Dana Gas sells onshore Egyptian assets for $236 million

Dana Gas sells onshore Egyptian assets for $236 million
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Updated 26 October 2020

Dana Gas sells onshore Egyptian assets for $236 million

Dana Gas sells onshore Egyptian assets for $236 million
  • CNBC reported that Dana Gas UAE will actively attempt to maximize the value of these remaining assets

CAIRO: Dana Gas PJSC has entered into a binding agreement with IPR Wastani Petroleum Ltd. for the sale of its onshore Egyptian oil and gas assets for up to $236 million, including contingent payments.

As part of the transaction, Dana Gas is selling its full operative shares in its four onshore concession areas of El Manzala, West El Manzala, West El Qantara and North El Salhiya, and their associated development licenses.

The production rate in the four concession areas amounted to 30,950 barrels of oil equivalent per day in the first half of 2020. It contributed $38 million before interests, taxes, consumption, and depletion to the company’s profits during the same period. Transfer of ownership, responsibilities and staff will take place upon finalization and formal approval of deeds.

The UAE company, through its wholly owned subsidiary Dana Gas Egypt, will retain its interests in its onshore exploration concession in El Matariya and offshore exploration concession in North El Arish.

CNBC reported that Dana Gas UAE will actively attempt to maximize the value of these remaining assets.

The sale comprises of a base cash consideration of $153 million, including networking capital associated with sold assets and before any price closing adjustments, and contingent payments of up to $83 million subject to average brent crude prices and production performance between 2020 and 2023.

Dana Gas is also set to obtain a number of potential trade opportunities linked to other parties. The base consideration will be adjusted according to collections received and payments made by the company during the transitional period between the effective date and closing date.

The transaction is subject to several prerequisites. It also requires the approval of the Egyptian Ministry of Petroleum and Mineral Resources. It is expected to be finalized by the beginning of next year. The financial return of the transaction will likely be allocated towards paying company debts and public institutional benefits.

Dana Gas CEO Dr. Patrick Allman-Ward said: “Our constant aim is to achieve the highest return for our shareholders.”

The new deal is a key part of the company’s ambitions, he added. Finalizing the transaction will boost the UAE giant’s financial status, allowing it to transition towards developing its assets in Iraq’s Kurdistan region.

Kurdistan contains huge reserves of oil and hydrocarbon resources that will be explored and developed in the future.

The remaining Egyptian assets will remain productive, with the offshore exploration sector in particular likely to see huge growth in the future.

IPR is a leading company in the field of gas exploration and production in Egypt with over nine concession areas and more than 30 years of experience.


UAE’s Mubadala Petroleum signs Red Sea oil exploration deal with Egypt

The agreement, signed by Egyptian Minister of Petroleum and Mineral Resources Tarek El-Molla, allows the company to explore in a 3,084 square kilometer area of the Red Sea. (Shutterstock/File Photo)
The agreement, signed by Egyptian Minister of Petroleum and Mineral Resources Tarek El-Molla, allows the company to explore in a 3,084 square kilometer area of the Red Sea. (Shutterstock/File Photo)
Updated 23 January 2021

UAE’s Mubadala Petroleum signs Red Sea oil exploration deal with Egypt

The agreement, signed by Egyptian Minister of Petroleum and Mineral Resources Tarek El-Molla, allows the company to explore in a 3,084 square kilometer area of the Red Sea. (Shutterstock/File Photo)
  • It will own 27 percent of the stake as part of the agreement, while Shell will own 63 percent

CAIRO: The UAE’s Mubadala Petroleum Company has signed an agreement with Egypt to explore for oil and gas in the Red Sea.

The agreement, signed by Egyptian Minister of Petroleum and Mineral Resources Tarek El-Molla, allows the company to explore in a 3,084 square kilometer area of the Red Sea and was a result of a bidding round in 2019.

It will own 27 percent of the stake as part of the agreement, while Shell will own 63 percent. Egypt’s Tharwa Petroleum Company owns the remaining 10 percent.

The agreement refers to an area known as Sector 4, located in the north of the Red Sea in an area adjacent to the Gulf of Suez Basin, which is rich in natural resources. 

Parties will commit to conducting exploration studies in this sector and collecting seismic data for the area, using three-dimensional techniques, during the first three years of the exploration phase.

“The addition of Sector 4 in the Red Sea represents a new extension of our operations in Egypt, while providing a valuable opportunity to expand our activities, and by working with a strategic partner such as Shell,” said Mubadala Petroleum CEO Bakheet Al Katheeri. “The search and exploration operations in this sector, if successful, will support our strategy of extracting and manufacturing hydrocarbons, in order to contribute to supporting the stability and expansion of the Egyptian market, while providing growth opportunities for our operations in the country.”

Mubadala Petroleum owns a 10 percent stake in the offshore Shurooq gas field concession that includes the Zohr natural gas field, in addition to 20 percent in the concession area of Noor Gas Company. Both are located in the Mediterranean Sea off the coast of Egypt.