Posted on

Dana Gas achieves 50% Gas Production Growth in 3 yrs

Dana Gas and its partner, Crescent Petroleum, have reported record sales gas production from their operations in the Kurdistan Region of Iraq (KRI), reaching 452 million cubic feet of gas per day (MMscf/d) at the end of 2021.

The production milestone is the culmination of numerous process improvements at the Khor Mor gas plant, including a bypass project completed in 2020 as well as a de-bottlenecking programme earlier in 2018. Together, the process improvements have grown the production by 50% from 305 MMscf/d in 2018.

Dana Gas and Crescent Petroleum jointly operate the Khor Mor and Chemchemal gas fields on behalf of the Pearl Petroleum consortium, supplying the gas which enables much needed electricity generation in the KRI, and also producing close to 16,000 barrels of condensate and 1,000 tonnes of LPG per day. The successful process improvements will be reinforced by the KM250 expansion project at the plant which is currently under implementation, and will increase total capacity by an additional 55% to 700 MMscf/d by April 2023.

Major works for the US$630 million KM250 expansion project resumed in April, 2021 after a delay of one year due to the COVID pandemic. The project is now on track for the new target start date of April 2023. As part of the expansion works, the Company is also preparing to drill up to five development wells, which are scheduled to commence production in March 2022.

The KM250 Gas Expansion Project is supported by a $250 million financing agreement for 7 years with the U.S. International Development Finance Corporation (DFC) which was announced in September 2021. After completion of the KM250 project, the partners also plan a further KM500 train that would raise production to almost 1 billion cubic feet per day to meet rising demand for cleaner burning natural gas and electricity generation in the Kurdistan Region and all of Iraq.

Majid Jafar, CEO of Crescent Petroleum and Board Managing Director of Dana Gas, said:

“The achievement of this production milestone underscores the progress we continue to make at Khor Mor to meet the rapidly growing demand for natural gas in the KRI. Despite the challenges the whole world has faced over the past two years, we are proud to have continued delivering uninterrupted supply of clean-burning natural gas to support the KRI economy and enable a healthy recovery. Meanwhile our major expansion plans at the Khor Mor and Chemchemal fields to target 1 billion cubic feet per day in the coming few years will enable improved services across the region for years to come.”

Dr Patrick Allman-Ward (pictured), CEO of Dana Gas, said:

“This milestone is testament to our people and their hard work making consistent production growth possible at our Khor Mor gas plant. Our continued investments since 2018, notably the Khor Mor de-bottlenecking and bypass projects, have allowed us to deliver reliable supplies of clean energy to support the KRI economy and its people, with enhanced economic and environmental benefits which will increase as we further grow production.”

Total investment by the Pearl Petroleum consortium exceeds US$2.3 billion to date, with total cumulative production of over 360 million barrels of oil equivalent (boe) of natural gas and liquids. The uninterrupted supply of gas to power plants in Erbil, Chemchemal and Bazian provides over 80% of the KRI’s power generation and has resulted in significant fuel cost savings through substitution of diesel representing both environmental and economic benefits for the Kurdistan Region and Iraq as a whole.

The displacement of diesel fuel for power generation in the KRI with gas has also enabled emissions savings of 42 million tonnes of CO2, thereby making a major contribution to reducing greenhouse gas emissions and reducing local air pollution in the region as well as supporting the transition to better energy sources to tackle global climate change.

(Source: Dana Gas)

The post Dana Gas achieves 50% Gas Production Growth in 3 yrs first appeared on Iraq Business News.

Posted on

Khor Mor gets $250m Financing from DFC

Pearl Petroleum, the consortium led by Dana Gas and Crescent Petroleum of the UAE, has signed a $250 million financing agreement with the U.S. International Development Finance Corporation (DFC) to support the gas expansion works currently under way at the Khor Mor gas plant in the Kurdistan Region of Iraq (KRI).

DFC is the development finance arm of the U.S government and proceeds from the 7-year DFC financing will support an increase in gas production capacity by 50% to 690 million standard cubic feet (scf)/day to meet rising demand for clean natural gas for electricity generation and industry in the KRI. The total project cost is $630 million and the remaining financing has already been secured through a regional bank facility and the EPC contractor.

The KM-250 project is the first stage of a two-train expansion project at Khor Mor that aims to boost total production capacity to approach 1 billion scf/day. Work resumed in April 2021 after onsite construction was halted last year due to the COVID pandemic and is currently on track for completion by April 2023.

