Dana Gas starts drilling at the Balsam-2 development well in onshore Nile Delta, Egypt

UAE based natural gas explorer Dana Gas has started drilling the Balsam-2 development well in the Balsam Development lease at onshore Nile delta in Egypt.

The firm will be drilling the well with a rig from 2000 HP Egyptian Drilling and target the Qawasim formation to a depth of 3200m.

A 700 m horizontal section drilling at the site will follow a slanted and fully cored pilot hole through the Qawasim reservoir.

Dana Gas expects to complete the entire drilling process in around four months.

This marks the first major drilling campaign for the firm with around 30 wells and a large number of work-overs to be conducted over the following next 3 years.

The campaign is a part of the Gas Production Enhancement Agreement (GPEA) under which Dana Gas has a work programme commitment which enables it to sell the government’s share of incremental condensate production at market rates.

Within 2018, the arrangement is likely to get rid of the receivables balance, only if the Egyptian Government puts off further bullet payments to its petroleum sector.

Dana Gas Egypt general manager Dr Mark Fenton said: "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.

"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."