Dana Gas commences drilling Merak-1 well, offshore Egypt - GulfToday

Dana Gas commences drilling Merak-1 well in offshore Egypt

Dana-Gas

The discovery of a world-class resource of this size could easily support an offshore field development.

Dana Gas on Tuesday announced it has commenced drilling operations yesterday at its Dana Gas begins drilling at Merak-1 well, offshore Egypt. The location is in 755 metres of water in the North El Arish concession, also known as Block 6. This block is in the Eastern Mediterranean Basin where other giant natural gas discoveries have been made in recent years.

The Merak-1 well will be drilled with the 6th generation dynamically positioned drillship “Tungsten Explorer”, on hire from ADVantage Drilling Services SAE - a JV between ADES International and Vantage Driller II Co (a subsidiary of Vantage Drilling). The well is planned to take approximately 70 days to drill.

Prospective resources to be added from this well in the case of exploration success could reach 4 trillion cubic feet of natural gas. The discovery of a world-class resource of this size could easily support an offshore field development. If Merak-1 is successful, additional exploration and appraisal drilling will follow.

Dana Gas purchased the Centurion assets onshore the Nile Delta in Egypt in 2007. Since then, 48 exploration wells have been drilled with a 67 per cent success rate resulting in 25 new pool discoveries. Proved plus probable reserves were increased by over 120 per cent and production by 50 per cent. Dhs, early Miocene prospects in the existing development leases and in El Mataraya Onshore which is a joint venture block operated by BP, where an exploration well is planned to be drilled later this year. Dana Gas production from Egypt is currently over 34,000 boepd.

Dr. Patrick Allman-Ward, CEO of Dana Gas, commented, “We have commenced an exciting exploration programme in our Egypt Block 6 Concession Area. Until now, all of our Egyptian operations have been onshore the Nile Delta. Whilst we continue to optimise production from our 14 existing fields and explore new prospects in the Nile Delta region, the potential addition of new world class gas resources offshore presents an opportunity for significant growth in our Egypt business that would be transformative for Dana Gas.”

Earlier, Dana Gas announced its inclusion in the Morgan Stanley Capital International (MSCI) for Global Small Cap Indexes, effective 27 May 2019.

The MSCI Emerging Markets Small Cap Index captures small-cap representation across 24 Emerging Markets countries. With 1,571 constituents, the index covers approximately 14% of the free float-adjusted market capitalisation in each country. The small cap segment tends to capture more local economic and sector characteristics relative to larger Emerging Markets capitalization segments. Dana Gas has joined the benchmark which includes 23 emerging markets countries, including the United Arab Emirates.

Patrick Allman Ward, CEO of Dana Gas, commented: “The inclusion of Dana Gas in MSCI’s Emerging Markets Small Cap Index puts the Company firmly on the radar of institutional investors. Gaining representation in the index is testament to the progress we have made over the last year, specifically with regard to the successful Settlement Award in Kurdistan Region of Iraq and also the two completed projects in 2018 which increased our production substantially and will add $50 million to our revenue this year.”

Dana Gas is the Middle East’s first and largest regional private sector natural gas Company established in December 2005 with a public listing on the Abu Dhabi Securities Exchange (ADX). It has exploration and production assets in Egypt, Kurdistan Region of Iraq (KRI) and UAE, with 2P reserves exceeding one billion boe and average production of 63,050 boepd in 2018. With sizeable assets in Egypt, KRI and the UAE, and further plans for expansion, Dana Gas is playing an important role in the rapidly growing natural gas sector of the Middle East, North Africa and South Asia (MENASA) region.

Dana Gas in the month of April announced that during Q1 2019, Pearl Petroleum Company Limited (Pearl Petroleum) has received $112 million (Dhs411mm) from the sale of condensate, LPG and gas in the Kurdistan Region of Iraq (KRI).

Dana Gas is a 35% shareholder in Pearl Petroleum and accordingly, its share of such receipts by Pearl Petroleum is $39 million (Dhs143mm). This presents a 117% increase compared to the Company’s Q1 2018 share of collections which stood at $18 million. As of today, Pearl Petroleum has no overdue receivables in the KRI.

Dr Patrick Allman-Ward, CEO, Dana Gas, said: “We have had a very positive start to year in the KRI. Our debottlenecking project which we completed in October 2018 has increased our production output by 30% to 400 MMscf/d. We have begun to see the impact of the additional production on our Q1 collection, which has doubled.”

In February of this year, Pearl Petroleum signed a new 20-year Gas Sales Agreement (GSA) with the Kurdistan Regional Government (KRG) to enable production and sales of an additional 250 MMscf/d. The Consortium aims to bring this production on-stream by 2021 as part of their expansion plans to raise output from the current 400 MMscf/day to 650 MMscf/day in 2021, and then to 900 MMscf/day by 2022.

WAM / Agencies