Dana Gas to sell Egyptian assets for $236m

Dana Gas, a publicly listed UAE energy major, said on Sunday it has signed a binding agreement to sell the majority of its Egyptian assets to IPR Wastani Petroleum, a private exploration and production operator, for up to $236 million.

The Sharjah-based company, which started talks to divest the assets in the second quarter of 2019, said in a statement to the Abu Dhabi Securities Exchange that the sale is aimed at focussing on its operations in Iraq's semi-autonomous Kurdish region.

The Egyptian assets being sold produced 30,950 boe/d (barrels of oil equivalent per day) in the first half and contributed $38 million to the company's Ebitda.

The sale, subject to approval by the Egyptian Ministry of Petroleum and Mineral Resources, is expected to be completed in early 2021, the statement said.

"Completion of the sale process will allow us to strengthen our balance sheet and focus our attention on the development of our world-class assets in the (Kurdish region of Iraq) KRI, of which our current share of reserves are over 1 billion barrels of oil equivalent, with considerably more resources for realization and development," Patrick Allman-Ward, CEO of Dana Gas said.

Allman-Ward said the offshore concession in Egypt "is highly prospective." Proceeds from the sale will be used to reduce debt and for general corporate purposes.

Due to the Covid-19 pandemic and "associated negative effects," Dana Gas will take an impairment in Q3 2020, which will be disclosed as part of results for the quarter, the company said.

Dana Gas, which is a 35 per cent shareholder in Pearl Consortium operating the Khor Mor and Chemchemal fields in Iraq's Kurdish region, said in August that growth plans in the region have been impacted by the pandemic because of movement restrictions that will delay the Khor Mor expansion project.

The company produced 63,250 boe/d in the first half, a 7.0 per cent drop from the year-earlier period due to reduced output in Egypt and the Kurdish region and the cessation of production from UAE's Zora gas field.

Dana Gas is selling its 100 per cent working interests in the El Manzala, West El Manzala, West El Qantara and North El Salhiya onshore concessions and associated development leases. It is retaining its interests in onshore and offshore exploration concessions, the El Matariya (Block 3) and North El Arish (Block 6), and "will actively pursue maximizing the value of these assets," it added. issacjohn@khaleejtimes.com