Dana Gas hits milestones in Egypt
Dana Gas revealed a number of milestones in the fulfillment of its growth strategy in Egypt.
Most recently, the signing of Blocks 1 and 3 Concession Agreements in the Nile Delta provides Dana Gas with additional highly material growth opportunities in the country, the company said in a statement. This supplements a number of positive developments including the recent signing of the landmark Gas Production Enhancement Agreement (GPEA) and the large payment made by the Egyptian government in December towards outstanding receivables.
The GPEA allows the company to significantly enhance production and to start gradually recovering its outstanding receivables in a phased manner over the next few years. This is in addition to the payments made to the industry by the Egyptian authorities from time to time.
Following the signing of this GPEA agreement, a US$ 60 million (AED 220 million) payment was made to Dana Gas by the Egyptian Government in December 2014 as part of its payments to the industry. This payment accounts for 28% of the total overdue receivables of US$ 212 million (AED 778 million), and will be used to fund future investment requirements and address operational expenses in Egypt, Dana Gas informed.
The newly awarded Block 1 is expected to extend the company’s highly successful shallow gas production business onshore the Nile Delta. In Block 3, the company will participate on a 50% basis with BP as partner and Operator. This exploration venture is targeting the deep Oligocene potential of the area, which, in case of success, would result in material production growth for Egypt and be transformational for the company.
In 2014, the Dana Gas was able to increase average production of gas, LPG, condensate and crude oil to around 40,000 barrels of oil equivalent per day, which was an 8% increase over 2013 average production. It has surpassed the milestone of producing over 100 million barrels of oil equivalent accumulatively since commencing its operations in Egypt in 2007.
Image: Dana Gas