Dana Gas announces important gas discovery in Egypt

The "Al Tawil-1" exploratory well commenced drilling on September 5, 2008 and reached a total measured depth of 3163 meters in the Qawasim formation. The well is located in the West Manzala concession, approximately 15 km south of Dana Gas's El Wastani gas processing facilities.

The Al Tawil-1 well encountered 34 meters of net hydrocarbon pay in the Qawasim sandstone reservoirs with excellent porosity and permeability. Upon testing, the well flowed at a daily rate of 23.5 million standard cubic feet of gas and 1027 barrels of condensate (totaling approximately 5000 barrels of oil equivalent - boe - per day).

The added recoverable reserves, resulting from the successful drilling of the well, are currently estimated at 90 billion cubic feet of gas (16 million boe), in addition to 4 million barrels of associated condensate, representing a 20% increase to the current reserves of Dana Gas in Egypt. Plans are underway to determine the optimum development scheme for the new discovery. Additional exploratory wells targeting similar objectives will be drilled in the West Manzala and the West Qantara concessions in 2008 and 2009.

Ahmed Rashid Al Arbeed, Executive Director of Upstream at Dana Gas, commented on the new Al Tawil-1 well by saying, "This is an important discovery which proves the high potential of the Qawasim formation, resulting in significant reserves addition to the company. The exploration program in Egypt has been very successful so far, and we are looking forward to more discoveries before the year's end."

Mr Al Arbeed added, "We are very excited about the results in Al Tawil-1, as they significantly enhance the economics of the ongoing drilling project. Additional seismic interpretation and drilling activities are being planned for the remainder of 2008 and throughout 2009 to increase the proven reserves and production rates as part of the exploration and development plans for the area."

Meanwhile, Dr Hany Elsharkawi, Dana Gas Egypt Country Director, said that Dana Gas had recently completed a successful well workover program in the Kom Ombo concession in Upper Egypt. "A hydraulic fracturing of the Al Baraka-1 well and additional perforations in the Al Baraka-2 appraisal well have resulted in a significant increase in the production rates of Al Baraka oil field," he explained.

Dr Elsharkawi noted that Dana Gas was the first and only oil producer in Upper Egypt, and expressed his expectations of a positive impact on the local community as a result of the company's success in the area.

Dana Gas is the sixth highest natural gas producer operating in Egypt today. A report by the Middle East Economic Survey (MEES) confirmed that Dana Gas was the only private company from the region to make new Middle East oil and gas discoveries in 2007. The new Al Tawil-1 well is part of an aggressive drilling project announced by Dana Gas earlier this year, covering 15 exploration wells and four development wells.

Dana Gas is currently also leading a consortium to build and operate the Gulf of Suez Gas LPG Plant, in partnership with the Egyptian Natural Gas Holding Company (EGAS) and the Arab Petroleum Investment Corporation (APICORP).