The UAE's publicly listed Dana Gas has agreed to sell the majority of its Egyptian assets to a private exploration and production operator IPR Wastani Petroleum for up to $236 million in a bid to focus on its operations in Iraq's semi-autonomous Kurdish region.
Dana Gas, which started talks to divest the assets in Q2 of 2019, is selling its 100% working interests in the El Manzala, West El Manzala, West El Qantara and North El Salhiya onshore concessions and associated development leases, it said in a statement Oct. 25. It is retaining its interests in onshore and offshore exploration concessions, the El Matariya (Block 3) and North El Arish (Block 6), and "will actively pursue maximizing the value of these assets," it added.
The Egyptian assets being sold produced 30,950 boe/d in H1 and contributed $38 million to the company's Ebitda, it said. The sale, subject to approval by the Egyptian Ministry of Petroleum and Mineral Resources, is expected to be completed in early 2021, it said.
"Completion of the sale process will allow us to strengthen our balance sheet and focus our attention on the development of our world class assets in the (Kurdish region of Iraq) KRI, of which our current share of reserves are over 1 billion barrels of oil equivalent, with considerably more resources for realization and development," CEO Patrick Allman-Ward said in the statement.
Pay debt
He added that the offshore concession in Egypt "is highly prospective." Proceeds from the sale will be used to reduce debt and for general corporate purposes, the company said.
Due to the COVID-19 pandemic and "associated negative effects," Dana Gas will take an impairment in Q3 2020, which will be disclosed as part of results for the quarter, it said.
Dana Gas, which is a 35% shareholder in Pearl Consortium operating the Khor Mor and Chemchemal fields in Iraq's Kurdish region, said Aug. 13 that growth plans in the region have been impacted by the COVID-19 pandemic because of movement restrictions that will delay the Khor Mor expansion project.
The company produced 63,250 boe/d in H1, a 7% drop from the year-earlier period due to reduced output in Egypt and the Kurdish region and the cessation of production from UAE's Zora gas field, it said on Aug. 13.