Total investment by Pearl Petroleum at Khor Mor to date exceeds US$2.1 billion with total cumulative production of over 341 million barrels of oil equivalent (boe) in natural gas and liquids. The uninterrupted supply of gas to power plants in Erbil, Chemchemal and Bazian has resulted in significant fuel cost savings and economic benefits for the Kurdistan Region and Iraq as a whole.

The gas produced to date has enabled emissions savings of 42 million tonnes of CO2 by displacing diesel fuel in power generation in the KRI, thereby making a major contribution to reducing greenhouse gas emissions and local air pollution in the region as well as supporting the transition to better energy sources to tackle global climate change.

Between 2018 and 2021, the Khor Mor Gas Plant also benefitted from a 45% production increase through an optimization of the facility bringing current total production to 106,000 barrels of oil equivalent per day (boepd). The project is today the largest regional private sector upstream gas operation in Iraq.

Mr. Majid Jafar (pictured), CEO of Crescent Petroleum and Board Managing Director of Dana Gas, commented:

“This financing agreement with DFC underscores the importance of developing the natural gas resources in the KRI to support regional economic development and growth. Despite the global challenges presented by the COVID pandemic, we have continued to maintain our record of uninterrupted operations and even managed to grow production. The DFC agreement is a testament to our successful track record and further highlights the potential of these resources and the bright future for the KRI.”

Dr. Patrick Allman-Ward, CEO of Dana Gas, added:

“With our partners in Pearl Petroleum we are proud to be further developing the gas sector of the Kurdistan Region of Iraq, delivering expanded supply of cleaner energy, and supporting local economic development. This agreement underscores our continued confidence in the region and its long-term prospects.”

Mr. Dev Jagadesan, Acting CEO of DFC, said:

“DFC’s investment in the Khor Mor expansion will substantially increase access to energy for people all across the Kurdistan Region of Iraq. This highly developmental project represents the United States’ continuing investment in the KRI.”

In April 2007, Dana Gas and Crescent Petroleum entered into an agreement with the KRG for exclusive rights to appraise, develop, produce, market, and sell petroleum from the Khor Mor and Chemchemal fields in the KRI. Production from a newly built plant at Khor Mor began just 15 months later, in October 2008, an industry record. In 2009, Pearl Petroleum was formed as a consortium with Dana Gas and Crescent Petroleum as the majority shareholders, and with OMV, MOL, and RWE joining the consortium subsequently with a 10% share each.

Full-time staff at the operation number over 500, with over 85% local staff, including many in senior management positions. The companies have implemented a corporate social responsibility program to support local communities with equipment and supplies to deal with the COVID pandemic such as ventilators, sanitizers and protection equipment, in addition to a pledge to donate 100,000 vaccines to be administered in those local communities. This is in addition to ongoing support with local education, health and power supply as well as humanitarian aid for persons displaced from conflict zones as well as orphans. These initiatives assist the local communities in improving their standard of living, health, well-being, security and stability and the development of human capital.

(Source: Dana Gas)

The post Khor Mor gets $250m Financing from DFC first appeared on Iraq Business News.

Posted on

Dana Gas Expansion Plans “Well Underway” in Kurdistan

By John Lee.

Dana Gas PJSC announced that its H1 2021 collections from the Kurdistan Region of Iraq (KRI), and Egypt have increased 106% year-on-year to $185 million (AED 678m), the highest level in more than five years.

Dana Gas, which owns a 35% stake in Pearl Petroleum, saw its share of collections from sales of condensate, LPG and gas in the KRI jump 85% to $87 million in the first half 2021 as compared to $47 million in the same period the previous year.

The Company received cash dividends of $48.3 million from Pearl Petroleum over this period. For the same period, the Dana Gas share of Pearl Revenue was $87 million, EBITDA $74 million, Net Income $57.4 million, Cash Balances $61 million and Gross Debt $93 million.

The Company share of total KM 250 expansion CAPEX is $220 million, which will be funded at the Pearl level. Dana Gas share of Pearl Petroleum production for the first half 2021 averaged 150 MMscf/d of gas, 5,250 bbls/d condensate and 350 MT/d of LPG.

In Egypt, Dana Gas collected $98 million during H1 2021, compared to $43 million received in the same period of 2020, representing a 128% increase.

