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Dana Gas considers multiple scenarios for sale of Egypt assets

Dana Gas
Posted: September 15, 2019 at 1:20 pm   /   by   /   comments (0)

Dana Gas considers multiple scenarios for sale of Egypt assets, will decide in November: Dana Gas is considering offloading remaining arrears owed to it by the Egyptian state on to whoever ends up buying its Egyptian assets, CEO Patrick Allman-Ward told the UAE’s Al-Ittihad newspaper on Wednesday. Speaking on the sidelines of the World Energy Congress in Abu Dhabi, Allman-Ward also confirmed that the company is receiving offers from companies interested in buying its assets in Egypt and expects to make a decision on the sale after bidding closes by mid-November.

Allman-Ward reportedly said that the company was looking to complete the sale in one transaction, but is also considering only a partial sale, according to the National. Which course of action the company takes will depend on the offers presented, he added. Allman-Ward reaffirmed the reason behind the exit (or partial exit) was to focus its resources on its assets in Kurdistan.

What could be up for grabs? The company has 14 development leases under three concessions in the Nile Delta region and a 26.4% stake in a gas liquids extraction plant in the Gulf of Suez. Last week, the company’s head of investor relations Mohammed Mubaideen said that the company’s Egyptian assets were producing at a rate of 34k bbl/d. He added that the Egyptian government has repaid the company USD 81 mn during the first half of the year and brought its arrears down to USD 117 mn.

Background: The Emirati company said in July it had hired financial advisors to study the possibility of selling down its Egypt asset portfolio. Unnamed sources told Reuters that the company hired investment bank Tudor, Pickering, Holt & Co. (TPH) to advise it on the sale. The company had previously said it would abandon its Merak-1 well in the North Arish concession after failing to find commercial hydrocarbons, but that it plans to invest in drilling in the El Matareya concession in the Nile Delta.

Dana Gas receives purchase offers for Egyptian assets – Sharjah-based energy producer to make decision after bidding closes in mid-November.

Dana Gas said it is receiving offers from companies interested in purchasing its assets in Egypt and expects to make a decision on the sale after bidding closes by mid-November.

The Sharjah energy producer plans to invest proceeds from the potential sale into the development of its oil and gas assets in the Kurdistan region of northern Iraq, which houses around 90 per cent of the company’s proved and probable reserves, Dana Gas said. In the meantime, the company is currently continuing with its operations in the North African nation.

Dana Gas said it is receiving offers from companies interested in purchasing its assets in Egypt and expects to make a decision on the sale after bidding closes by mid-November.

The Sharjah energy producer plans to invest proceeds from the potential sale into the development of its oil and gas assets in the Kurdistan region of northern Iraq, which houses around 90 per cent of the company’s proved and probable reserves, Dana Gas said. In the meantime, the company is currently continuing with its operations in the North African nation.

One possible scenario is that Dana Gas could sell to an investor its Egyptian assets along with the pending receivables from the Egyptian government, Patrick Allman-Ward, chief executive of Dana Gas, told Al Ittihad newspaper.

The Abu Dhabi-listed firm confirmed in July that it is undertaking a strategic review of its Egyptian oil and gas assets with a view to selling them as it seeks to focus on its Kurdish operations. It has hired financial advisors to look at a possible sale at “full value.”

Dana Gas generated about 56 per cent of its energy output, or 35,200 of barrels of oil equivalent per day, in Egypt last year, according to the company’s website.

Dana Gas’ proved and probable reserves in Egypt stood at 89 million barrels of oil equivalent last year, according to its investor presentation. The company also has 14 development leases under three concessions in the Nile Delta region and a 26.4 per cent stake in a gas liquids extraction plant in the Gulf of Suez.

Dana Gas has been operating in Egypt since 2007. Sharjah-based Crescent Petroleum is its biggest single shareholder with a 19.67 per cent stake in the company, according to the ADX website.

Ideally, Dana Gas is seeking to sell its entire business in Egypt in one deal but will also consider a partial sale depending on the offers, Mr Allman-Ward told London media organisation Argus.

Dana Gas said the payments owed to it by the Egyptian government was reduced to $117 million (Dh429.6m) – the lowest amount it has been owed by Egypt in eight years.

(Sources: Enterprise.press & The National)

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