Dana Gas announces its first 2011 gas discovery in Egypt

In addition, the well encountered 4.8 meters of net pay in a good quality sandstone reservoir of the El Wastani formation, representing a new pool discovery. On test, the well produced 14.1 million standard cubic feet per day (MMscfpd) of gas with 718 barrels of condensate from the Abu Madi Formation, and 5.9 MMscfpd of dry gas from the El Wastani Formation.

The discovery comes after the announcement of the previous South Abu El Naga-1ST discovery in September 2010, where the calculated reserves estimate is in the range of 50 to 90 billion standard cubic feet (Bcf) of gas, with associated condensate reserves between 1 and 2 million barrels. The Abu Madi development is still expected to be routed to the planned Salma Delta gas plant, currently being designed.

A preliminary estimate of the discovered reserves in the new pool (El Wastani formation) is in excess of 60 Bcf of gas, with a possible upside still under evaluation.

Dana Gas is preparing a separate development plan for this new pool, which will include several appraisal and development wells. The South Abu El Naga-2 dry gas discovery is expected to be tied in to the Company's nearby South El Manzala gas processing plant before the end of 2011. Spare capacity is available in the plant.

Mr. Ahmed Al Arbeed, Dana Gas CEO, said, "As our first discovery for 2011, the South Abu El Naga-2 well highlights our ongoing success in Egypt. Besides being a successful appraisal of the South Abu El Naga Field, it is the twenty-second new pool discovery as a result of the outstanding dedication of our exploration and drilling team in implementing the aggressive campaign launched in 2007. We will actively continue this exploration program throughout 2011."

Dr. Hany Elsharkawi, Dana Gas Egypt President, commented, "The well is an excellent start for 2011. We still have a sizeable portfolio of drillable prospects and our exploration activity will continue throughout the year, as will our development activities. The discovery at the South Abu El Naga-2 well represents a new era of shallow wells that can be drilled at low cost with fast production to meet Egypt's gas production demands."

Dana Gas is currently the 6th highest gas producer in Egypt, a country whose gas reserves has doubled in the past 5 years to over 70 trillion cubic feet, and now produces more gas than oil and is already among the world's top ten exporters of LNG. In 2007 Dana Gas made Southern Egypt's historic first ever commercial oil discovery from its first exploration well drilled in the Komombo Concession. The Company is firmly committed to pursuing further gas investments, in partnership with the national Egyptian companies and other energy companies from the region and internationally.