Dr Patrick Allman-Ward, CEO of Dana Gas, said:

“This is one of our best collection periods in the past several years, driven and supported by the strong rebound in oil prices. The respective governments of both the KRI and Egypt are meeting their payment obligations, ensuring the petroleum industry investors are receiving their current monies on time and catching up on overdue payments.

“This provides us with the confidence to reinvest in our operations, notably in the KRI where our expansion plans are well underway. We are in the process of constructing our new KM250 gas train which is on track for first gas in Q2 2023. In Egypt, we continue to work diligently to maintain production and to prepare for drilling our exciting exploration well in our offshore Block 6 Concession Area which holds material potential of over 20 Tcf of gas resources.“

(Source: Dana Gas)

The post Dana Gas Expansion Plans “Well Underway” in Kurdistan first appeared on Iraq Business News.

Posted on

Dana Gas to Increase Drilling in Iraqi Kurdistan

Dana Gas PJSC, the Middle East’s largest regional private sector natural gas company, today announced its Preliminary Unaudited Financial Results for the full year ended 31 December 2020.

The Company reported a Net Profit of $36 million (AED 131mm) versus $88 million (AED 322mm) in 2019, excluding one-off non-cash impairments and other income. Including these one-offs, the Company reported a Net Loss of $376 million (AED 1.4bn) versus a Net Profit of $157 million (AED 575mm).

A total of $412 million (AED 1,51bn) of impairments were incurred mostly related to the sale of Dana Gas Egypt onshore assets.

Dana Gas’s continued operations (Kurdistan Region of Iraq) contributed an annual net profit of $32 million reflecting the profitability of the remaining business despite the challenging year caused by the COVID-19 pandemic.

Revenue was $349 million (AED 1.27bn) in 2020 compared to $459 million (AED 1.68bn) in 2019 due to both lower realised prices and lower production in Egypt.

The Company’s robust, long-standing programme to control operating expenses helped to effectively navigate the challenging market environment in 2020. G&A costs were reduced by a further 20% year-on-year.

Dana Gas fully redeemed its outstanding Sukuk on schedule in October 2020. The Company closed the year on a strong financial footing, and maintains a positive financial outlook for 2021.

Dr Patrick Allman-Ward (pictured), CEO of Dana Gas, commented:

“The world experienced unprecedented shocks in 2020 with the COVID pandemic and its impact on the global petroleum markets with prices collapsing to levels not seen for over 20 years. Nevertheless, Dana Gas has shown real resilience both from an operational as well as financial perspective.

“When the pandemic struck, our first priority was the health and safety of our staff. However, we managed to keep our operations on-stream by implementing the most stringent health and safety measures. We not only managed to keep production levels up, but we also carried out a de-bottlenecking project on our Khor Mor plant in July which added a total of 50 MMscf/d of production capacity. In December we consistently obtained record production levels of over 440 MMscf/d. This extraordinary operational performance under the most testing of circumstances is testament to the commitment, dedication and hard work of our staff who have been outstanding in this challenging time.

“Despite the challenges imposed by the global pandemic, we exited the year in a robust financial position with a strong balance sheet, having agreed upon the sale of our Egypt onshore assets, redeeming our outstanding Sukuk and entering into a new credit facility at a lower interest rate.

“In 2021, we aim to advance the development of our world class assets in the KRI, where over 90% of Dana Gas’s proven reserves of over 1 billion boe are located, while concurrently moving ahead with our plans to prepare for the drilling of the next exploration well in Block 6 in Egypt, which holds exciting, material upside potential.“

Operations & Production

Average group production declined 5% during 2020, averaging 63,200 boepd versus 66,200 boepd in 2019. Production was boosted by a 2% jump in output from the KRI, which reached 32,250 boepd. This helped to offset a drop in production from Egypt, which fell 8% to 30,300 boepd versus 33,000 boepd in 2019 as a result of natural field declines.

Fourth quarter 2020 average group production was up 2% to 63,600 boepd. The KRI added 9% to reach 33,250 boepd in fourth quarter production because of the successful completion of the plant bypass project.

The KRI and Egypt operations have continued without interruption and remain fully functioning, un-impacted by the Covid pandemic. The restarting of the expansion plans in the KRI demonstrates that all the parties working on the project are fully committed to executing the expansion project as quickly and as safely as possible. The Pearl consortium remains focused on completing the first 250 MMscf/d gas processing train in Q1 2023 and is also examining ways to bring forward the current schedule.

