Dana Gas inks Egypt exploration deal
Sharjah, February 18, 2014
Dana Gas, a leading regional private sector natural gas company, has signed an exploration deal for the North El Arish (Block 6) Concession Area, offshore the eastern Nile Delta.
The 2,980 sq km block was awarded in April 2013 as part of a competitive bidding process, stated the Abu Dhabi-listed company.
This is Dana’s first offshore block in Egypt, covering water depths from 20 up to a 1000 m.
Multiple play types have already been identified within the acreage and plans for the first exploration phase of four years, which has now commenced, includes seismic acquisition and the drilling of one exploration well.
According to Dana, the total average production in Egypt grew by 14 per cent to 36,700 bpd from 32,200 bpd the year before.
The UAE gas company said it had also won a 32sq km block in Balsam located in the West El Manzala Concession, Nile Delta region.
With this win, the number of current leases have risen to thirteen. Alongside the award of Balsam, Dana Gas has secured an 18 sq. km increase at its El Basant and Sama Development Leases in West El Manzala and West Al Qantara Concessions respectively.
These extensions bring the full extent of the Allium-1 and West Sama-1 well discoveries, made in H2 2012, within development leases awarded to Dana Gas.
CEO Dr Patrick Allman-Ward expressed delight at signing the North El ArishConcession Agreement. "We consider this block to be highly prospective and it forms an important part of Dana Gas’ growth portfolio. Dana remains fully committed to developing the natural gas industry in Egypt, and we are extremely optimistic about the future."
"We are continuing with constructive dialogue with the Egyptian Government in order to further reduce the outstanding receivables as soon as possible," he stated.
Dr Mark Fenton, the general manager at Dana Gas Egypt, said the award of these development leases containing the Balsam, Allium and West Sama discoveries has allowed the company to strengthen its position in the key gas rich Nile Delta region.
"These discoveries, together with prior discoveries such as the South Abu El Naga and Salma-Tulip Fields which have been brought on stream in 2013, create development opportunities that underpin our plans for sustained production growth in Egypt," he stated.
Dana Gas, he said, has realigned its portfolio in Egypt to focus on the most profitable future growth opportunities for the company in its core development leases and new exploration concession areas.
"As a result of this realignment and the need to execute an ambitious investment program, Dana Gas has sold its 50 per cent interest in its Komombo assets which comprise the Al Baraka and West Al Baraka Development Leases to Mediterra Energy’s subsidiary Sea Dragon Energy (Komombo) for $6.3 million in cash plus the working capital adjustments," noted Dr Fenton.
At their peak the assets produced 1,100 bbls of oil per day reducing to an average of approximately 400 barrels of oil a day in 2013. Completion of the Komombo sale is subject to customary closing conditions, including Egyptian Government approvals, he added.
Dana Gas is currently the 6th largest gas producer in Egypt, and operates in the Nile Delta through the El Wastani Petroleum Company (Wasco), Dana’s joint-venture company with the Egyptian Natural Gas Holding Company (EGAS), where almost all of its 695 employees are Egyptians.-TradeArabia News Service