Southern Mauritania, Block 1
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Dana Petroleum reports that the Stena Tay is now on location in Block 1 and has commenced drilling operations on the Faucon-1 well, offshore Mauritania. This is the first of a number of higher-risk but potentially transforming wells which Dana intends to drill on its operated Mauritanian acreage over the next few years. The Faucon prospect is a Cretaceous age channel system sealed against a salt diapir with the potential to contain over one billion barrels of oil in place. Planned total well depth is 4,200 meters below sea level which is expected to be reached in approximately 30 days. Following completion of the recently announced exchange agreement with Gaz de France the partners in Block 1 will be Dana 36% and operator, Gaz de France 24%, Energy Africa (a subsidiary of Tullow Oil) 20%, Hardman Resources 18% and Roc Oil 2%. All of Dana's costs in the Faucon-1 well being carried by Gaz de France.
Offshore Morocco, the acquisition of a 2,150 square kilometre 3D seismic survey over the North-West Safi exploration licence has recently begun. 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% (operator) and Moroccan state organisation 'ONAREP' 25%.
Following the recently announced agreement with Gaz de France to acquire exploration and development interests in Algeria and Egypt, complementing Dana's existing interests in Mauritania, Senegal, Morocco and Kenya, Dana's international operations will now cover six countries. To optimise the rapid growth of this international asset base, Dana continually reviews its portfolio to identify any licences which may fall below its targeted rate of return. As a result of this process, agreement has been reached with the Kenyan authorities to cease discussions regarding an extension to the initial term of Block L10 offshore southern Kenya and to simultaneously relinquish outlying ultra-deep water Block L11. Dana will retain its interest in Blocks L5 and L7 in the northern region of offshore Kenya where a number of exciting prospects have been identified for drilling, starting in 2006. Dana holds an attractive commercial position in L5 and L7, with two thirds of the costs associated with its 30% interest being carried by operator Woodside Energy.