Egypt makes $60 million payment to Dana Gas

1/5/2015

Egypt makes $60 million payment to Dana Gas

SHARJAH, United Arab Emirates -- Dana Gas has received a payment of $60 million from the Egyptian government. This represents 28% of the total overdue receivables of $212 million.

This payment has been received in the form of $10 million and the balance in equivalent Egyptian pounds. All of this money will be used to pay for the company’s overdue industry receivables, fund future investment requirements and address operational expenses in Egypt.

Earlier in 2014, Dana Gas and the Egyptian Government signed the landmark Gas Production Enhancement Agreement (GPEA), which allows the company to significantly enhance production and gradually recover its outstanding receivables in a phased manner over a 3-year period going forward.

The GPEA agreement allows investments to be made in an important development program to eventually increase production from current levels of around 40,000 boed from the company’s Development Leases in the Nile Delta.

Under the GPEA, Dana Gas will undertake a long-term staged work program over a seven-year period with project work expected to start in the next few months. The first export sales of incremental volumes of condensate will follow thereafter.

Estimated incremental production during the period will be approximately 270 Bcf of natural gas, 8 to 9 MMbbl of condensate and around 450,000 tons of LPG. Peak production is expected to occur in 2017 with incremental daily production of approximately 160 MMcf gas and 5,600 bbl of condensate. 

During the discussions that Dana Gas has continued to have with the Egyptian authorities to resolve the issue of its outstanding payments, it has already been able to increase production for the benefit of the Egyptian economy and its people. Dana Gas Egypt’s gas, LPG, condensate and crude oil production averaged 40,000 boed in 2014, which is an 8% increase over 2013 average production.

Patrick Allman-Ward, CEO of Dana Gas, said: “We would like to thank the Egyptian Government for making this payment. We are also delighted to have concluded the Gas Production Enhancement Agreement and are working closely with the authorities to accelerate the implementation of the GPEA in order to fast-track enhanced production and the payment of the remaining outstanding receivables as quickly as possible going forward. Dana Gas is now preparing for the startup of the project and is in the process of securing materials and drilling rigs".

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