Dana Gas Egypt production up 8pc in 2014

02/02/2015 11:11 AST

UAE-based Dana Gas increased average production of gas, LPG, condensate and crude oil in Egypt during 2014 to around 40,000 barrels of oil equivalent per day, marking an increase of 8 per cent over the average output in the previous year.

Currently the sixth largest oil and gas operator in Egypt, the company also surpassed in 2014 the milestone of producing over 100 million barrels of oil equivalent accumulatively since commencing its operations in Egypt in 2007, a statement said.

Dana Gas, the Middle East's leading regional private sector natural gas Company, achieved a number of major milestones in Egypt during the past year, said Patrick Allman-Ward, chief executive officer.

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. Together, these milestones place the Company on a much stronger footing in Egypt from which it can benefit for its next phase of growth.

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 $60 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 per cent 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 is expected to extend the Company’s highly successful shallow gas production business onshore the Nile Delta, said Allman-Ward.

In Block 3, the Company will participate on a 50 per cent 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.

“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,” said Allman-Ward.

“We have also secured medium- term growth potential through our successful bids for these two new exploration blocks in the Nile Delta. We see this positive momentum continuing and are excited about our exploration and development plans in Egypt.”

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