Dana Gas will continue to own and operate its mature oil and gas assets in Egypt after terminating an agreement to sell them to Houston-based IPR Energy, the Abu-Dhabi listed firm said today.
An initial agreement for the sale was announced on 25 October last year as part of the company's strategy to reduce its debt and focus on developing resources in the semi-autonomous Kurdistan Region of Iraq.
A long stop date was set for 14 April for the deal to be completed, but satisfying the conditions for the sale "proved problematic between the parties" Dana said. As a result, Dana's board decided to retain its 100pc working interests in the El Manzala, West El Manzala, West El Qantara and North El Salhiya onshore concessions.
"We look forward to maximizing the value of both our onshore producing assets and focusing our attention on testing the enormous potential of our offshore block 6 concession area where we are planning to drill an exploration well [in] Q1 2023," Dana chief executive Patrick Allman-Ward added.
Dana had already planned to retain stakes in the onshore El Matariya concession, and in particular the offshore North El Arish (block 6) concession, which holds estimated potential gas resources of more than 20 trillion ft³.
Dana produced 63,200 b/d of oil equivalent (boe/d) last year, down by 5pc from 66,200 boe/d in 2019. Some 30,300 boe/d, or just under half of the total, came from its Egyptian assets.
The company ended 2020 with a net loss of $376mn, compared to a net profit of $157mn in 2019. The sale to IPR Energy was expected to bring in as much as $236mn for Dana. The firm said is still assessing the financial impact of the cancelation.
Dana said it expected "there will be positive consequences on the company's profitability and balance sheet, and [an] improvement in its cash flow in the coming years" in large part due to "the changed circumstances in the global economy and energy markets."
