Sharjah energy company Dana Gas received a $48 million (Dh177m) payment in June for its operations in Egypt and plans to use the funds to cover the cost of drilling work in the North African nation.
The payment, part of Egypt's efforts to pay back overdue receivables by the end of 2019, comprised of $38m in dues from the Egyptian government and $10m from the sale of the second El Wastani condensate, the company said on Sunday.
The June payments shows the Egyptian government's "steady progress" in meeting its target of paying back all overdue receivables by year-end, said Patrick Allman-Ward, chief executive of Dana Gas.
The Abu Dhabi-listed company which is looking to expand its operations, has several exploration and production assets in Egypt, the Kurdistan Region of Iraq and the UAE.
Dana Gas has made headway in reducing its balance of receivables over the last year and a half. Total receipts from Egypt, which stood at $208m at the beginning of last year, came down to $140m by the end of 2018, the lowest level since January 2011. The energy company was paid a total of $78m during the first half of 2019, further reducing its receivables to $125m.
Dana Gas will use the funds for its onshore work-over programme and contribute towards the cost of drilling Merak-1, the deep-water exploration well in Block 6, Mr Allman-Ward said.
"Drilling operations are progressing well and we are expecting to have results in the third quarter this year," he said.
The company began drilling work at its offshore Merak-1 well in May. The block lies in the eastern Mediterranean Basin where major natural gas discoveries have been made in recent years.
Zohr field, a 30 trillion cubic feet discovery made by Italy's Eni in 2015, made Egypt a major player in Mediterranean gas. The North African country now aims to become a regional re-export hub.
Dana Gas reported in February a net loss of $186m for the full year of 2018 as impairments on ageing assets in Egypt and the UAE impacted profitability. Revenue for the period, however, climbed 4 per cent to $470m due to higher realised prices and incremental production from its Kurdish assets during the fourth quarter.
