Dana Gas production in Egypt climbs 20% as newly discovered fields are coming on stream

Total production in Egypt is now running at 35,000 barrels of oil equivalent per day (boepd), a 20% increase on the average rate achieved during 2008.

A second well has been drilled on the Sondos dry gas discovery which has been completed and tested at 11.5 MMscfpd through a 32/64" choke. Work is now progressing to bring the Sondos discovery on stream through Dana Gas' South El Manzala gas treatment facilities with production expected to start in June 2009. At the same time work is ongoing at the El Wastani gas plant with the objective of increasing throughput to 180 MMscfpd. These two projects will bring Dana Gas Egypt's gas production close to 200MMscfpd.

The Company is proceeding with its aggressive exploration campaign and since May 2008 has completed the drilling of 10 exploration wells with 5 discoveries, with 4 wells currently drilling. During the first quarter of 2009 the Shahin and Narges exploration wells, drilled at a cost of $23m, did not encounter commercial quantities of hydrocarbons and have been plugged and abandoned.

Commenting on the ongoing exploration programme and rapid build up in production, Dana Gas newly-appointed Chief Executive Officer, Mr. Ahmed Al-Arbeed, said:

"This exploration programme is yielding excellent results and, although we have had two dry holes, our success rate remains well above the industry average. Bringing exploration discoveries on stream within just a few months of their discovery maximizes their value and I am delighted that our team is being able to deliver this value so rapidly. Our target in Egypt is to be producing around 40,000 boepd by the end of 2009, an increase of more than 25% compared to the rate we achieved at the end of 2008."

Dana Gas Egypt's Country Director, Dr. Hany Elsharkawi, explained that the exploration programme is being progressed with great dedication and diligence. "The result of each well increases our substantial well data base which, in turn, enables us to refine our interpretation of the extensive 3D seismic volume and increase confidence in our choice of drilling locations."

"We have significant exploration potential in over 100 mapped prospects on our Concessions and we will continue to drill selectively whilst closely monitoring our finding costs. Part of our drive to save costs and increase efficiency in the Company has included diverting a drilling rig to our operations in the Kurdistan Region of Iraq where we are drilling on the Khor Mor and Chemical gas fields." he said.