Dana Gas share of KRI reserves up 10%
Dana Gas, Middle East’s largest private sector natural gas company, said on Sunday its share of hydrocarbon reserves at Pearl Petroleum Company’s Khor Mor and Chemchemal fields in the Kurdistan Region of Iraq (KRI ) increased by 10 per cent following a re-certification of reserves.
The independently audited report, prepared by Gaffney Cline Associates (GCA), showed that the total share for Dana Gas, which has a 35 per cent shareholding in Pearl Petroleum, is now equivalent to 1,087 million barrels of oil equivalent (MMboe), up from 990 MMboe when GCA first certified the fields in April 2016. The measure is based on proved plus probable (2P) hydrocarbons.
“This confirms that the fields located in the KRI could be the biggest gas fields in the whole of Iraq,” the Abu Dhabi-listed energy producer said.
Dr Patrick Allman-Ward, CEO of Dana Gas, said the Gaffney Cline report has independently confirmed Dana Gas’ 2P reserves in our KRI assets at over 1 billion barrels of oil equivalent. “It is also satisfying to see that our auditors have formally booked oil reserves for the first time in Khor Mor. We believe that this is just the tip of the iceberg confirming our estimate of oil resource potential of over seven billion barrels. These additional resource declarations will underpin our future development plans which will provide a reliable source of energy to meet the needs of electricity generation as well as industrial development in the region.”
Earlier in the year, Pearl Petroleum, a consortium majority-owned by Dana Gas and its affiliate Crescent Petroleum, signed a 20-year gas sale agreement with the Kurdistan Regional Government that will facilitate the production and sale of an additional 250 MMscf/d of gas. Pearl Petroleum’s expansion plan will see output increase to 650 MMscf/day in 2022, and then to 900 MMscf/day by 2023 from the current 400 MMscf/day. “With the price of oil ranging between $60 to $70 per barrel, each of these two new gas production trains will generate between $175 to $200 million to the company’s share of revenue and project’s cash flows per annum,” Dana Gas said.
Meanwhile, Dana Gas has reportedly hired investment bank Tudor, Pickering, Holt & Co. to advise it on the sale of its Egyptian assets, worth over $500 million, as the company shifts its focus to its Kurdistan operations.
Dana’s exploration and production assets in Egypt are onshore the Nile Delta except for Block 6 in the Eastern Mediterranean Sea. In May, Dana began drilling at the offshore Merak well in Block 6, saying it could hold up to four trillion cubic feet of gas.
On Sunday Dana said in a bourse filing that the drilling has not found commercial hydrocarbons and that the well is being abandoned. It added its operations in Egypt continue production normally.
The decision to sell in Egypt is “strategic” as Dana wants to focus its resources on investments in KRI, where it has large capital expenditure requirements and sees potential for growth, according to a report.
Source: Khaleej Times