In April 2007, Crescent Petroleum and its affiliate, Dana Gas, entered into certain agreements with the Kurdistan Regional Government (KRG) of Iraq for the development of its substantial gas resources. Under the terms of the Strategic Alliance Protocol, the Kurdistan Regional Government, Crescent Petroleum and Dana Gas will jointly review the natural gas resources in the Kurdistan Region of Iraq with a view to the optimisation, development and utilisation of that substantial resource.

   

This initiative also includes the launch of the Kurdistan Gas City, which is a major new gas-utilisation industrial complex designed to promote private sector investment in a variety of gas-related industries and to benefit the country's citizens through job creation, training and the promotion of general economic activity.

   

In addition, Dana Gas was appointed on a service contract basis to develop, process and transport natural gas from the Khor Mor Gas Field, and to also concurrently appraise the potential of the Chemchemal Gas Field, in order to provide natural gas supplies to fuel domestic electric power generation plants currently under construction near Irbil and Suleymania, by early 2008.

   

The Khor Mor Field development will involve the hook up, testing and re-commissioning of 5 existing gas wells, appraisal of the reservoir including the drilling of an exploration well and at least 2 additional gas development wells, installation of separation facilities and an LPG extraction plant, and laying of around 180 kms of pipelines. The initial gas production from Khor Mor development is expected to be circa 150 MMscfd, rising to 300 MMscfd in the subsequent phase.