Using Transocean Barents rig, the company has started drilling a well on the gas and condensate Albert prospect in production license PL513 located in the Haltenbanken area.
Dana Petroleum will drill the prospect to 3,500m in the Cretaceous Lysing formation.
Albert prospect is situated northwest of Victoria, which is believed to be one of the largest gas discoveries made on the Norwegian Continental Shelf.
Dana Petroleum Norway managing director John M Dahlen said the company is drilling the last well in its four well drilling program in Norway for the year.
"In Albert we will test the same reservoir types which have proven hydrocarbons in the adjacent Skarv, Marulk and Snadd fields," Dahlen added.
"A discovery in Albert will also open up for further investigation several adjacent prospects in neighboring licenses held by Dana."
The Albert prospect is also well placed with existing local infrastructure in proximity and can be tied back to existing installations in case a discovery is made.
The drilling operations are expected to be completed by the end of January 2013.
Dana Petroleum has 50% interest in the prospect whereas Maersk Oil Norway is the operator of the prospect with the remaining 50% interest.
