Dana Gas says receives further Dh218m from Kurdistan gas activities

Payment brings total dividends from joint venture operations to Dh439m in 2018

If a sale of Dana Gas Egyptian assets were to go ahead, the proceeds of the sale would be used to pay down its sukuk. Jaime Puebla / The National

Sharjah-based Dana Gas said it received a further $59.5 million (Dh218m) as payment from its operations in the Kurdistan Region of Iraq.

The latest payment brings the total dividends received through the company’s joint venture operations in the region this year to $119.7m, Dana Gas said in a statement to media on Monday.

“The consistent and timely payments received from our operations in the Kurdistan Region of Iraq gives us the confidence to continue investing and expanding our production,” said Patrick Allman-Ward, chief executive of Dana Gas.

“With our world-class reserves in the Khor Mor and Chemchemal fields and growing market for natural gas, combined with higher energy prices worldwide, the outlook is very positive for continued growth and economic returns to shareholders.”

The payment was distributed as a dividend by Pearl Petroleum, the consortium jointly owned by Dana Gas – which has a 35 per cent stake – Crescent Petroleum, also with 35 per cent, as well as OMV, MOL and RWE, which have 10 per cent each.

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It follows the release of $150m out of the $400m that was paid by the Kurdistan Regional Government to the JV partners under a settlement agreement reached last August and which was held in a Pearl Petroleum bank account pending financing for an expansion project at the Khor Mo gasfield. This was achieved through a $150m loan facility to Pearl Petroleum, Dana Gas said in its statement.

In addition, a $20m dividend was made to the joint venture partners as payment from liquids produced and sold in the Kurdistan Region of Iraq.

Dana Gas was previously embroiled in a $700m sukuk dispute. It has now completed refinancing the Islamic bond instrument, which has been sized down to $530m, freeing the company up to progress its exploration and development plans for assets in Kurdistan and Egypt, it said in August.

A multi-well drilling programme at Khor Mor and Chemchemal and a ‘de-bottlenecking’ of existing processing facilities are under way, and there are expansion plans to grow gas and liquids production by 25 per cent by later this year, and by a further 132 per cent over the coming three years.

These are to be primarily financed by the settlement agreement “and are not expected to require further cash injections from Dana Gas,” the statement added.