UAE’s Dana Gas says received some bids for its Egyptian assets

UAE-based Dana Gas announced on Wednesday it had received bids from a number of companies seeking to buy its assets in Egypt.

“We have received a number of bids from a number of companies,” the company’s chief executive Patrick Allman-Ward said on an earnings call, declining to say how many bids or from which companies.

Allman-Ward said a final decision had not been taken on whether Dana Gas would sell its Egyptian assets or not. He said offers would be submitted to the company’s board for review and that a decision is expected to be made by the end of March.

The company will pay down its outstanding sukuk, or Islamic bonds, of $397 million, due on October 31, with the potential sale of its Egypt assets, he added.

Dana Gas is negotiating with banks to refinance the sukuk if the sale does not cover the whole amount, or if there is no sale, Allman-Ward said.

The bidders were given flexibility to only bid for development leases and exclude exploration deals, he added.

Production from Egypt dropped 4 percent to 33,000 barrels of oil equivalent per day (boepd) in 2019 from 34,500 boepd in 2018, the company referred in a statement.

Allman-Ward said the company was disappointed by the Egyptian government being unable to make overdue payments by the end of 2019.

The payments are part of $111 million in receivables expected to collect from Egypt. Allman-Ward said part of that amount is overdue and part is in the process of payment.

The company, the Middle East’s largest regional private sector natural gas company, reported a profit of 575 million dirhams ($156.56 million) in 2019 from a loss of 682 million dirhams in 2018. The chief executive said it was Dana Gas’ biggest full-year profit in more than seven years.

Overall production grew 5 percent to 66,200 boepd in 2019 from 63,050 boepd in 2018.

Revenue dropped to 1.68 billion dirhams in 2019 from 1.72 billion dirhams in 2018 “due to lower realised prices and lower production in Egypt partly offset by increase in production in KRI.”

Allman-Ward said the company was pushing ahead with the development of its assets in the Kurdistan Region of Iraq (KRI), where more than 90 percent of Dana Gas’ proven reserves are located.

“The company’s expansion plan in the KRI is on schedule, with delivery from the first gas train expected in 2022. This will raise production to 650 mmscfd (million standard cubic feet per day) from the current rate of circa 400 mmscfd,” the statement read.

Source: Reuters