In 2021 the Company will prepare for the drilling of up to five development wells in the KRI which will begin the following year. It is also moving ahead on the evaluation of the highly prospective Block 6 in Egypt, interpreting the infill seismic data that was acquired in mid-2020 and planning for drilling the next exploration well in 2023.

Sale of Egypt assets

In October 2020 Dana Gas entered into a binding agreement with IPR Wastani Petroleum Ltd, for the sale of its onshore Egyptian producing oil and gas assets for a cash consideration of up to $236 million including contingent payments. The sale is on track for completion in H1 2021. The Company will retain its interests in its exciting offshore exploration concession, North El Arish (Block 6) which contains material gas resource potential in excess of 20 Tcf.

Liquidity and Collections

The Group’s cash balance at year-end stood at $108 million. The Board is considering transferring voluntary reserves into retained earnings to support dividend capacity subject to shareholder approval.

The Group collected a total of $182 million in 2020 (2019: $285mm) with Egypt and KRI contributing $80 million (2019: $138mm) and $102 million (2019: $139mm) respectively.
As of 31 December 2020, the Company’s Egypt receivables stood at $130 million (AED 477mm).

In the KRI, regular payments have been received since March 2020. The KRG maintained its commitment to pay its invoices on time despite facing fiscal challenges throughout the year. Currently, $39 million is outstanding (DG 35% share). The Company has received notification from the KRG on the mechanism for settlement of the outstanding receivables.

(Source: Dana Gas)

The post Dana Gas to Increase Drilling in Iraqi Kurdistan first appeared on Iraq Business News.

Posted on

Khor Mor Gas Plant reaches Record Production

Dana Gas has announced the production of sales gas from Pearl Petroleum‘s Khor Mor Gas Plant in the Kurdistan Region of Iraq (KRI) reached a new record level of 430MMscf/d on 15 December 2020.

Fourth quarter’s average gas production as of 15 December 2020 is 400MMscf/d, an 8% increase on Q4 2019’s average production of 370MMscf/d.

Pearl Petroleum has also restarted expansion plans in the KRI on the 15 December. This follows the suspension of work in March 2020 due to Covid-19 restrictions. All parties working on the project are fully committed to executing the expansion project as quickly and as safely as possible.

The Company expects to complete the first 250 MMscf/d gas processing train in Q1 2023 and is also examining ways to reduce the schedule further.

In line with the Kurdistan Regional Government (KRG) commitment to review the outstanding December 2019 to February 2020 invoices totalling $30 million, Dana Gas notes Pearl Petroleum’s confirmation of receipt of a payment plan proposal from the KRG to pay down past receivables during 2021 as long as Brent remains above $50/bbl.

Pearl Petroleum continues to engage constructively with the KRG on this matter to ensure timely payment. The KRG has maintained regular monthly payments since March 2020.

Dr Patrick Allman-Ward, CEO of Dana Gas, commented:

“Our joint operations at Pearl Petroleum continue to set new records with production output whilst maintaining an excellent HSSE track record, validating our long-term strategy to concentrate on further developing our world-class fields in the KRI. We are getting tremendous support from the KRG, which has given us the green-light to restart the civil engineering works under strict health protocols and controls.

“This clears a major hurdle and puts us on a path for first gas from the new train in Q1 2023. I am also pleased to provide an update on our Q4 average gas production, which is 8% higher at 400MMscf/d than in the same period last year.

“In addition, our commitment and contribution to the people of the KRI remains as strong as ever. Our partnership is now in its 12th year. 2020 has been very challenging due to the restrictions imposed by the global pandemic but the team has worked tirelessly to keep our operations ongoing throughout the year, adhering to strict health and safety protocol to ensure the continuous flow of gas to power the KRI’s electricity needs.”

(Source: Dana Gas)

The post Khor Mor Gas Plant reaches Record Production first appeared on Iraq Business News.

Posted on

Iraq could surpass Saudi Arabia in Oil Production

By Padraig O’Hannelly.

A senior oil executive has predicted that Iraq could surpass Saudi Arabia as an oil producer.

Addressing delegates at CWC‘s Iraq Petroleum conference in London, Majid Jafar (pictured), CEO of Sharjah-based Crescent Petroleum, said:

“Iraq is hugely underexplored. We at Crescent know of 300 structures just in the Western Desert that have yet to be drilled, so I for one believe that Iraq has a lot of potential, and I wouldn’t be surprised if it becomes the largest producer in OPEC during my career.”

