Dana Gas receives $19m from Egypt operations

Energy company operates concessions in North African market and aims to expand

Dana Gas said it received payment of $19 million (Dh70m) from its natural gas operations in Egypt. Jaime Puebla / The National

Sharjah energy company Dana Gas received payment of $19 million (Dh70m) from its natural gas operations in Egypt, as it looks to expand its operations in the North African market.

The payment – part of the government’s efforts to reduce its receivables position to zero in 2019 – comprises a $10m sum from the Egyptian government in Egyptian pounds and $9m from the sale of a shipment of El Wastani condensate, Dana Gas said on Sunday.

In 2018, the Middle East’s largest private-sector natural gas company made “good progress” in reducing its outstanding balance of overdue receivables, it said.

The net receivables position as of December 31 had reduced to $140m, the lowest level since 2011.

Dana Gas, which is listed on the Abu Dhabi stock exchange, has several exploration and production assets in Egypt, the Kurdistan Region of Iraq and the UAE, and has plans for expansion.

In February, the company said it is eyeing the potential development of a large gas resource base in Egypt, which could require up to $5 billion in investment.

Under the plans, Dana Gas would drill the first exploration well in April in the Block 6 offshore area, which could hold up to 20 trillion cubic feet of gas with the initial exploration cost stretching to $59m. A final investment decision could be taken in around 2023.

The company reported in February a net loss of $186m for the full-year 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.

Earlier this month, Dana Gas struck a new gas sales agreement with the Kurdistan Regional Government, under which it expects to generate up to $200m in revenues.