Dana’s discovery, made by the Dabayaa-2 well, confirms there is gas in the Upper Abu Madi formation.

The well is expected to produce gas by the end of December.

“We are very pleased with the results we obtained from Dabayaa-2, which confirms our high expectations for the potential of the Abu Madi formation in this block,” says Hany el-Sherkawi, country director at Dana Gas.

“The Lower Abu Madi formation was tested previously, but this is the first time that we have been able to confirm the productivity in the Upper Abu Madi formation.”

Dana extracted gas from the well at a rate of more than 10 million cubic feet a day. It drilled to a total depth of 3,000 metres. The well also produced condensate at a rate of 240 barrels a day.

Dana Gas has already made discoveries in 2007 from three other wells. In September, it made the first ever commercial oil discovery in Southern Egypt.

The company has a 50 per cent interest in the 477,000-acre West Manzala block, which it acquired in May 2004. The UK/Dutch Shell Group took a 50 per cent interest in the block in March 2006.

Dana Gas is also leading a consortium to build and operate a liquefied petroleum gas plant in the Gulf of Suez. The company will start work in the first quarter of 2008.

Egypt’s natural gas reserves have doubled in the past five years to 70 trillion cubic feet.