Dana Gas, the UAE-based gas operator, received $10.4 million last month from the sale of Egyptian natural gas condensate as part of a plan to recover outstanding receivables. The payment comes against the backdrop of the company's ongoing dispute with creditors over $700m worth of sukuk.
The Sharjah company sold 157,200 barrels of El Wastani condensate in February at an average price of $66.5 per barrel, it said in a statement on the Abu Dhabi Securities Exchange, where its shares are listed.
The sale marks the fourth cargo of Egyptian condensate since the start of 2017; three shipments were sold last year for a total of $21m, the company said.
The shipments are part of the Gas Production Enhancement Agreement signed in September 2014 with the Egyptian government, a mechanism to restart income generation in Egypt and help pay down overdue receivables.
The agreement commits Dana Gas to a seven-year work programme under which it keeps the proceeds from incremental liquid sales to pay down money owed it by the Egyptian government.
Dana Gas is in the midst of a legal dispute in the UK and the UAE with its creditors over $700m worth of sukuk, which matured in October. The company stunned creditors, which include investment bank Goldman Sachs and the world's largest asset manager BlackRock, when it declared the sukuk illegal because of changes in Sharia law, arguing that it is was therefore not obliged to repay the debt.
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Last August, Iraq’s Kurdistan Regional Government signed an agreement to pay $1 billion to Dana Gas, its parent Crescent Petroleum and partners as part of a settlement of a long-running dispute over payments for gas liquids production in the region.
Under the settlement between the parties, the KRG agreed to immediately pay $600m to the Pearl Consortium, in which Dana and Crescent own 70 per cent, with Austria’s OMV, Hungary’s MOL and Germany’s RWE, each owning 10 per cent. The KRG also agreed to pay another $400m to go exclusively towards Pearl’s further development to increase production at its fields.
The $1.24bn balance of the amount awarded by the court was reclassified as outstanding costs, recoverable from future revenues generated.
The settlement with Kurdistan helped Dana Gas swing to profit last year, further helped by higher output in Egypt and Iraq and an uptick in oil prices, the company said in February.
It posted a net profit of $83m compared with a loss of $88m a year earlier. Reported gross revenues grew 15 per cent to $450m compared with $392m in 2016.