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Monday, 26 October 2020

Dana Gas sells Egypt assets to IPR Energy

M&A WATCH- Struggling producer Dana Gas offloads Egypt assets to IPR Energy: Dana Gas has agreed to sell most of its Egypt assets to IPR Wastani Petroleum for as much as USD 236 mn, allowing the company to double down on its operations in Iraqi Kurdistan, the company said in a statement yesterday. The Emirati firm, which began talks with several prospective buyers in 2Q2019, is selling its entire concessions in El Manzala, West El Manzala, West El Qantara and North El Salhiya but will hold onto its interests in exploration concessions El Matariya (Block 3) and North El Arish (Block 6), the statement said. Watani has agreed to pay a base price of USD 153 mn as well as USD 83 mn contingent on Brent prices and production between 2020-2023.

Wastani who? IPR Wastani Petroleum is part of the Texas-based energy group IPR Energy, which conducts exploration and production operations in nine concessions in Egypt.

The acquisition isn’t done yet: The agreement will be completed by early 2021, pending the approval of the Oil Ministry, the company said.

A sale fit for a pandemic: The sale price represents a serious climbdown from the USD 500 mn valuation Dana had originally attached to its portfolio. While the company hasn’t offloaded all of its assets, the USD 153 mn base price represents a marked discount given the blocks it is keeping hold of (El Matariya and North El Arish) are yet to make commercial discoveries after years of exploration.

Background: Dana Gas has been looking to offload its Egypt assets since September of last year. Talks with IPR Energy were reported last month, ahead of a USD 379.6 mn debt repayment in outstanding Islamic bonds, or sukuk, due at the end of this month.

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