Dana Hits Paydirt, Discovers Third Oil Field in Rinnes Area

Dana Petroleum has discovered a new oil field with the successful drilling of its well at the South East Rinnes structure in Block 210/24a in the UK Northern North Sea. This is the third oil field discovered by Dana in the Rinnes area and is located just 4km from the Company's operated Hudson producing oil field and only 1km from its Melville oil field.

The Dana operated South East Rinnes well, 210/24a-12, in which the Company has a 64.8% equity interest, was drilled by the Stena Spey semisub to a total measured depth of 7,310 feet (6,546 feet true vertical depth subsea). A comprehensive set of wireline log data was acquired including pressure measurements and oil samples. The well targeted the Lower Brent reservoir sequence in a separate, untested structure between the Melville and East Rinnes oil fields.

The South East Rinnes well found excellent quality sands, as predicted, within the Lower Brent sequence with a full oil column throughout the Brent reservoir and no oil-water contact. Dana decided to sidetrack the well downdip to the north to explore deeper on the structure for the oil-water contact. The sidetrack well 210/24a-12z, was drilled to a total measured depth of 8,040 feet (7,168 feet true vertical depth subsea) and encountered the Lower Brent reservoir sequence, as planned, much deeper than in the initial discovery well.

A comprehensive set of electric wireline logs was also acquired in the sidetrack well, including pressure data and oil samples. The data from the sidetrack well confirmed a total oil column of over 400 feet true vertical thickness in South East Rinnes field, making this a significant new oil discovery for Dana.

Initial wellsite analysis indicates that the South East Rinnes oil is of high quality and similar to the high quality crude at Dana's nearby West Rinnes, East Rinnes and Melville oil fields. It is also of similar quality to the crude oil already being produced by Dana at the nearby Hudson oil field. Given the exceptionally good reservoir found in South East Rinnes and its analogous characteristics to that seen at West Rinnes, which flowed at an equipment restricted rate of 7,800 barrels per day, the South East Rinnes well is not being drill stem tested as the Company has already gathered sufficient data to fully evaluate the discovery and plan for development.

In addition, Dana has completed the drilling of an exploration well on the shallower South West Rinnes structure. This was a more speculative target, some 5km to the south west of 210/24a-12. The South West Rinnes well, 210/24a-13, was drilled to a total measured depth of 5,095 feet (4,936 feet true vertical depth subsea). The well encountered excellent quality Brent reservoir, as prognosed, but the reservoir was water bearing at this location.

The next step is to integrate all the log, pressure and fluid data collected from both the above exploration wells and the South East Rinnes sidetrack. Dana's technical team will then interpret the newly reprocessed 3D seismic dataset for this area, utilizing all the new well information, and then remap the West Rinnes, East Rinnes, South East Rinnes and Melville oil fields to determine the total volumes of oil discovered in this area. At this time, prior to the remapping work, it is estimated that the Rinnes -- Melville -- Hudson area contains between 55 and 100 million barrels of oil reserves yet to be produced, with a current most likely (P50) estimate of 80 million barrels of oil.

Engineering studies have already begun to evaluate the potential development scenarios for this significant oil project. These include tie-back options to nearby existing infrastructure as well as stand-alone development via an FPSO vessel.

Commenting on the news, Tom Cross, Dana’s Chief Executive said, "This is an excellent discovery which has exceeded our expectations. Finding a third oil field in the Rinnes area is an important and very valuable result for Dana. The three Rinnes oil fields, together with the Melville oil field, should now lead to a substantial new oil development in this part of the North Sea."

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