Dana Gas makes historic oil discovery in Southern Egypt

The discovery was hailed by the Egyptian Petroleum Minister, H.E. Eng. Sameh Fahmy, who visited the site on location and renamed the new field "Al-Baraka" (meaning blessing). The Minister was accompanied by General Sameer Yousif, Governor of Aswan, and Hassan Akil, the president of the State Company Ganoub Al-Wadi Holding Petroleum Company (Ganope), and the Chairman of Supreme Committee for Petroleum Resources, and by Dr. Hany ElSharkawi, Dana Gas Egypt Country Director.

"We are very excited about the discovery" said Mr. Rashid Saif Al-Jarwan, General Manager of Dana Gas. "These results prove the presence of an oil province outside Egypt's conventional producing areas. This important discovery could have a positive impact on the economic development of the Upper Egypt region. Our forward plan is to work with our partner Ganoub El Wadi (Ganope) to analyze the test results and determine the full value of the discovery in terms of recoverable reserves and productivity of the various reservoirs."

Dr. Hany Elsharkawi, Dana Gas Country Director added that this is the first time for oil to be discovered in commercial volumes in Southern Egypt. The company is very much encouraged by these significant results and plans to continue its aggressive exploration/appraisal program in the area. "We are working very closely with Ganope and the Oil Ministry to bring this oil on production as early as possible utilizing the existing transportation and refining facilities."

The El Baraka-1 well was drilled by Dana Gas' Upstream Division, Centurion Petroleum Corporation, to a Total Depth of 8712 feet and the well penetrated several oil bearing zones. Testing of the Early Cretaceous Abu Ballas Formation produced approximately 150 barrels of oil per day from a 39 foot perforated interval.

The recovered oil has a specific gravity of 37° API with a wax content similar to the crude oil currently being produced and exported in large quantities in Sudan. Three additional intervals were also encountered in the deeper Early Cretaceous section and recovered various oil volumes on test. Oil reserve estimates of the various zones of this discovery are currently being evaluated.

The Komombo concession is located 700 km from Cairo and 320 km from the closest refinery at Assiut. It is currently envisaged that the early production scheme from this discovery will include transportation of the crude oil by rail road or Nile river barges to the Assiut refinery to the North.

Dana Gas is currently the 6th highest natural gas producer in Egypt, a country whose gas reserves have doubled in the past 5 years to over 70 trillion cubic feet. Dana Gas aims to drill 12 wells by the end of 2007.