Dana Ups Stake in Cavendish
Dana Petroleum PLC recently signed an agreement with Gaz De France to acquire a 25% interest in the Cavendish gas field in the UK Southern North Sea, for a cash consideration of $55 million (approximately £28.4 million). This acquisition will increase Dana's working interest in the field from 25% to 50%. It is subject to the usual government and third party approvals.
The Cavendish gas field is currently being developed by drilling three production wells from a minimum facilities platform, which was installed in the summer of 2006. Cavendish is being tied back to the ConocoPhillips operated Murdoch Platform, located some 44km to the south-east. Gas will then be exported from Murdoch through the Caister Murdoch System (CMS) trunk pipeline to the Theddlethorpe Gas Terminal in Lincolnshire, where it will be sold into the UK gas market. First gas production from the Cavendish field is scheduled to begin in spring 2007 at rates of around 100 million cubic feet per day, and production is expected to continue until 2016.
Dana estimates that, on completion of the transaction, the additional 25% interest will add approximately 29 billion cubic feet of North Sea proven and probable gas reserves to the company (5 million barrels of oil equivalent) and the production gain for Dana will be approximately 17 million standard cubic feet per day (2,900 barrels of oil equivalent per day). Therefore, post the deal, Dana's overall production from its 50% stake in the Cavendish field is expected to be around 34 million standard cubic feet per day (5,800 barrels of oil equivalent per day).
Commenting on the news, Tom Cross, Dana's Chief Executive, said:
"The doubling of Dana's stake in the Cavendish gas field builds further upon the
significant position the company has developed in the UK Southern North Sea over
the last 3 years. Dana currently produces oil and gas from a total of 14 fields
and is looking forward to both the Cavendish gas field and the Enoch oil field
adding to this portfolio as they come on stream during the first half of 2007."
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