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Dana Gas receives $20 million payment in Egypt

Funds required to initiate investment programme that includes drilling 11 wells

Dana Gas, the Middle East’s largest regional private sector natural gas company, on Thursday announced that it has received a circa $20 million payment from the Egyptian government. This amount takes the funds received in Egypt in Q4 2024 to $24.5 million.

This payment, which will be reinvested in the company’s existing operations in Egypt, will allow Dana Gas to proceed with its planned investment programme. The programme is part of the Consolidation Agreement negotiated with the Egyptian government and expected to be formally signed shortly. The agreement, which was ratified by the Egyptian Parliament in early June, is part of the government’s strategic initiative to support Egypt’s energy sector and increase domestic gas production. “The company will also require future regular monthly payments from the Egyptian government to ensure all phases of the program will be completed,” a statement said.

The new agreement will see the company consolidate its existing producing concessions into a single concession with improved terms, which will enhance the economics of any future exploration and development activities. The work programme, which includes six exploration and five development wells, is expected to increase ultimate gas recovery by 80 billion cubic feet and significantly increase the value of Dana Gas Egypt assets.

This initiative will extend the life of Dana Gas’s assets in the country, and yield cost savings of over $1 billion for Egypt’s economy by reducing reliance on imported LNG and mazut for power generation.

Richard Hall, CEO of Dana Gas, said: “This payment, which will be reinvested in Egypt, will increase domestic gas supply, create substantial economic value, and deliver cost savings for the nation. We are now focused on starting the work programme that will enhance production and reserves. In the meantime, we are encouraged by the recent commitment from the Ministry of Petroleum and Mineral Resources to provide regular monthly payments, along with progress towards resolving our overdue receivables. Future payments will be key to enabling the successful execution of the next phases of the consolidation programme. The latest payment from the Egyptian government further reduces the company’s receivables and enhances its liquidity position. The improved liquidity will allow the company to consider the resumption of sustainable dividend payments to our shareholders.”