Egypt : Dana Gas sells its assets in Egypt for $236M
- 26 October 2020 / News / 79 / Khaled Zaki
CAIRO – 25 October 2020: Dana Gas PJSC has entered into a binding agreement with IPR Wastani Petroleum Ltd, a member of the IPR Energy Group (“IPR”) for the sale of its onshore Egyptian producing oil and gas assets for a consideration of up to $236 million including contingent payments.
IPR is a leading private E&P operator in Egypt, with 9 active concessions, and over 3 decades of expertise in enhancing the recovery of mature producing oil and gas fields.
“This transaction is the result of a comprehensive formal sales process initiated pursuant to a strategic review of the Company’s Egyptian business, and follows engagement with a number of prospective industry buyers commencing in Q2 2019. This resulted in four offers being received,” Dana Gas said in a statement Sunday.
It added that negotiations with the successful bidder extended over a longer period primarily due to the restrictions that COVID-19 placed on travel and communications and the impact of the pandemic on the world economy and the resulting sharp drop in global oil and gas prices.
“This asset sale is in line with Dana Gas’ strategic goals of strengthening its balance sheet and focusing on the development of its world class assets in the Kurdistan Region of Iraq (“KRI”).”
The company clarified that the perimeter of the transaction includes Dana Gas’ 100 percent working interests in the El Manzala, West El Manzala, West El Qantara and North El Salhiya onshore concessions and associated development leases. In the first half of 2020, these concessions produced 30,950 barrels of oil equivalent per day, and contributed $38 million to the Company’s EBITDA. Transfer of ownership, responsibilities and staff, will take place upon execution and formal approval of the deeds of assignment for the various concessions.
The Company, through its wholly-owned subsidiary Dana Gas Egypt, will retain its interests in its onshore and offshore exploration concessions, respectively El Matariya (Block 3) and North El Arish (Block 6), and will actively pursue maximizing the value of these assets.
Under the terms of the sale, the consideration comprises (i) a base cash consideration of $153 million, including the net working capital associated with the assets and before any closing adjustments, and (ii) contingent payments of up to $83 million subject to average Brent prices and production performance between 2020-2023 as well as the realization of potential third party business opportunities. Upon closing, the base consideration will be adjusted by the collections received and payments made by the Company during the intervening period between the effective date, and the closing date.
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