- Mar 12, 2019
- Dana Gas
Mr. Saif Sayyah Al Mansouri
Head of Listed Companies Department
Abu Dhabi Securities Exchange
Subject: Dana Gas disclosure on incremental gas production in KRI
With reference to your letter dated 07/03/2019, please be informed that the signed Gas Sales Agreement (GSA) is in relation to the second Phase of expansion in the KRI, that aims to increase Pearl Petroleum's (Dana Gas 35%) gas and condensate production by 63% from 400 mmscf/d and 15,000 bbl/d to 650 mmscf/d and 25,000bbl/d respectively.
The financial impact of this expansion is directly related to the oil price. With oil price ranging between $60-$70 per barrel we expect the new phase of expansion to add $175-$200 million (AED 641-733 million) to Dana Gas share of revenues and project's cash flows per annum. The dividends from Pearl to Dana Gas will be dependent on the investment program and operating cost at Pearl.
The financial impact of this transaction will come into effect when the construction of the new capacity is completed in 2021 and the incremental production starts to flow.
The Company and its partners are also planning to further expand production by an additional 250 mmscf/d in 2022 which is expected to have a similar financial impact and will take production of gas and condensate up to 900 mmscf/d and 35,000bbl/d respectively.
Chief Executive Officer