Dana Gas said 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 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 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. 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.
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Press Release; Image: Dana Gas