Dana Gas won an arbitration that contested its termination of the sale of Dana Gas Egypt. The arbitration was initiated on 28 April 2021by IPR Wastani Petroleum Ltd., (IPR Wastani) a member of the IPR Energy Group, in relation to the Sale and Purchase Agreement (SPA) for the sale of oil and gas assets in Egypt.
The tribunal concluded that the termination of the sales agreement was valid.
“We are very pleased with the outcome of this arbitration and with the speed with which this final decision was made,” said Dr Patrick Allman-Ward, CEO of Dana Gas. “The award confirms that Dana Gas was correct and within its contractual rights to terminate the sale’s process. The Board has made a decision to continue to hold and operate the assets in the best interests of the Company and its shareholders as well as for our broader stakeholders.”
Dana Gas terminated its agreement for the sale of its Egyptian assets to IPR Wastani on 22 April 2021 as the parties were unable to complete a number of conditions precedent to the transaction by the long-stop date of 14 April 2021. Dana Gas’s Board of Directors therefore decided to terminate the SPA and retain and operate the assets in Egypt. The assets will continue to be operated by Dana Gas.
In a press statement, the company noted that it plans to explore the enormous potential of its offshore Block 6 Concession Area. This is estimated to contain more than 20 Tcf gas resources which it plans to test by drilling an exploration well currently scheduled for Q1 2022 depending upon the availability of long lead items.
“We are committed to continuing to operate our onshore assets to the highest operational and safety standards,” Allman-Ward said. “We are also excited about the potential of our offshore Block 6 Concession Area and we are working hard to be able to drill an exploration well in the block as soon as practicably possible.”
Dana Gas Egypt collected $23 million in the first quarter of 2021. This increased to $ 75 million in the second quarter following the termination of the SPA. In total, Dana Gas Egypt has collected $98 million during H1 2021, compared to $43 million received in the same period of 2020, representing a 128% increase. As a result, the $131 million receivables at the end of Q1 will drop significantly.
