Dana Petroleum Plc (LON:DNX) this morning reported that the Fin-1X exploration well had discovered a new oil field in the North Zeit Bay Production Sharing Contract area onshore in the Gulf of Suez, in Egypt. The announcement follows the discovery of the Lorcan oil field, which was made just last month in the same PSC area.

Dana holds a 100% stake and operatorship of the Fin-1X well, which was drilled to a depth of 10,038 ft, some 3km from the Lorcan oil discovery announced in June. The well encountered good quality oil bearing sands in the Kareem formation, in line with Dana’s prognosis prior to drilling. During the drill stem test, the Fin-1X well flowed strongly with high downhole pressures delivering an average flow rate of 1,049 barrels of oil per day through a 52/64" choke. The flow rate during this test was restricted by the temporary flow testing facilities and the requirements to truck the produced oil from the desert location. The well has been retained as a future oil producer.

Dana said that the Fin discovery together with Lorcan, which flowed at 4,714 barrels of oil per day and was also constrained by the testing equipment, confirmed the area would be very attractive to develop. A preliminary development plan has already been submitted to the Egyptian General Petroleum Corporation (EGPC) for agreement. Dana estimates that these two discoveries so far in this PSC area have proven up initial reserves of 10-12 million barrels of oil (100% Dana) with the potential for considerable upside beyond these initial proved volumes. Further drilling is planned.

Once the development plan has been agreed with EGPC, an application will be submitted to the Ministry for a development lease. Following the development lease being lodged, the potential for early oil production will be discussed with EGPC. With EGPC's agreement, early production facilities which would allow oil to be exported by road tanker could be installed and operating within one month. The full development plan is to tie production from this PSC area back to the East Zeit oil and gas processing plant, which is situated just 15km to the south east of the Lorcan and Fin oil fields. Dana also holds a 100% working interest in East Zeit, making these developments extremely efficient and commercially attractive.

The drilling rig will now move to…

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