DONG Gears Up for Appraisal Drilling at Danish Field

DONG Energy and its license partners Bayerngas (30% interest) and the Danish North Sea Fund (20% interest) have decided to carry out an appraisal drilling in the Svane field in the Danish sector of the North Sea.

DONG Energy assumed the role of operator when the company acquired the Danish oil and gas activities of ConocoPhillips in 2007. An appraisal drilling carried out in 2001 by ConocoPhillips indicated the possible presence of a large gas reservoir. However, technical problems in connection with the drilling raised uncertainty about the findings. The owners of the field have now decided to carry out a new appraisal drilling with a view to determine volumes and the possibilities of extracting the natural gas, which is located at greater depth than any other field in Denmark.

The field in question is technically challenging, and holds because of the depth of the reservoir of up till 6,000 meters high pressure and high
temperatures. The costs of the appraisal drilling are therefore subject to uncertainty and is expected to amount to DKK 0.6 - 0.9 billion depending on the drilling results. DONG Energy's share makes up 50%. The detailed planning of the appraisal drilling will take place in 2010, and the license partners will thereafter decide upon the final timetable for the drilling.

"If the appraisal drilling meets our expectations, the field will contribute substantially to the future security of supplies. Furthermore, it opens
perspectives for future exploitation of this type of technically challenging fields on the Danish shelf," said Søren Gath Hansen, Executive Vice President of DONG Energy and responsible for the company's oil and gas activities.