Dana Gas Egypt signed a gas production enhancement agreement (GPEA) with the Egyptian Natural Gas Holding Co. (EGAS) and the Egyptian General Petroleum Co. (EGPC). According to the agreement, announced 30 September, Dana Gas will begin a 7-year program in the next few months.
The company will drill 37 new wells and carrying out maintenance of existing wells. It expects to produce about 270billion cu. ft (Bcf) of natural gas, 8 to 9 million bbl of condensate, and about 450,000 tons of LPG (liquefied petroleum gas) during the 7-year period.
“Peak production is expected to occur in 2017, with incremental daily production of approximately 160 MMscf gas and 5600 bbl of condensate,” the company said.
“In addition to enhancing the value of Dana Gas Egypt’s assets into which all of the company’s GPEA revenues will be dedicated, the GPEA-generated revenues will eventually allow reduction of the company’s Egyptian outstanding receivables of $280million to nominal levels by 2018, from the proceeds of direct sales of all of the incremental condensate at international market prices.”
CEO of Dana Gas Patrick Allman-Ward said the newly formed GPEA agreement with the Egyptian government “is a significant milestone for Dana Gas in Egypt.” He said the arrangement will allow the company to “recover the overdue receivables due to them, unlock the substantial value of Dana Gas’ current Egyptian assets” and deliver optimum value to their shareholders in the long-term.
Allman-Ward added that Dana Gas has just produced its 100 millionth boe in Egypt, after having started operations in 2007, reflecting the company’s progress in developing Egypt’s energy resources.
New Nile Delta blocks
Dana Gas recently won bids for two new Nile Delta concessions. The company said its wholly owned subsidiary has won gas exploration access to the North Elsalhiya area, known as Block 1, and El Matariya, Block 3.
“Block 1 represents an extension of Dana Gas’ existing successful conventional gas business,” allowing the company to control 100% of the area which covers 1527sq km.
Dana Gas and BP are equal partners in the Block 3 concession area (50% each).
A total of 10 blocks were offered in EGAS’ international bid round, which launched on 30 December 2013. Deloitte said that a total of 26,012sq km were offered, with three onshore and five offshore blocks.
Blocks offered in the EGAS licensing round shaded in blue. Image from Deloitte PetroView.
Related OE news:
CEO Richards departs Dana, 3 December 2013
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