Dana Gas receives purchase offers for Egyptian assets

Sharjah-based energy producer to make decision after bidding closes in mid-November

Dana Gas chief executive Patrick Allman-Ward said the company is eyeing final bids for the sale of its Egyptian assets by mid-November. Reuters

Dana Gas said it is receiving offers from companies interested in purchasing its assets in Egypt and expects to make a decision on the sale after bidding closes by mid-November.

The Sharjah energy producer plans to invest proceeds from the potential sale into the development of its oil and gas assets in the Kurdistan region of northern Iraq, which houses around 90 per cent of the company’s proved and probable reserves, Dana Gas said. In the meantime, the company is currently continuing with its operations in the North African nation.

One possible scenario is that Dana Gas could sell to an investor its Egyptian assets along with the pending receivables from the Egyptian government, Patrick Allman-Ward, chief executive of Dana Gas, told Al Ittihad newspaper.

The Abu Dhabi-listed firm confirmed in July that it is undertaking a strategic review of its Egyptian oil and gas assets with a view to selling them as it seeks to focus on its Kurdish operations. It has hired financial advisors to look at a possible sale at "full value."

Dana Gas generated about 56 per cent of its energy output, or 35,200 of barrels of oil equivalent per day, in Egypt last year, according to the company’s website.

Dana Gas’ proved and probable reserves in Egypt stood at 89 million barrels of oil equivalent last year, according to its investor presentation. The company also has 14 development leases under three concessions in the Nile Delta region and a 26.4 per cent stake in a gas liquids extraction plant in the Gulf of Suez.

Dana Gas has been operating in Egypt since 2007. Sharjah-based Crescent Petroleum is its biggest single shareholder with a 19.67 per cent stake in the company, according to the ADX website.

Ideally, Dana Gas is seeking to sell its entire business in Egypt in one deal but will also consider a partial sale depending on the offers, Mr Allman-Ward told London media organisation Argus.

Dana Gas said the payments owed to it by the Egyptian government was reduced to $117 million (Dh429.6m) - the lowest amount it has been owed by Egypt in eight years.