UAE's Dana Gas says has received 'a number of bids' for Egypt assets

Reuters , Wednesday 12 Feb 2020

United Arab Emirates-based Dana Gas (DANA.AD) said on Wednesday it has received bids from some companies for its assets in Egypt.

“We have received a number of bids from a number of companies,” the company’s CEO Patrick Allman-Ward said on an earnings call, declining to say how many bids or from which companies.

The CEO said a final decision had not been taken on whether the company will sell its Egyptian assets. He said offers would be submitted to the company’s board for review and that a decision is expected by the end of March.

Allman-Ward said the company would cover its outstanding sukuk, or Islamic bonds, of $397 million, due on Oct. 31, with the potential sale of its Egypt assets.

The company is in talks with banks to refinance the sukuk if the sale does not cover the whole amount, or if there is no sale, he said.

“We received bids for the entire package of onshore and offshore” assets in Egypt, the CEO said, adding that the bidders were given flexibility to only bid for development leases and exclude exploration deals.

Production from Egypt fell 4% to 33,000 barrels of oil equivalent per day (boepd) in 2019 from 34,500 boepd in 2018, the company said in a statement.

Allman-Ward said the company was disappointed by the Egyptian government failing to make overdue payments by the end of 2019.

The payments are part of $111 million in receivables expected from Egypt. He said part of that amount is overdue and part is in the process of payment.

The company, the Middle East’s largest regional private sector natural gas company, made a profit of 575 million dirhams($156.56 million) in 2019 from a loss of 682 million dirhams in 2018. Allman-Ward said it was Dana Gas’ highest full-year profit in more than seven years.

Overall production rose 5% to 66,200 boepd last year from 63,050 boepd in 2018.

Revenue fell to 1.68 billion dirhams in 2019 from 1.72 billion dirhams in 2018 “due to lower realized prices and lower production in Egypt partly offset by increase in production in KRI.”

Allman-Ward said the company was pushing ahead with the development of its assets in the Kurdistan Region of Iraq, where over 90% of Dana Gas’ proven reserves are located.

“The company’s expansion plan in the KRI is on schedule, with delivery from the first gas train expected in 2022. This will raise production to 650 mmscfd.

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