Dana Gas wins arbitration on sale of Egypt assets

Dana Gas will continue to operate its mature oil and gas assets in Egypt after winning an arbitration case filed by Houston-based IPR Energy, the Abu-Dhabi listed firm said today.

The arbitration was initiated in April by IPR over Dana's decision to terminate a deal to sell them the assets, but the tribunal at the London Court of Arbitration ruled in Dana's favour on 19 June.

An initial agreement for the sale of Dana's its Egyptian assets to IPR was announced last October last year as part of the company's strategy to reduce its debt and focus on developing resources in the Kurdistan Region of Iraq.

The two companies had hoped to complete the deal by 14 April. But Dana's board ultimately decided to retain its 100pc working interests in the El Manzala, West El Manzala, West El Qantara and North El Salhiya onshore concessions after satisfying conditions for the sale "proved problematic between the parties."

IPR disputed Dana Gas' right to terminate the agreement, but the award means Dana can continue to own and operate the assets.

Dana Gas is currently producing around 30,000 b/d of oil equivalent (boe/d) from 14 development leases. This accounts for just under half the company's 63,200 boe/d output in 2020.

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. The first exploration well at block 6 is scheduled for drilling in Q1 2022, Dana said.

By Adal Mirza