Dana Welcomes New Partner to Mauritania Offshore Program

Dana has signed a farm-in agreement with Wintershall in respect of Block 8 offshore Mauritania. Under the terms of this agreement Wintershall will pay all of Dana's costs through to the end of the current exploration period. This will include the acquisition, processing and interpretation of a major 3D seismic survey. Wintershall will be assigned a 38.5% interest in the Block 8 PSC, and the partnership post assignment of the farm-in interest will therefore be: Dana 41.5% and Operator; Wintershall 38.5%; Hardman Resources 18%; and Roc Oil 2%. Roc Oil retains its existing option to acquire a further 3% interest from Dana after the drilling of the first exploration well on Block 8.

Operations have now commenced to acquire an 1,800 square kilometer 3D seismic survey in Block 8. The survey is being performed by PGS Exploration (UK) Limited using the high capacity 3D vessel M/V American Explorer and is expected to take approximately 60 days to complete. The objective of the survey is to identify drilling targets within a number of very large carbonate reef prospects highlighted by the existing 2D seismic data.

Dana is also pleased to report that following the recent Pelican gas discovery in Block 7, Woodside Mauritania Pty Ltd. ('Woodside') has exercised its option to become a coventurer in the Block 7 PSC. This option was awarded to Woodside in 2003, when it acted as drilling services contractor for the Pelican-1 well, as an incentive to achieve certain challenging drilling cost reduction targets. Subject to final audit of the Pelican-1 well costs, the interest earned by Woodside is expected to be 10% (the maximum possible under the terms of the option) with pro-rata contributions from all the coventurers. The future working interests in the Block 7 PSC are therefore currently expected to be Dana Petroleum 68.85% and operator; Hardman Resources 16.20%; Woodside 10.00%; and Roc Oil 4.95%.

Commenting on the news, Tom Cross, Dana's Chief Executive, said:

'Dana is pleased to be accelerating the exploration of Block 8 and to welcome Wintershall as a new co-venturer. The geology and therefore the exploration challenges in Block 8 are quite different to Dana's Blocks 1 and 7 to the south. We have therefore decided to take a more measured investment approach in Block 8 and bring in a partner whose experience in analogous areas of North Africa will benefit the joint venture.

We are also delighted to welcome Woodside to the Block 7 group. Woodside's success in its own operated blocks offshore Mauritania will provide valuable input to the future exploration of Block 7 and the appraisal of the Pelican discovery.'

Dana is a participant in and operator of three production sharing contracts offshore Mauritania (Blocks 1, 7 and 8) with a combined area of approximately 34,500 sq. km, equivalent to over 150 North Sea Blocks.

The Pelican-1 exploration well, located in the southern part of Block 7, was the first well drilled by Dana offshore Mauritania. The well encountered two significant gas accumulations with minimum gross thicknesses of 500 feet and 125 feet respectively in Cretaceous age sandstone. Reservoir fluid samples indicate an oil-associated gas with the possibility of a significant oil leg below the lower of the two gas accumulations. Preliminary calculation of hydrocarbon volumes in the Pelican structure suggests approximately one trillion cubic feet of gas in place with technically recoverable reserves estimated to be in the range of 600 to 800 billion cubic feet (bcf). As the base of the hydrocarbon-bearing interval was not encountered in Pelican-1, there is scope for considerable further upside in these estimates.

The Pelican discovery continues the recent regional success offshore Mauritania, where a Woodside Energy led group has made three significant oil and gas discoveries (Chinguetti, Banda and Tiof). The Chinguetti field has now been declared commercial following a successful extended well test in 2003 and this is expected to lead to the establishment of permanent oil production offshore Mauritania by 2006.

Dana's next exploration well offshore Mauritania will target the Petrel prospect in Block 1, which has the potential to contain between 400 and 800 million barrels of oil in place. The Petrel-1 well is expected to be drilled late in 2004 or early in 2005.