Dana Gas, one of the largest private natural gas companies in the Middle East, received a $20 million payment from the Egyptian government, taking the total payments received to $24.5 million in the fourth quarter.
The latest payment will help the company to reinvest in the North African country’s existing operations to increase gas production as part of a deal, Dana Gas said in a statement on Thursday to the Abu Dhabi Securities Exchange, where its shares are traded.
Dana Gas is proceeding with its planned investment programme, which forms part of the consolidation agreement negotiated with the Egyptian government.
The agreement will see the company consolidate its existing producing concessions into a single allowance with improved terms that will result in cost savings. It was ratified by the Egyptian government in June and is expected to be signed shortly.
The programme includes drilling 11 wells and is set to increase ultimate gas recovery by 80 billion cubic feet and significantly increase the value of Dana Gas Egypt assets, according to the company.
“We are encouraged by the recent commitment from the Ministry of Petroleum and Mineral Resources to provide regular monthly payments, along with progress towards resolving our overdue receivables,” Richard Hall, chief executive of Dana Gas, said.
“Future payments will be key to enabling the successful execution of the next phases of the consolidation programme.”
Set up in 2005, Dana Gas has exploration and production assets in Egypt, the Iraqi Kurdish region and the UAE, with proven reserves exceeding one billion barrels of oil equivalent and average production of about 60,000 barrels of oil equivalent a day last year.
