Dana Gas Receives US$ 60 million from Egypt
Dana Gas, the Middle East’s leading regional private sector natural gas Company, announced that it has received from the Egyptian Government a payment of US$ 60 million (AED 220 million). This represents 28% of the total overdue receivables of US$ 212 million (AED 778 million). This payment has been received in the form of US$ 10 million and the balance in equivalent Egyptian pounds. All of this money will be used to pay for the Company’s overdue industry receivables, fund future investment requirements and address operational expenses in Egypt.
Earlier in 2014, Dana Gas and the Egyptian Government signed the landmark Gas Production Enhancement Agreement (GPEA) which allows the Company to significantly enhance production and gradually recover its outstanding receivables in a phased manner over a 3-year period going forward. The GPEA agreement allows investments to be made in an important development program to eventually increase production from current levels of around 40,000 BOEPD from the Company’s Development Leases in the Nile Delta. Under the GPEA, Dana Gas will undertake a long term staged work program over a seven year period with project work expected to start in the next few months. The first export sales of incremental volumes of condensate will follow thereafter. Estimated incremental production during the period will be approximately 270 Billion cubic feet of natural gas, 8 to 9 million barrels of condensate and around 450,000 tons of LPG. Peak production is expected to occur in 2017 with incremental daily production of approximately 160 MMscf gas and 5,600 barrels of condensate.
During the discussions that Dana Gas has continued to have with the Egyptian authorities to resolve the issue of its outstanding payments, it has already been able to increase production for the benefit of the Egyptian economy and its people. Dana Gas Egypt’s gas, LPG, condensate and crude oil production averaged 40,000 barrels of oil equivalent per day in 2014, which is an 8% increase over 2013 average production.
Patrick Allman-Ward, Chief Executive Officer of Dana Gas, said:
“We would like to thank the Egyptian Government for making this payment. We are also delighted to have concluded the Gas Production Enhancement Agreement and are working closely with the authorities to accelerate the implementation of the GPEA in order to fast-track enhanced production and the payment of the remaining outstanding receivables as quickly as possible going forward. Dana Gas is now preparing for the startup of the project and is in the process of securing materials and drilling rigs”.
Dana Gas is among the most active oil and gas companies and is the 6th largest gas producer in Egypt. The Company has invested around US$ 2 billion in Egypt to date, making it the GCC’s largest investor in the oil & gas sector in the country.
Dana Gas was also recently awarded the North El Salhiya (Block 1) and El Matariya (Block 3) onshore Concessions in the Nile Delta as part of the 2014 EGAS bidding round held recently in Egypt. The Company will operate the Block 1 Concession Area on a 100% basis. It is expected that exploration success and future production from conventional gas reservoirs in the Block, utilizing Dana Gas’s existing infrastructure, has the potential to extend the Company’s highly successful gas production business onshore the Nile Delta.
Dana Gas Egypt will participate in the Block 3 Concession Area on a 50% basis with BP as partner and operator.
In addition, Dana Gas has 100% working interest in the North El Arish (Block 6) Concession Area, offshore the eastern Nile Delta. Multiple play types have been identified within the acreage and plans for the first exploration phase includes seismic acquisition and the drilling of one exploration well.
Source: Dana Gas