Dana Gas has reached major milestones in the fulfillment of its growth strategy in Egypt.
Most recently, Dana Gas has signed Blocks 1 and 3 concession agreements in the Nile Delta, supplementing other developments including the recent signing of a gas production enhancement agreement (GPEA) that allows the company to enhance production and to start gradually recovering its outstanding receivables in a phased manner over the next few years.
Following the signing of this GPEA agreement, a $60 million (AED 220 million) payment was made to Dana Gas by the Egyptian government in December 2014 as part of its payments to the industry. This payment accounts for 28% of the total overdue receivables of $212 million (AED 778 million), and will be used to fund future investment requirements and address operational expenses in Egypt.
The newly awarded Block 1, for which Dana Gas has 100% and is operator, is expected to extend the company’s shallow gas production business onshore the Nile Delta. In Block 3, the Dana Gas will participate on a 50% basis with BP as partner and operator. This exploration venture is targeting the deep Oligocene potential of the area.