Egyptian Government Pays $20 Million to Dana Gas

Dana Gas, the Middle East’s largest regional private sector natural gas company, on Thursday said that it has received a payment of $20 million from the Egyptian Government taking the funds received in Egypt in Q4 of 2024 to $24.5 million.

It may be recalled that Dana Gas has urged the Egyptian Government last month to release $24 million from the outstanding $59 million receivables balance, which will be fully reinvested in the country.

This latest payment, which will be reinvested in the Company’s existing operations in Egypt, will allow the company 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, Dana Gas said in a regulatory filing with Abu Dhabi Securities Exchange (ADX) this morning.

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.

Consolidation of Concessions

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, 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.

Dana Gas CEO Richard Hall appreciated the Egyptian Petroleum Ministry for this payment, which reflected their continued support of Dana Gas investments in Egypt and its contribution toward strengthening Egypt’s energy security.

He said that this payment, which will be reinvested in Egypt, will increase domestic gas supply, create substantial economic value, and deliver cost savings for the nation. Dana gas is 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 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,” he said.

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.