Dana Gas, the Middle East’s leading regional private sector natural gas company, has announced a number of major milestones in Egypt.
In a statement, the company said: “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.
“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 $60mn 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 $212 million, and will be used to fund future investment requirements and address operational expenses in Egypt.
The newly awarded Block 1 (DG 100% and Operator) is expected to extend its 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.
“We are poised to deliver strong growth in Egypt in the short term as a result of the signing of the Gas Production Enhancement Agreement duly supported by the payment made by the Egyptian government last month,” Patrick Allman-Ward, CEO of Dana Gas, said.
“We have also secured medium-term growth potential through our successful bids for these two new exploration blocks in the Nile Delta.”
