Dana Petroleum has signed an agreement with Repsol Exploracion S.A. to acquire a 15% working interest in the Tanger-Larache Blocks 1, 2 and 3 offshore Morocco. In return, Dana will assign to Repsol a 3% interest in Blocks L5 and L7 offshore Kenya. Following completion of the transaction, which is subject to normal regulatory and partner approvals, the Tanger-Larache partners will be Dana 15%, Repsol 30% (operator), Gas Naturel 30% and Moroccan state organisation ONHYM 25%. The Block L5 and L7 partners will be Dana 27%, Woodside 30% (operator), Repsol 23% and Global 20%.
The Tanger-Larache blocks comprise a very large offshore area, covering some 5,495 square kilometres, with water depths ranging up to 600 metres. The co-venturers have already acquired some 520 square kilometres of 3D seismic aimed at refining exploration prospects for drilling. Seismic has revealed a number of high-potential prospects within a relatively short distance of the coast. These, coupled with a nearby gas-fired power station and indigenous market for gas, make the blocks very attractive for exploration and development.
Also, Dana has signed an agreement with Tethys Oil AB and Eastern Petroleum (Cyprus) Limited to acquire a 50% working interest in the Exploration Permits resulting from the Bouanane Reconnaissance Contract Licence area, onshore Morocco. In return for being assigned the interest, Dana will pay Tethys and Eastern's share of the costs in relation to acquiring additional seismic over the licence. Following completion of the transaction, which is subject to normal regulatory approvals, the Bouanane partners will be Dana 50% and operator, Tethys 12.5%, Eastern 12.5% and ONHYM 25%.
Tethys and Eastern currently hold a Reconnaissance Contract with ONHYM in the Bouanane block which covers an area of 2,116 square kilometres in north-eastern Morocco, close to the Algerian border. Using existing seismic data the partners have identified a number of very attractive exploration prospects which are analogous to known discoveries in Algeria. Dana plans to acquire further onshore seismic during the first half of 2007 with a target of drilling the most attractive prospect thereafter. Given Dana's previous experience in Morocco in successfully securing the NW Safi licence, it will lead negotiations with ONHYM to agree the full Petroleum Agreement for the Exploration and Exploitation of Hydrocarbons in the Bouanane block.
Commenting on the news, Tom Cross, Dana's Chief Executive, said: "These two deals significantly enhance Dana's position in Morocco and make the Company one of the pre-eminent E&P players in the country. A strategic review of new ventures carried out during 2005 identified Morocco and Egypt as two key areas the Company would aim to enter, due to their stable and attractive fiscal regimes and significant hydrocarbon potential. Following the completion of these two deals, and other ongoing transactions, Dana will have interests in three permits in Morocco and two permits in Egypt, with significant work programmes during 2007. Dana is also actively pursuing additional licences, in these countries, and participating in bidding rounds to further build on this strong position."