Emirati Dana Gas has put its Egyptian energy assets up for sale and has hired Tudor Pickering, Holt & Co. as advisor, Reuters reports, citing unnamed sources, just days after Dana Gas said it had failed to strike any commercial oil and gas in offshore Block 6.
Earlier this year, when the company began drilling at Block 6, it said it could hold as much as 4 trillion cu ft of natural gas.
Egypt is one of the hot spots in natural gas exploration right now, after the discovery of the giant offshore Zohr field, which Italy???s Eni discovered in 2015. Energy companies have committed some US$10 billion to exploration in Egypt this year, after the government awarded 12 exploration licenses to players including BP, Exxon, and Shell in February.
Yet Dana Gas is going in another direction: the company plans to focus entirely on its operations in the semi-autonomous region of Kurdistan in Iraq, according to one of the Reuters sources. They added that Dana had made the decision to leave Egypt and focus on Kurdistan because of the greater potential for growth. Also, the Emirati company has higher capital expenditure requirements in Kurdistan, the source said.
Dana has stakes in two gas fields in Kurdistan and, according to a new audit report cited by Dana in a regulatory filing, they could turn out to be the largest in Iraq. According to the audit, Dana???s share of the reserves of the two fields as minority shareholder in the JV that operates them came in at 1 billion barrels of oil equivalent, up from 950 million barrels from earlier reserve estimates.
One of the fields, Khor Mor, seems to be particularly promising. Dana plans to raise production from it to 650 million cu ft daily by 2022 and further to 900 million cu ft daily by 2023.