Dana Gas makes significant new gas discoveries in Egypt

Appraisal drilling will be conducted on both discoveries which are located on the West El Manzala Concession, operated by Dana Gas.

The company has already filed a declaration of commerciality and development plans for the two discoveries, which will be tied in to the nearby pipelines also owned by Dana Gas.

Mr. Rashid Al Jarwan, Executive Director and Acting CEO of Dana Gas, said, "Our latest two discoveries confirm the Nile Delta as a prolific hydrocarbon-bearing basin. Dana Gas remains fully-committed to the long term development of Egypt's gas industry and its essential role in fuelling the nation's economic growth."

Dr. Patrick Allman-Ward, Dana Gas Egypt General Manager, commented, "These two new wells mark an excellent results to 2012 drilling in the Nile Delta. We still have to conduct appraisal drilling to confirm the full extent of the new fields, but as they are near existing infrastructure, we plan to accelerate their development and maintain the long-term growth of our production in Egypt."

The Balsam-1 well encountered 51 meters of net pay in a good-quality sandstone reservoir of the Qawasim formation at high pressure, indicating high deliverability from the field.

Production testing yielded 10 million standard cubic feet per day of gas on a 20/64-inch choke and more than 1,000 barrels per day of liquid condensate. The two new fields have the highest liquid yield of any gas field discovered in the area so far.

The estimated reserves for Balsam-1 are between 76 to 436 billion cubic feet (BCF) of gas with between 2.5 and 9.4 million barrels of condensate (MMBO). The estimated reserves for the Alyam-1 discovery are between 8 and 66 BCF and between 0.2 and 1.3 MMBO.

The higher range of the estimates is within the vertical closure defined by fluid contacts, and assumes continuity of the reservoir, which will depend on the results of planned additional appraisal drilling.

The Balsam-1 and Alyam-1 discoveries in West El Manzala are adjacent to the El Basant Field and its associated pipeline network, operated by Dana Gas. They follow two other discoveries in 2012 by Dana Gas:

•West Sama-1 in the West El Qantara Concession, a dry gas discovery in the Kafr El Sheikh formation for which a development plan has been filed.

•West Al Baraka-1 well on the Komombo Concession which found a new structure nearby the Al Baraka field, outside the development lease.

In October 2012 The Company announced the commencement of Dana Gas' joint-venture, the Egyptian Bahrain Gas Derivatives Company (EBGDCo) NGL extraction plant at Ras Shukheir in Egypt.

EBGDCo's average gas intake rate has reached 75 MMscfd and four cargo shipments of propane have been exported. When fully operational, the plant will extract 120,000 tonnes per annum of propane & butane from a gas stream of 150 MMscfd.

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 is among the world's top ten exporters of LNG.

The Company is firmly committed to pursuing long term partnership with the national Egyptian companies and other energy companies from the region and internationally.