Dana Gas receives $50m from Egyptian government with plans to boost operations

Company expects to deliver seven gas wells in 2026 as part of its investment in the country

Dana Gas drilled four wells in Egypt last year and plans to deliver seven this year.

Dana Gas, one of the largest private natural gas companies in the Middle East, has received $50 million from the Egyptian government as it plans to increase its operations in the North African nation.

The payment “significantly” reduces overdue receivables in Egypt and will support the Sharjah-based company’s continuing drilling programme under a $100 million consolidation agreement, Dana Gas said on Monday in a filing to the Abu Dhabi Securities Exchange, where its shares trade.

The multiyear deal, signed with Cairo in late 2024, integrated Dana Gas’s concessions in Egypt and is aimed at supporting new upstream investment and expanding its scope for exploration drilling.

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Dana Gas in August said it had made “solid progress” in its Egyptian operations.

Since the programme began, Dana Gas has drilled four wells, including the recent North El-Basant 1 discovery, which is estimated to hold 15 billion cubic feet of recoverable gas.

The company said it will spud – proceed with the early stages – of the fifth well, the Daffodil exploration well, in the first week of January. It expects seven to be delivered in 2026.

Dana Gas expects the initiative to contribute “directly to the national economy by supporting domestic gas supply and reducing the need for imports”, chief executive Richard Hall said.

“Our investment programme is already yielding positive outcomes. We have successfully brought new gas production online and additional wells are scheduled to follow,” he said.

Egypt's latest payment “acknowledges the importance of timely payments to ensuring the successful delivery of our drilling programme”, Mr Hall added.

Egypt, the Arab world's most populous nation, has increasingly relied on gas imports to meet its energy demand given the lower production from its maturing gasfields.

Once a regional gas exporter, Egypt has turned to costly liquefied natural gas imports as output declines and power demand rises.

Last month, Egypt and Israel agreed on a $35 billion deal that will provide Egypt with natural gas, which Israel described as its “largest ever” gas deal. Egypt also relies heavily on the US for gas imports.

In November, Dana Gas signed an initial agreement with Syrian Petroleum Company to explore redevelopment and expansion of natural gasfields in central Syria.

And on Sunday, Egypt and Qatar signed an agreement to increase LNG supplies and expand energy co-operation, adding another layer to Cairo's energy diversification strategy.

Dana Gas, established in 2005, 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 55,000 barrels of oil equivalent a day, its website says.