Dana Gas commences drilling campaign in Egypt

Dana GasDana Gas confirmed that it has commenced drilling the Balsam-2 development well in the Balsam Development lease onshore Nile delta. The Balsam-2 well is being drilled with the 2000 HP Egyptian Drilling Company’s Rig #48 and targets the Qawasim formation at a depth of 3200 m. A slanted and fully cored pilot hole will be drilled through the Qawasim reservoir and will be followed by the drilling of a 700 m horizontal section. The well will be the first horizontal well drilled by Dana Gas Egypt, and one of very few drilled in the onshore Nile Delta to date. The well is expected to take approximately 4 months to drill and complete.

The Balsam-2 well is the first in a major drilling campaign of some 30 wells and a large number of work-overs that will be drilled in the next 3 years and forms part of the Gas Production Enhancement Agreement (GPEA) work commitment. In this Agreement, Dana Gas has committed to a work programme in return for the ability to sell the government’s share of incremental condensate production at market rates over and above an agreed no further action decline production forecast. This mechanism is expected to effectively eliminate the receivables balance by end 2018, assuming that no further bullet payments are made to the petroleum sector by the Egyptian Government.

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Map of the Balsam-2 well location within the Balsam development lease, part of the original West El Manzala Exploration Concession (Source: Dana Gas Website)

Dr. Mark Fenton, GM Dana Gas Egypt, commented: “We are very happy to be commencing our drilling operations as part of the GPEA. It represents the culmination of many months of preparation work and planning to assemble the portfolio of targets for drilling in conjunction with preparing our infrastructure to receive this additional gas and condensate. We are particularly proud to be extending our technical capabilities to include the drilling of horizontal wells. Balsam-2 is the company’s first horizontal well in Egypt and is a fitting well to kick off this drilling campaign which effectively targets to develop all the Company’s remaining conventional 2P gas reserves.”

Dana Gas is currently the 4th largest onshore gas producer in Egypt and is firmly committed to pursuing further opportunities in the region, in partnership with local and international energy companies.

(Dana Gas Press Release)

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