UAE’s Dana Gas announced it has entered into a binding agreement with IPR Energy Group for the sale of its onshore Egyptian oil and gas assets for $236 million including contingent payments.
The asset sale is in line with Dana Gas’ strategic goals of strengthening its balance sheet and focusing on the development of its world class assets in the Kurdistan Region of Iraq (KRI).
The deal includes the sale of Dana Gas’ 100 per cent working interests in the El Manzala, West El Manzala, West El Qantara and North El Salhiya onshore concessions and associated development leases. In the first half of 2020, these concessions produced 30,950 barrels of oil equivalent per day.
Dana Gas noted it will retain its interests in its onshore and offshore exploration concessions, respectively El Matariya (Block 3) and North El Arish (Block 6).
The transaction, which is subject to government approval, is currently expected to complete early 2021.
Dr Patrick Allman-Ward, CEO, Dana Gas, commented: “Our aim is always to maximize returns to shareholders and optimize our portfolio. The sale of our Egyptian assets forms a key part of this strategy. Completion of the sale process will allow us to strengthen our balance sheet and focus our attention on the development of our world class assets in the KRI, of which our current share of reserves are over 1 billion barrels of oil equivalent, with considerably more resources for realization and development. The quality of our remaining assets in Egypt are excellent and we retain an interest in two exploration concessions. Our offshore exploration block in particular is highly prospective,
“Over the last 12 years Dana Gas has delivered on a tremendous track record, doubling our 2P reserves in Egypt and increasing our production by 50 per cent. Our activities and investments in Egypt’s gas sector have supplied additional gas for power generation displacing heavy fuel oil thereby contributing significantly to the Egyptian economy.”
IPR is a private E&P operator in Egypt, with 9 active concessions.