Dana Gas Company announced that it has received about $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 the it to proceed with its planned investment program, a major milestone for the Company’s operations in Egypt.
The program 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. Dana Gas will also require future regular monthly payments from the Egyptian Government to ensure all phases of the program will be completed.
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 program is expected to increase ultimate gas recovery by 80 billion cubic feet (bcf) including six exploration and five development wells, 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, commented “I would like to express my appreciation to the Egyptian Petroleum Ministry for this payment, which reflects their continued support of Dana Gas investments in Egypt and its contribution toward strengthening Egypt’s energy security.”
“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 program that will enhance production and reserves. In the meantime, we are encouraged by the recent commitment from the Ministry of Petroleum and Mineral Resources (MoPMR) 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 program.
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,” he added
