UAE’s Dana Gas said it received almost US$44 million in payment for condensate and LPG sales in the first half of this year from Pearl Petroleum’s Iraqi Kurdistan operations, which will undergo a production expansion.
The payment received from Pearl Petroleum Company included $7 million for June, the Abu Dhabi-listed company said in a bourse statement.
Pearl Petroleum is a consortium, comprised of five oil and gas companies, focused on exploration and production of natural gas and liquids assets in the Kurdistan Region of Iraq, in which Dana Gas is a 35 per cent shareholder and the joint operator.
Dana Gas said the payment is separate from cash-flow kept within Pearl to sustain current operations, and from the company’s $140 million allocated for further investment and development of the fields.
Dana Gas’ net share of production in the KRI averaged 26,100 barrels of oil per day (boepd) of production during the first half of 2018, a slight increase on first-half 2017’s output of 25,900 boepd.
Meanwhile, Dana Gas said plans are underway to increase Pearl Petroleum’s production by 170 per cent by 2021 through the installation of two 250 MMscf/d gas processing trains, adding to the two trains already in commission. This will increase the capacity to process gas and condensate from the Khor Mor field by 580 MMscf/d and 20 mbbld respectively.
“The first phase of this expansion programme is the fast-track debottlenecking project of the current production facilities. The project remains on track to deliver an increase in output of 80
MMscf/d, the equivalent of approximately a 25 per cent uplift, by third-quarter 2018,” Dana Gas said.
Third-party financing of $25.9 million for the project has been secured and a 10-year gas sales agreement with the KRG to supply and sell additional quantities of gas from the project has been signed, Dana Gas added.
As part of the first phase, a drilling programme for the appraisal and development of Khor Mor and Chemchemal will take place over the coming months, as well as workover operations of existing wells.
The UAE company said the expansion plan will be financed at the Pearl Petroleum level from third party financing or internal cash flow generated without any finance provided by Dana Gas.