* Hit by 14.6 mln stg writedown on exploration expenditure
* Net profit 2.4 mln pounds, vs 60.4 mln
* H1 production fell to 38,999 boepd, vs 43,147 barrels
* Sees 2009 output broadly flat on 2008
* Shares down 3.2 pct (Adds comments from CEO and analysts, share price)
By Julie Crust
LONDON, Aug 28 (Reuters) - British independent oil and gas company Dana Petroleum posted a 96 percent drop in first-half net profit on a writedown related to unsuccessful exploration spending and lower commodity prices.
Net profit slumped to 2.4 million pounds ($3.9 million) from 60.4 million a year ago as revenue fell 47 percent to 165.1 million pounds, it said on Friday.
The FTSE 250 company cut its 2009 production guidance to between 41,000-43,000 from a range of 43,000-47,000 barrels given in May.
Numis Securities said the interim results and output guidance were disappointing.
Dana's shares were down 3.2 percent at 1,415 pence at 1022 GMT, underperforming a 3.2 percent gain in the DJ Stoxx European oil and gas sector index.
"On balance, we think the market may take profits given the relative strength and lower 2009 guidance on volumes," said Morgan Stanley in a note. It said the weak volumes were not a surprise.
First-half production fell to 38,999 barrels of oil equivalent per day (boepd) from 43,147 barrels as oil and gas prices fell from the year-earlier period.
"It's not a performance issue, it's a choice," said Chief Executive Tom Cross referring to the lower production in an interview with Reuters. "We know that we can produce higher."
Realised oil prices dropped 53 percent to $50.33 a barrel of crude sold and gas prices fell 20 percent to 34.4 pence per therm.
The company, which doesn't hedge its production, is currently receiving more than $70 a barrel for its oil. Cross also said the company expects to get higher gas prices when the new gas pricing window starts in October.
Dana expects production to grow in 2010, helped by the ramp-up of the Ettrick field and the start of production from the Babbage project in the first quarter of 2010.
"We continue to expect strong growth in 2010 driven by Ettrick and the Babbage development taking production to about 48,000 boepd," Numis Securities said in a research note.
Dana has a large exploration programme and has drilled 12 wells to date in 2009 and aims to drill another nine wells, including five key wells, before the end of the year.
"The drilling programme between now and the year end really has the ability to drive the value of the company on," said Cross. "For us the important part of the year is going to be between now and Christmas."
It projects capital spending of 240-255 million pounds in 2009 range, with capex expected to fall to 170-180 million pounds in 2010, Cross said.
"Dana has also secured $400 million of new debt on attractive terms and is now very well positioned for both organic growth and further acquisitions," Cross said.
He declined to discuss specific targets or to comment on whether the group was in talks with any potential buyers.
There has been ongoing speculation about bid interest from Germany's biggest power generator, RWE, with rumours in June suggesting a price of around 1,800 pence.
"Dana is easily worth that," said Cross. (Editing by Dan Lalor and Rupert Winchester) ($1=.6140 Pound)