El Basant-2 well boosts company reserves and production potential for 2009

Sharjah, 29 December 2008: Dana Gas, the Middle East's first and largest regional private sector natural gas company, has announced a significant gas and condensate discovery at its El Basant-2 well in the Nile Delta Concession in Egypt.

The El Basant-2 well, located 1.4 kilometres northeast of the El Basant-1 discovery (previously known as El Tawil-1) in the West El Manzala Concession, was spudded on 6 December 2008, reaching a total depth of 3,050 meters and encountered 37 metres of net sand pay with good porosity and permeability in the Qawasim formation.

According to Dr Hany Elsharkawi, Dana Gas country director in Egypt, the cumulative proven and probable reserves in the El Basant hydrocarbon accumulation significantly raises Dana Gas's reserves in Egypt:

"We are very pleased and encouraged by this latest discovery. Combined with Dana Gas's other discoveries this year, it shows that our 2008 drilling campaign was correctly conceived and implemented and therefore on the basis of this success we plan to continue with further  drilling in this concession, where several prospects of similar nature have been identified," said Dr Elsharkawi. "This acreage is particularly attractive to us as we have established production in the area and we are able to bring new discoveries on production quickly and at comparatively low cost.  In addition our gas is sold at a fixed price, provided the oil price stays above $22/bbl. Dana Gas has already applied for a Development Lease, which we expect to be granted soon, and we anticipate a production start-up by the end of March 2009."

Following an extensive testing programme at El Basant-2, Dana Gas plans to transport the hydrocarbons produced from the well through a pipeline to its El Wastani field facilities, which lie about ten kilometres to the north of the well.

Dana Gas is currently the sixth highest natural gas producer in Egypt, and has already made a number of discoveries in the country, including the first commercial oil discovery ever made in Southern Egypt. Dana Gas also has ongoing projects and assets in both the UAE and Northern Iraq, where the Company commenced gas production this past October in its major project in the Kurdistan Region, boosting Dana Gas operated production by over 50%. The company also successfully completed a US$1 billion sukuk offering in late 2007.

"Dana Gas ends 2008 with solid growth in production and activities and a positive outlook for the coming year, despite the global financial crisis," said Mr. Neeraj Agrawal, Dana Gas Finance Director. "Having completed our major fund-raising in late 2007, we are in a healthy cash position to fund project investments, and even the latest fall in global oil prices has not impacted us too badly, given that nearly 70 percent of our current Egypt revenues come from gas sales at fixed prices. The fundamentals of the natural gas industry in the Middle East region remain strong, since it is a core long-term sector in the region's growth."

-Ends-

About Dana Gas
Dana Gas (PJSC) is the first regional private-sector natural gas company in the Middle East, established with over 300 reputable founder shareholders from across the Gulf Cooperation Council (GCC) region, and some 300,000 investors from over 100 nationalities worldwide who submitted applications of over US$78 billion over ten days in the company's regional IPO in late 2005. 

Headquartered in Sharjah in the UAE and listed on the Abu Dhabi Securities Exchange (ADX), Dana Gas already possesses a network of offices in Saudi Arabia, Kurdistan Region - Iraq, Egypt, the UK, and Canada, with further offices opening throughout the Middle East.  Dana Gas currently has assets and projects in gas exploration and production, processing, transportation and marketing in several countries, and aims to play a major role in the rapidly-growing natural gas business throughout the Middle East, North Africa and South Asia (MENASA) Region across the entire gas value chain. 

In addition to its current projects, Dana Gas will be expanding its activities in all elements of the natural gas value-chain, including upstream exploration and production; through the midstream transmission and distribution of gas including LNG trading; and downstream into gas-related industries and petrochemicals.  www.danagas.ae

For more information, please contact:
Wajih Halawa
SAHARA Communications
+971-4-329 8996 / +971-50-240 3357
wajih@saharagcc.com

© Press Release 2008