Dana buoyed by North Sea discovery

Published on Wednesday 14 October 2009 21:18

DANA Petroleum has hailed a new oil and gas discovery in a frontier part of the North Sea, saying it improved the odds of further finds in the area to the west of the Shetland Islands.

The Aberdeen-based FTSE 250 company said the Tornado exploration well, in which it has a 30 per cent stake, had hit hydrocarbons and that a further well was planned to establish the size of the reservoir. Chief executive Tom Cross said the initial signs suggested the reservoir was within its pre-drill expectations of at least 90 million barrels of oil equivalent.

Dana acquired exploration blocks in the west of Shetland region several years ago, but the drilling campaign is only now beginning to ramp up.

"We've always known they were good prospects; we've just been waiting for rigs to come into the area," Cross said, adding that the discovery was "very encouraging" for the nearby Anne-Marie prospect, where drilling begins in March.

Yesterday's announcement was also good news for Aim-listed Faroe Petroleum, which holds stakes in Tornado and Anne-Marie.

Shares in Dana closed up 20p at 1,450p, while Faroe rose 3p to 144p.