Dana begins Zora gas field development in Sharjah

Dana Gas said it is moving forward with plans for the exploration of its Western offshore concession in Sharjah, acquired in March under a 25-year concession agreement with the government of Sharjah.

Jan 28th, 2009

Eric Watkins
Oil Diplomacy Editor

LOS ANGELES, Jan. 28 -- Dana Gas said it is moving forward with plans for the exploration and development of its Western offshore concession in Sharjah, acquired in March 2008 under a 25-year concession agreement with the government of Sharjah.

The agreement, which gives Dana Gas a 50% working interest in the project, covers a total offshore area of over 1,000 sq km and includes Zora gas-condensate field in Sharjah, discovered in 1979.

Under the agreement, Dana Gas will drill 3,000 ft of horizontal section in each of the two wells originally drilled by Crescent Petroleum, testing and completing both wells.

The agreement calls for installation of offshore platforms for immediate processing and production, and for transportation of the processed gas via 25 km of offshore pipeline.

The agreement also provides for important exploration works within the concession area, including geological evaluation studies, followed by seismic surveys and the drilling of exploration wells.

Work preparations begin
Ahmed Rashid Al Arbeed, executive director of upstream at Dana Gas, said preparations for work on the concession area are well under way, and that reservoir-related studies on Zora field have been carried out.

"We have retained the services of world-class reservoir specialists to conduct further detailed studies on the potential of the field and to generate the optimum development options," said Al Arbeed.

"We are in the process of placing orders for the equipment and materials necessary for the pipeline and production facilities," he said.

Al Arbeed said Dana Gas is negotiating with three major offshore rig contractors to supply "a jack up rig that will be used for tieback, horizontal drilling, testing, and completion of the two wells."

Dana Gas also is finalizing selection of a major construction yard for fabrication of the wellhead platform jacket.

Dana Gas estimated costs of the development phase of Zora field at $70 million, while costs for further exploration studies and work on one well are estimated at $65 million from 2010 onwards.

Earlier in January, Dana Gas announced that its drilling campaign in Egypt has led to another important gas-condensate discovery at its Salma-1 well in its Nile Delta concession.

The Salma-1 well is the company's second well drilled in the West Qantara concession, about 15 km from Dana Gas's South Manzala gas processing facilities. It was spudded on Dec. 1, 2008, reaching a total depth of 2,231 m.

The first production test on the well was initiated before the end of December 2008. The well penetrated 25 m of net pay in the good quality sandstone reservoir of the Abu Madi formation, and additional reserves are currently estimated at more than 150 bcf of gas.

An additional 4 m of sandstone gas pay was encountered in the shallower Kafr El Sheikh formation, Dana Gas said.

The news of Salma-1 followed the company's earlier report of a discovery of gas and condensate reserves, which it estimated as exceeding 130 bcf of gas, at its El Basant-2 well, also in the Nile Delta concession.

Contact Eric Watkins at hippalus@yahoo.com.

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