Dana Petroleum farms out Australia licence

Independent oil and gas company Dana Petroleum today said it has agreed a 3-for-1 farm-out deal on exploration licence offshore from Western Australia.

Under the deal, Dana, which has operations in gas fields off the west coast of Ireland, will be released from all costs relating to the next exploration well to test the Fiddich prospect.

Dana farmed-out the licence to a subsidiary of Australian independent Voyager Energy.

Under this agreement, Voyager will earn a 10% interest in the licence - increasing its stake to 15% - by paying all costs associated with Dana's current 30% stake from January 1 2004 through to the completion of operations on the well.

Well operator Apache Energy, which holds a 28.75% interest in the licence, plans to start drilling on May 2004.

License operator Origin Energy, which also holds a 28.75% stake, estimated mid-case reserves potential of the Fiddich prospect to be about 60m barrels of oil, with 12m barrels net to Dana, with the top estimate as high as 100m barrels, of which Dana would receive 20m barrels net.

Norwest Energy holds the remaining 7.5% holding.