Dana Gas Unlocks 86 Billion Cubic Feet of Gas Onshore Egypt

Nile Delta
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Dana Gas, the Middle East's first and largest regional private sector natural gas company, has announced two more significant gas discoveries -- Faraskur-1 and Marzouk-2 -- in one of its concessions in the Egyptian Nile Delta. Together, the two wells are expected to add 86 billion cubic feet (bcf) of gas to the company's Egypt reserves.

The Faraskur-1 discovery, which is alone expected to add up to 73 bcf to the company's Egyptian reserves, is located in the West El Manzala Concession. The well was spudded on August 31, 2009, reaching a total depth of 2,900 meters, on September 27, 2009. The well found 21 meters of gas in the Upper Abu Madi formation, and additional minor amounts in the Kafr El Sheikh and Lower Abu Madi formations. The Upper Abu Madi pay zone tested 12.2 million standard cubic feet per day (mmscf/d) of gas and 243 barrels per day (bbl/d) of condensate.

The Marzouk-2 well, also located in the West El Manzala Concession, was drilled to a total depth of 3,995 m and found gas in three zones. The upper zone, within the Messinian Abu Madi formation, yielded a gas and condensate discovery with a net pay of 6.7 meters and tested 10 mmscf/d of gas. The lower two zones, in the Sidi Salim formation, yielded non-commercial quantities of gas. Despite the non-commercial gas rates achieved from the two lowermost layers these findings are important to Dana Gas's future exploration campaign in Egypt, as they prove the presence of an active hydrocarbon system in a formation where the company has determined the presence of several other prospects. The estimated reserves for the Abu Madi zone are 13.4 bcf.

Commenting on these new discoveries, Dana Gas Chief Executive Officer, Ahmed Al-Arbeed, said, "The discoveries at the Marzouk-2 and Faraskur-1 wells represent the eighth and ninth discoveries from our 2008–09 drilling campaign in the Nile Delta. The extensive planning that went into the drilling campaign is continuing to yield very positive results, boosting Dana Gas' production and profitability."

Dr. Hany Elsharkawi, President of Dana Gas Egypt, commented on the development plans for these discoveries: "For the tie-in of Faraskour-1, two main options are currently under consideration: to connect the well to the Wastani field to the northwest, by crossing the Nile river, or to connect the well to the new plant (Salma-Tulip) to the southeast, which is currently the subject of a feasibility study. As to Marzouk-2, the well has been temporary abandoned and will be completed later. It will be available for production as soon as the Development Lease is granted."

Dana Gas is the sixth ranking natural gas producer in Egypt, and ended 2008 with a daily production rate from its Egyptian operations of 31,640 boe, a figure that has already increased to over 37,000 boe this year. The Company has made a number of significant discoveries in the Nile Delta in Egypt during 2008 & 2009, in addition to the first ever commercial oil discovery in Southern Egypt made in 2007.


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