Lloyds List: Dana swap deals and link-ups raise North Sea profile: Oil independent targets a rise in production to 21,000 bpd by the end of this year and 28,000 bpd by the end of 2005, writes Martyn Wingrove (ShellNews.net)
Oct 05, 2004
DANA Petroleum is building up its North Sea oil production through swap deals and participation in new development projects.
The Aberdeen-based oil independent has raised its production this year to 18,000 barrels of oil equivalent per day and is targeting a rise to 21,000 bpd by the end of this year and 28,000 bpd by end 2005.
Its latest asset swap with US oil firm Amerada Hess is giving the company operatorship of the Hudson subsea field in the northern sector, in return for a stake in an Indonesian gas project.
This alone should add around 4,000 bpd of production to Dana, making the northern North Sea a core area for the company.
'Our strategy is to be exploring internationally and monetise success. At Pangkah, Indonesia, we trebled its value from drilling in the last 12 months and this value is now paid in UK oil,' said Tom Cross, chief executive of Dana.
Dana will hold a 47.5% stake in Hudson and has a 27% interest in the adjacent Melville discovery, which is to be appraised before the end of this year. If successful, Melville could be tied back to Hudson, which produces through Shell's Tern platform.
'We will drill Melville in the next couple of months and have increased our stake by buying out Shell and Esso. We have identified a few infill drilling locations on Hudson,' said Mr Cross.
Dana also has an interest in Total's Otter subsea field in the northern sector, where the partners are considering an infill drilling programme.
In the central North Sea, Dana has interests in the Banff, Claymore and Caledonia fields and in the Greater Kittiwake area, where the Gadwall field is set to be developed early in 2005 after gaining government approval last month.
Another field development at Goosander, plus possible appraisal wells on the Wagtail and Whinchat discoveries, are in the pipeline in this investment area.
Dana is a partner on Canadian Natural Resources' Banff field, where the two companies are pushing forward the gas reinjection project, with gas coming from the nearby Kyle field being used to improve Banff's output. Gas reinjection is expected to start this month.
There are also exploration prospects in this area: 'We have pushed for drilling the McDuff prospect from the Banff template so it would be easy to bring on-stream if successful,' said Mr Cross.
Dana's own operated project is Barbara in block 23'16c, where it bought out Amerada Hess for $7.5m and has a 80% stake.
'Now we are in the driving seat and plan to drill a step out well. Barbara could go a lot deeper and could be quite big,' said Mr Cross.
The discovery is estimated to hold 120bn cu ft of gas and 4m barrels of condensate reserves, based on a single well and could be appraised in 2005.
It lies close to Shell's Phyllis discovery, which the oil major is appraising this month.
In the southern North Sea, Dana is participating in RWE Dea's Cavendish gas project, where contractual negotiations are holding up sanction of a platform project.
Part of the confusion is renaming the Cavendish East field as Kepler and including it into the development plan as a subsea tie-in. The partners hope to sanction the project in November, three months later than planned.
In the Dutch sector, the Aberdeen-based oil independent is a partner on Wintershall's F16-E gas project, where a platform and export pipeline are to be installed next year and first production is expected early in 2006.
Dana expects to participate in ten exploration wells in 2005, seven of these in the North Sea, including the E18a-6 probe in the Dutch sector.
In the UK, there are six wells planned including wells on the Wagtail or Whinchat discoveries and one on the Fiacre prospect near Barbara, said Mr Cross.
There could also be a well on the West Cavendish prospect on licences gained in last year's licence round, plus wells on McDuff and Banff Deep.