Dana Gas sells Egypt assets to IPR for $236 million
Under the deal, IPR Energy’s unit IPR Wastani Petroleum Ltd. is buying all of Dana Gas’ onshore Egyptian oil and gas blocks, which accounted for production of 30,950 barrels of oil equivalent per day in 2019. Dana Gas retains oil and gas exploration blocks in Egypt.
Tudor, Pickering, Holt & Co. (TPH) advised on the sale.
This will enable Dana Gas to repay debt associated with Islamic bonds that mature this month.
Dana Gas said it had received four offers for the assets and had to extend talks due to coronavirus-related restrictions.
It will receive $153 million in cash and as much as $83 million in contingent payments for the sale to IPR, the company said in a statement.
Dana Gas is also set to take an impairment charge in the third quarter related to the coronavirus pandemic’s impact on its overall business, the statement read, without disclosing the size of the charge.
Selling Egyptian assets allows Dana Gas to focus on expanding production in the Kurdish region of northern Iraq, chief executive Patrick Allman-Ward said in the statement.
Iraq will become the company’s main area of operation, Allman-Ward added.
Dana Gas had been seeking to complete the sale of its Egyptian assets in the first quarter of the year to raise cash needed to pay sukuk due at the end of this month. However, the sale was delayed due to the coronavirus outbreak. In July, Dana Gas appointed a financial adviser, a move that prompted investors to question whether the company would be able to make the payment or not. Earlier this month, the company announced earlier it was arranging a bridge loan designed to help pay the sukuk, of which $309 million is outstanding.