Dana Gas Reports Strong Results in Egypt for Q1 2017
Dana Gas Egypt’s production was solid in Q1 2017. The onshore gas processing plant capacity at El Wastani remained at maximum output. Total output for the first quarter was 40,950 boe/d, a 24% increase on the 33,000 boe/d output in Q1 2016. In Q1 2017, collections in Egypt were $13m, representing 42% of total billings. Total trade receivables in Egypt increased to $283m from $265m as of 31 December 2016, according to Dana Gas’ Press Release.
“Whilst we focus on short to medium term cash preservation, we remain excited about the potential for medium-term growth opportunities in Egypt and the development of our world class assets in the Kurdistan Region of Iraq over the medium to long term. Together with the potential damages claims from the arbitration cases the total value of Dana Gas’ assets are very significant. The Company needs time to realise this value, as well as collect on the circa $1b owed by the KRG and Egypt, for the benefit of all its stakeholders. “, said, Dana Gas’ CEO, Dr. Patrick Allman.
Moreover, the Company has significantly reduced its capital and operational expenditure plan for 2017, focusing on completing projects in progress or asset critical projects. In the second quarter 2017, the El Wastani plant is planned to be shut down either in full or in part for an estimated ten day period whilst work is carried out to improve plant performance and reliability.
After the end of the first quarter 2017, the Company concluded the first international condensate sale in Egypt under the Gas Production Enhancement Agreement (GPEA). The first cargo of approximately 150,000b of Wastani condensate was loaded on 15 April 2017. The buyer issued a letter of credit under which payment amounting $7.2m will be paid directly to Dana Gas in US dollars. The cash proceeds generated from the Government’s share of the incremental condensate sales will contribute to paying down the outstanding receivables owed to Dana Gas by the Egyptian Government.