UK: Dana Petroleum Enjoys the Most Successful Phase of Growth in the Company*s History

Dana Petroleum, the independent oil and gas exploration and production company focused on growth through international exploration and the development of production in the North Sea and Egypt, reports its interim results for the first half of 2010.

HIGHLIGHTS

Strong Financial Performance

* Total income for half year of £266.9 million, comprising revenue of £185.7 million and underlifted production of £81.2 million

* Pre-tax profit of £82.0 million, up 274%, and exceeding 2009 full year equivalent

* £191.5 million cash generated from operations, up 221%

* Net bank debt of £8.6 million and convertible debt of £121.8 million at 30 June

* Significant financial flexibility due to headroom within new US$900 million facility

Significant Reserves Growth

* 2010 exploration discoveries to date have added approximately 23 mmboe to 2P reserves representing a reserves replacement ratio through exploration drilling of over 300%

* 2P reserves of 31 mmboe and 3P reserves of 51 mmboe added via the acquisition of Petro Canada Netherlands BV (“PCN”)

Increasing Production

* First half production average of 37,215 boepd (including effects of accelerated annual maintenance shutdowns)

* PCN first half production average of 10,825 boepd

* Following the acquisition of PCN and the successful development of Babbage the Group’s total number of producing fields has increased to 55 from 36

* Strong production performance from the UK Northern North Sea oil fields, the Greater Kittiwake Area oil fields and the Cavendish gas fields

* Babbage development delivered first gas on 10 August 2010

* Ettrick has seen a significant rise in oil production following the tie-in of two further development wells

* Group production for 2010, following the PCN acquisition now estimated to average 40,000 to 45,000 boepd

* Production guidance for the Group, prior to the PCN acquisition, remains unchanged at 37,000 to 41,000 boepd

* 2010 exit rate of over 51,000 boepd expected

Strong Development Portfolio Delivering Near Term Production

* Near term production upside from four development projects in the UK, the Netherlands and Egypt

* The Arran and Western Isles operated development projects in the UK will add to production in 2012 and 2013 respectively

* Project sanction anticipated on Arran by the end of the year following the submission of a draft field development plan (“FDP”) in the first half of 2010

* Selected preferred development concept for Western Isles with formal project sanction anticipated early 2011

* Medway project sanction expected in Q4 2010 with first production in early 2012

* Production anticipated around year end from the fast-track development of North Zeit Bay

Successful and Extensive International Exploration Programme

* Six oil and gas discoveries made in Egypt and the UK already in 2010

* Including significant discoveries at Papyrus, Platypus, Lorcan and Fin

* Currently drilling wells in the Faroe Islands (Anne-Marie) and Egypt (Nefertiti)

* Six further wells to be spudded in the remainder of the year including the East Beni Suef exploration concession, North Zeit Bay and the major Cormoran target in Mauritania

* In total, 22 exploration wells (including 2 PCN exploration wells) being drilled in 2010 with all rigs contracted

* Acquisition of a 50% interest in the El Manzala Offshore Area Concession, alongside BG group

Acquisition of Petro Canada Netherlands BV

* Successfully completed the acquisition of PCN in August 2010

* Fourth international acquisition in three years and largest transaction to date

* Added interests in 18 producing fields over four key production hubs

* Short term development potential at Medway and significant exploration upside

* PCN 2010 average full year production c.10,700 boepd

* The acquisition of PCN significantly enhances the Group’s North Sea operating capability

Increased Financial Strength

* Successful corporate refinancing securing a new US$900 million facility from Royal Bank of Canada (“RBC”) with a 4 to 5 year tenure

* Fully funds PCN acquisition, all planned development projects and has capacity to re-pay the Group’s convertible bond in July 2012, if required

Outlook

* Currently drilling two wells and six further wells planned for the remainder of 2010

* Up to 15 wells already planned for 2011 with key wells offshore Guinea, Nile Delta, Egypt, Norway and Morocco

* Near term production gains from development projects

* Acquisition of PCN increases production capacity to over 50,000 boepd with further M&A growth opportunities identified

* New US$900 million bank facilities provide strong funding base for future growth and significant headroom

Tom Cross, Chief Executive of Dana, commented:

“Dana performed very strongly in the first half. We have delivered interim profits which are in excess of full year 2009, we have also grown reserves by 54 million barrels of oil equivalent through new discoveries and via acquisition. The Dana team is delivering the most successful phase of growth in the Company’s history. With a full programme of exploration, production growth and development activity planned for the second half, this trajectory is set to continue upward. Moreover, after securing substantial new debt facilities and with our rising production generating strong cashflows, we are very well financed to deliver our growth plans.”

Event post period end:

The Board of Dana has noted KNOC’s unsolicited cash offer for Dana at 1800 pence per share, made post period end. The Board of Dana has not recommended this offer. Dana will present its detailed response, including information on the value of its assets, by no later than 8 September 2010, and the Board urges Dana shareholders and bond holders to take no action prior to that date.

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Source: DanaPetroleum, August 27, 2010: