Babbage Gas Field

Dana Petroleum has agreed to terms with a subsidiary of Shell UK Limited to acquire a 40% interest in Block 48/2a in the UK Southern North Sea. This block contains the Babbage gas field, which was discovered in 1989 and will be appraised by a further well in the first quarter of 2006. The block also lies directly to the south of the producing Johnston gas field, in which Dana already holds a 27.78% interest and recently drilled the successful J4 horizontal well which flow tested at 55 million cubic feet of gas per day (mmscfpd).

The Babbage gas field has the potential to contain up to 390 billion cubic feet of gas-in-place in Permian age Rotliegend sandstone reservoir. The Babbage appraisal well will target a crestal area of the reservoir in order to establish reservoir productivity ahead of a development decision. If appraisal is successful, it is expected the field will be moved quickly into development as a tie-back either to the Johnston subsea infrastructure, located some 10km to the north, or directly to the host Ravenspurn North platform, located around 12km to the north-west.

Final completion of the transaction, which is subject to normal DTI and co-venturer approvals, is expected to occur in the near future.

Tom Cross, Dana's Chief Executive, commented:

'Through a series of four separate steps, all concluded since the start of 2005, Dana has built a substantial position in the area surrounding the Ravenspurn and Cleeton gas export infrastructure. Earlier deals securing interests in the Johnston and Monkwell gas fields have been complemented by this move into the Babbage gas field and the award of two blocks contiguous with the Monkwell area in the UKCS 23rd Licensing Round. Dana believes the potential of these assets has recently been highlighted by the successful Johnston J4 well and expects several drilling and development opportunities to emerge. The first of these will be the forthcoming appraisal well in Babbage.'

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