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Dana Gas PJSC has signed a binding agreement with IPR Wastani Petroleum to sell its onshore producing oil and gas assets in Egypt for $236m, which also includes contingent payments.
IPR Wastani is a member of the Egyption private E&P operator IPR Energy Group (IPR).
Dana Gas noted that the assets sale aligns with its strategic goals of increasing its balance sheet, as well as focusing on the development of its assets in the Kurdistan Region of Iraq.
The deal comprises a base cash consideration of $153m, including the net working capital associated with the assets and before any closing adjustments, and contingent payments of up to $83m subject to average Brent crude prices, as well as production performance between 2020 and 2023.
Dana Gas CEO Patrick Allman-Ward said: “Our aim is always to maximise returns to shareholders and optimise our portfolio. The sale of our Egyptian assets forms a key part of this strategy. Completion of the sale process will allow us to strengthen our balance sheet and focus our attention on the development of our world-class assets in the KRI, of which our current share of reserves are over one billion barrels of oil equivalent, with considerably more resources for realisation and development.
“The quality of our remaining assets in Egypt are excellent and we retain an interest in two exploration concessions. Our offshore exploration block in particular is highly prospective.
“Over the last 12 years Dana Gas has delivered on a tremendous track record, doubling our 2P reserves in Egypt and increasing our production by 50%. Our activities and investments in Egypt’s gas sector have supplied additional gas for power generation displacing heavy fuel oil thereby contributing significantly to the Egyptian economy.”
The transaction is expected to be completed by early next year.
It is, however, subject to receiving approval from the Egyptian Ministry of Petroleum and Mineral Resources.
Dana Gas will use the funds generated from the sale towards debt clearance and other general corporate purposes.