Dana Gas confirms possible Egypt exit
Dana Gas confirms possible Egypt exit: Dana Gas is studying the possibility of selling its Egypt assets to focus on its “massive resources” in the Kurdistan Region of Iraq (KRI), but will continue its operations until then normally, Head of Investor Relations Mohammed Mubaideen confirmed to CNBC Arabia yesterday (watch, runtime: 10: 56). Unnamed sources told Reuters earlier this week that the company has hired investment bank Tudor, Pickering, Holt & Co. (TPH) to advise it on the sale of the assets, which are worth more than USD 500 mn. Al Arabiya also interviewed Mubaideen yesterday (watch, runtime: 06:19).
Why the exit? “It’s a strategic decision to focus on the massive resources in the KRI,” Mubaideen told CNBC. The Emirati company said on Sunday (pdf) that its share of hydrocarbon reserves at Pearl Petroleum Company’s Khor Mor and Chemchemal Fields in the region have jumped 10% to around 1 bn boe, perhaps making them the biggest gas fields in Iraq. One of the sources speaking to Reuters said that focusing on a single region could make the company more attractive to investors ahead of a potential listing on the London Stock Exchange.
The company will continue to operate as normal in the meantime: “We’re committed to our operations in Egypt,” Mubaideen said, adding that the Abu Dhabi-listed energy producer is planning to invest in drilling in the El Matareya concession in the Nile Delta. The company announced on Sunday that it is abandoning its Merak-1 well in the North Arish concession after failing to find commercial hydrocarbons, but will continue exploration efforts in the concession.
No one has officially told us anything: The Oil Ministry has not received any official notice from the company about plans to exit the country, ministry sources told Amwal Al Ghad.
Background: Dana holds stakes in five onshore exploration and production concessions in the Nile Delta and one offshore block in the eastern Mediterranean. Dana Gas’ production climbed 6% y-o-y in 1Q2019 to 68.7k boe/d from 65k boe/d during the same quarter last year, partly due to an increase in production from its Balsam 8 field in Egypt, the company said in April. Egypt last month paid the Emirati company USD 38 mn in overdue arrears, reducing its outstanding receivables to USD 125 mn, the lowest level since 2011.