Dana Gas signs agreement with KIOEC to partner in Egypt exploration block

Dana Gas will remain as operator of the concession. The concession covers nearly 23,000 sqKm's and is currently in the second exploration period of three years duration. The Komombo Basin is considered to be lightly explored frontier basin with only three wells drilled to date. However, drilling results to date have proven a working hydrocarbon system with significant exploration potential.

The agreement was signed between Dr. Hany Elsharkawi, Dana Gas Egypt Country Manager, and Eng. Badr Al Yehya, Chairman of Kuwaiti International Oil and Environment Company (KIOEC), in a ceremony in Cairo. Technical evaluation of the concession to date includes the interpretation of geological and geophysical data and the acquisition of 516 Km's of 2-D seismic, resulting in the identification of drillable prospects and four addition leads. Drilling is scheduled to commence in mid 2007.

Dr. Hany Elsharkawi, Dana Gas Manager in Egypt said: "We are very pleased with this partnership. The two companies have similar strategies and areas of interest. Our new partner brings additional value in the oil and gas Exploration and Production activities and we are confident that this will help us continue our success in the area. We are looking forward to mutual cooperation in and out of Egypt."

Eng. Badr Al Yehya, Chairman of KIOEC, added: "We hope that this agreement will allow KIOEC to demonstrate its abilities in exploring and improving oil & gas fields. We are sure that this deal between us and Dana Gas will be hugely successful for both parties, and it provides opportunities with regards to cost sharing, mutual benefits and rewards."

KIOEC, is a Kuwaiti Limited company involved in the Oil Industry with activities ranging from exploration, production and oil field services and management. KIOEC is currently participating in a producing asset in Seram Island, Indonesia of 6 thousand barrel expected to increase to 10 thousand of barrel per day by the end of 2007 and before the production of the company reaches 25 thousand barrel per day in 3 years. The company is also evaluating opportunities in North Africa, Middle and Far East and Australia. KIOEC's upstream focus is a good strategic fit for Dana Gas in Egypt and will enhance the exploration success in the Komombo Concession.

Dana Gas' acquisition of Centurion Energy in January of this year has made it one of the highest producers of oil & gas in Egypt, and provided the company with a platform for regional growth in the upstream gas sector of exploration and production across the Middle East. Dana Gas will also benefit from Centurion's further exploration potential in the Nile Delta and Upper Egypt, and has been approached by several of the major international energy companies for potential collaboration in this area, with an active drilling programme announced for 2007.