Follow up to Tornado in 2010

Published 20.11.2009 12:06:53 by John Bradbury

Dana Petroleum's Capital Markets Day in London has indicated to analysts and investor further plans for the future of the company including a further well next year in the West of Shetland region to follow up this year's Tornado discovery.

Tornado was Dana's first exploration well in the West of Shetlands and encountered significant volumes of gas and oil.

Underlining the results from the well, Dana said: “Extensive data gathering was undertaken. The partnership group is now considering options for progressing this discovery to commerciality, including the possibility of drilling an appraisal well in 2010,” Dana has indicated.

Also Dana pointed out that Faroe Petroleum plc - in which Dana holds a 27.2% interest, participated in the Tornado well, as well as the other successful West of Shetland exploration well drilled recently on the Glenlivet prospect.

Austria's OMV operated the Tornado exploration well 204/13-1, in October, partnered by Dong Energy, Faroe, and Idemitsu, which hit oil and gas in a Tertiary reservoir. Then a follow-up sidetrack well, 204/13-1Z, also drilled with the Stena Spey drillship encountered 27.43 metres (90 ft) of reservoir thickness, and is the same reservoir at the same depth as the original Tornado discovery.

Analysts from London's Evolution Securities were at the Capital Markets Day hosted by Dana in London at the Tate Modern art gallery. Afterwards, Evolution commented thus: “ Making sense of Dana’s strategy is a breeze compared to interpreting some of the art on display (even with the benefit of a guide.”

Nevertheless, Evo goes on to point out: “More seriously, the exploration led strategy of the group remains at the fore and the company is well funded. From a market perspective what Dana may lack is a single unifying country theme.”

Analysts pointed out that other companies more focused, such as Tullow Oil in Ghana, and Cairn Energy in Greenland and Rajasthan in India, and Afren in Nigeria.

Dana has revealed plans for another 10 to 15 exploration wells over the next 12 months, and the emphasis will be on the UK West of Shetlands, on the UK Southern North Sea, Norway, Egypt, and possibly Guinea if a farm-in deal there is completed with Hyperdynamics.

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