Dana Gas has terminated its agreement for the sale of its Egyptian assets, announced on 25 October 2020.
A number of conditions precedent to the transaction could not be completed to the satisfaction of both parties prior to the long stop date of the Sale and Purchase Agreement (SPA), which was Wednesday 14th April 2021. The board has therefore decided to retain and operate the assets in Egypt alongside the highly prospective exploration acreage offshore Block 6.
As per ADX disclosure requirements, the company is required to disclose the financial impact of this termination. While the company is still assessing these in detail, it is expected that there will be positive consequences on the company’s profitability and balance sheet and improvement in its cashflow in the coming years. These beneficial consequences result from the changed circumstances in the global economy and energy markets.
“Dana Gas has worked diligently to finalise this transaction. However, satisfaction of the conditions precedent in the SPA proved problematic between the parties. Once the due date for satisfaction of those conditions expired, and after due consideration, the company resolved to exercise the right to terminate the SPA in accordance with its terms,” said Dr. Patrick Allman-Ward, CEO of Dana Gas.
“We have an excellent track record of operating in Egypt over the past 14 years. We remain fully committed to managing these assets for the benefit of all our stakeholders, including the Egyptian Government. We look forward to maximizing the value of both our onshore producing assets and focussing our attention on testing the enormous potential of our offshore Block 6 Concession Area where we are planning to drill an exploration well Q1 2023.”
