DUBAI: United Arab Emirates energy firm Dana Gas said on Monday that it had been awarded exploration deals for two onshore gas blocks in Egypt.

The company will operate the North El Salhiya onshore concession area, known as Block 1 and will partner with British company BP to explore El Matariya, Block 3, on a 50:50 ownership basis, it said in a statement.

"Under the terms of the agreement, BP will fund all of the cost, including Dana Gas’s share, of one exploration well up to an agreed maximum limit," Dana said.

If the well proves commercial, BP will have the option to buy up to 50 percent stakes in Dana Gas' adjacent development leases, it said.

Block 1 is an extension of Dana Gas' existing conventional gas production business in Egypt, the company said. The new deals are part of the 2014 EGAS bidding round held late last year in Egypt.

Dana Gas, which relies on Egypt for over half of its output, said in August it expected to recover the vast majority of overdue payments which the Egyptian government owes it by 2018.

Dana has had problems recovering payments from exploration and production assets in Egypt and Iraqi Kurdistan because of political turmoil in those places.

At the end of June, the company was owed $297 million in Egypt and $650 million in Kurdistan, it said.

UAE-based companies such as Dana Gas have been capitalizing on good relations between the UAE and Egypt's government.