Dana Petroleum incurred an operating loss of £3.17 million (€4.03 million) before exceptional charges in 1998 due to depressed oil prices and the poor performance of the Durward and Dauntless oil fields which declined at a faster rate than expected.

The group also had to contend with an exceptional charge of £20.8 million. This reflected the reduction in the value of the two fields' assets. Dana noted that while this charge was taken into the profit and loss account, it has had no impact on its cash flow. Even after this charge, gearing stands at 9 per cent. Dana noted that the latest accounts did not reflect its transaction with Centrica in February which brings £21 million cash into the group.

"In a turbulent year dominated by very low oil prices, Dana's significant exploration and commercial successes have gone almost unnoticed," the preliminary statement said. "As conditions improve, we are well positioned to add value for shareholders with increased production, a long-life reserve base, net cash and major exploration upside."