Dana Gas, the Middle East’s largest regional private sector natural gas company, has announced that it has received a payment of approximately $20 million from the Egyptian government. This brings the total funds received in Egypt during Q4 2024 to $24.5 million. The payment will be reinvested into the company’s ongoing operations in Egypt, enabling Dana Gas to move forward with its planned investment program. This program is part of the Consolidation Agreement negotiated with the Egyptian government and is expected to be formally signed soon. The agreement, ratified by the Egyptian Parliament in early June, is a key component of the government’s strategy to bolster Egypt’s energy sector and boost domestic gas production.
“The company will also need future regular monthly payments from the Egyptian government to ensure the successful completion of all phases of the program,” a statement noted. The new agreement will consolidate Dana Gas’s existing producing concessions into a single concession with improved terms, enhancing the economic viability of future exploration and development activities. The work program, which includes six exploration and five development wells, is anticipated to increase ultimate gas recovery by 80 billion cubic feet and significantly enhance the value of Dana Gas’s assets in Egypt. This initiative will extend the operational life of Dana Gas’s assets in the country and generate cost savings of over $1 billion for Egypt’s economy by reducing dependence on imported LNG and mazut for power generation.
Richard Hall, CEO of Dana Gas, commented: “This payment, reinvested in Egypt, will boost domestic gas supply, create substantial economic value, and deliver cost savings for the nation. We are now focused on initiating the work program that will enhance production and reserves. We are also encouraged by the recent commitment from the Ministry of Petroleum and Mineral Resources to provide regular monthly payments, along with progress in resolving our overdue receivables. Future payments will be crucial for the successful execution of the next phases of the consolidation program. The latest payment from the Egyptian government further reduces our receivables and improves our liquidity position. This enhanced liquidity will allow us to consider resuming sustainable dividend payments to our shareholders.”
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