Dana Provides North Sea Operations Update

Dana Petroleum provides an update on its North Sea operations, which are focused on low risk field developments scheduled to double the Company's average annual production to around 40,000 barrels per day within the next 2 years.

Southern North Sea Gas Fields

The Johnston gas field extension project was successfully completed and brought on stream towards the end of November. Although the start of production was later than anticipated, the project is performing well and has resulted in a more than doubling of the total Johnston field production potential. The field is now able to comfortably fill its production capacity of around 70 million cubic feet per day of gas at the host Ravenspurn North platform.

In the Anglia gas field, the Noble Julie Robertson drilling rig has arrived on location to drill the 48/18b-BC appraisal well from the Anglia subsea template. If successful, this well will be immediately completed as the B3 production well, adding both new reserves and production to Anglia.

Further infill well locations in both the Johnston and Anglia fields have been identified for drilling later in 2006. Dana's interest in the Johnston field is currently 49.9%, including the incremental 22.1% interest being acquired through the recently announced asset exchange agreement with Gaz de France. Dana's 25% interest in the Anglia field is also being acquired through this agreement.

Following the Anglia well in 1Q 2006, the Noble drilling rig will move to the undeveloped Babbage gas field, in which Dana recently acquired a 40% interest from Shell, to drill an appraisal well to the 48/2a-2 discovery. The well will target a crestal area of the reservoir in order to confirm 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. The Babbage field has the potential to contain up to 390 billion cubic feet of gas-in-place in Permian age Rotliegend sandstone reservoir.

To the west of Babbage, the acquisitions from BP of a 100% operated interest in the exploration sub-areas of UK Southern North Sea Blocks 42/29 and 42/30 and an 81.28% interest in the exploration sub-area of Block 47/5c have now been completed. All three of these blocks lie directly to the East of the Cleeton and Neptune field gas transportation and production infrastructure. Dana now intends to conduct further studies and reprocess existing seismic data with a view to drilling an exploration well to test the Colden Parva prospect. Development options for the Monkwell gas field, located in Block 42/29 (Dana 100%), are also under review. Originally discovered in 1968, Monkwell was production tested at rates of up to 27 million cubic feet per day of gas during an appraisal campaign in 1989/90.

In the Dutch sector, the F16-E gas field (Dana 1.2%) was brought on stream in late November and is now producing gas at a rate of around 90 million cubic feet per day from two wells. Two further wells remain to be drilled and brought on stream over the next few months.

Central North Sea Oil Fields

In the Greater Kittiwake Area (Dana 50%), the Mallard field has been successfully repressurised via the new water injection well drilled earlier in the year, thus allowing oil production to be brought back on stream in recent weeks. Although Mallard oil production recommenced later than originally planned, the reservoir performance since it came back on stream has been well ahead of expectations with rates of up to 13,000 barrels of oil per day achieved.

The Gadwall oil field came on stream in 2Q 2005 and has also performed well, indicating oil-in-place volumes at the top end of the range of expectations. A water injection well is therefore now being drilled, with the objective of maintaining production levels and increasing the oil reserves being recovered from Gadwall.

The Mallard and Gadwall oil fields are tied back to the host Kittiwake Platform (also Dana 50%). In order to increase average production output, by improving operational uptime, a single anchor loading ('SAL') oil export system has now been installed and commissioned at Kittiwake. This SAL has replaced the less efficient loading buoy and export tanker arrangement previously used. The new system has greater resilience to adverse weather and therefore the operational performance and uptime for all 3 producing fields in the Kittiwake area should be significantly improved, particularly during the winter months.

Northern North Sea Exploration

The exploration well in Block 211/22a (Clachnaben) found the main Brent sandstone target to be present as prognosed. Although minor oil shows were observed, the reservoir was found to be predominately water-bearing and the well is therefore being plugged and abandoned. Dana's technical team continued to work the data from this area right up to the point of drilling and determined this prospect to carry more risk than other North Sea wells Dana is planning for early in 2006. Therefore Dana decided to redirect funds to the important forthcoming appraisal wells in the Babbage and Anglia gas fields and thus significantly reduced its cost exposure to the 211/22a well by farming out just ahead of drilling.

Record Group Production Capacity

With the Johnston and Mallard fields now fully on stream and a number of the Company's North Sea fields producing above forecast, Dana's overall production capacity has now reached 30,000 barrels of oil equivalent per day (boepd) when all fields are flowing. This is a record high for the Company.

Completion of the exchange agreement with Gaz de France is expected during 1Q 2006. This will add both Anglia and additional Johnston gas production, which will boost Dana's overall capacity further. Looking at the projected out-turn for 2005, the later than anticipated start of production from the Johnston extension project and the Mallard field is likely to result in average production for the latter part of this year being slightly below previous expectations. Average production for the whole of 2005 is therefore now expected to be in the range of 19,000 to 19,500 boepd. Given the high level of development activity offshore, the final figure will be dependent on the production uptime that can be achieved in December.