Pete starts RI drilling

Pete starts RI drilling

LONDON (Dow Jones): UK-based Dana Petroleum PLC said Thursday
that in partnership with Premier Oil PLC, Amerada Hess Corp.
(AHC) and Gulf Resources Ltd., it has begun drilling on the
Pangkah production sharing contract (PSC) area in the East Java
Sea, Indonesia.

The prospect is located in a proven hydrocarbon basin, with
"substantial reserves potential," Dana said. It is located in 60
feet of water and is 7 kilometers from the East Java coast, close
to the city of Surabaya.

Dana said that through farm-out agreements with Gulf
Indonesia, it is carried on the drilling costs of the Ujung
Pangkah well, but will retain a 12 percent interest in any
commercial discovery. Dana also has no financial exposure to the
cost of a second well in the 3,500 square kilometer Pangkah PSC,
but will likewise retain its 12 percent interest in the whole
contract area.

In Natuna, in which Dana also has a position, seismic
processing is currently underway and a well is to be drilled next
year. This PSC is located between discoveries offshore Malaysia
and the producing Anoa field operated by Premier.