Crescent Petroleum has an interest in the Khor Mor field in the Kurdistan Region of Iraq, and has signed initial contracts to develop the oil fields of Gilabat-Qumar (in Diyala), Khashim Ahmer-Injana (in Diyala), and Khudher Al-Mai [Khider al-Mai] (in Basra and Muthana).

Posted on

Iraq Britain Business Council welcomes 4 New Members

By John Lee.

The Iraq Britain Business Council (IBBC) has welcomed four new members, bringing its membership to 71 companies:

Crescent Petroleum: Sharjah-based Crescent Petroleum is the only foreign oil and gas company to maintain a continuous presence in Iraq for three decades, and is the largest private oil and gas investor in the Kurdistan Region of Iraq.

Sardar Trading Agencies (STA): One of the core companies of Sardar Group, with more than 50 years of experience in the Iraqi private business field, mainly in the automotive segment.

Stirling Education: The Luxembourg-based company is committed to providing excellent affordable education and pastoral care for students in Iraq. Across Iraq, they have around 17,000 students, 42 schools and two university campuses.

Tube Tech International: UK-based Tube Tech is a world leader in the removal of fouling from refinery, petrochemical and energy process assets.

(Source: IBBC)

Posted on

Dana Gas doubles Sales in Iraqi Kurdistan

By John Lee.

Sharjah-based Dana Gas has announces that during Q1 2019, Pearl Petroleum has received $112 million (AED 411mm) 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 (AED 143mm).

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 of 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.

(Source: Dana Gas)

Posted on

Dana Gas Boosts Production in Kurdistan

By John Lee.

Sharjah-based Dana Gas has announced that its average production for Q1 2019 has increased by 6% year-on-year to 68,700 boepd from 65,000 boepd in Q1 2018.

The first quarter production increase was led by the Kurdistan Region of Iraq (KRI), which leapt to 32,750 boepd in Q1 2019 from 26,300 boepd in Q1 2018.

This increase was principally due to additional production from the completed debottlenecking project that came on-stream in October 2018 and took gas production in the KRI from 300 MMscf/d to 400 MMscf/d, an increase of over 30%.

On a quarter by quarter comparison, Q1 2019 production grew by 5% from Q4 2018, reflecting the increase in production from the KRI and supported by having brought the Balsam-8 well in Egypt on-stream in Q4.

Dr Patrick Allman-Ward, CEO, Dana Gas, said:

“The two major growth projects completed in 2018 – the debottlenecking project in the KRI and the Balsam-8 well in Egypt – have proven to be materially value accretive both operationally and financially. 

“Our production numbers are up 6% in the first quarter 2019 and we expect this increase in production to have a positive impact on the Company’s revenues since we are now realising gas sales in the KRI and we will be benefiting from the steady increase in oil prices since Q4 2018.“

(Source: Dana Gas)

Posted on

Dana Gas Increases Production in Iraq

Dana Gas PJSC, the Middle East’s largest regional private sector natural gas company, announces that as a result of the ramp up of production from its debottlenecking project in the Kurdistan region of Iraq, its group production reached 70,000 barrels of oil per day (boepd) on the 19 November and has since been sustained above that level.

The Company’s principal operations are in the Kurdistan Region of Iraq (KRI) and Egypt, where the drilling of the Balsam-8 well has also led to a sharp increase in overall production. Current group production, in excess of 70,000 boepd, represents a significant increase compared to the Company’s 9M 2018 average of 62,250 boepd.

Dr Patrick Allman-Ward, CEO, Dana Gas, said:

“Production in excess of 70,000 barrels oil equivalent per day is a great achievement for Dana Gas. At the start of the year, we planned a drilling programme in Egypt and a debottlenecking project in the KRI that would significantly increase production. We have successfully delivered both projects. The increase in production will help offset the lower realised hydrocarbon prices that have impacted the oil industry in the last quarter and support growth in our revenue and net profit figures for the full year 2018 and beyond.

“We remain excited about the long-term future of our world-class assets in the KRI. Further investment is underway to double current production to 900 MMscf/d over the coming three years, together with an increase in condensate to 36,000 bpd and LPG to 1200 MTpd.”

In the fourth quarter 2018, Dana Gas Egypt completed the drilling of the Balsam-8 well and tied it in to the network. The well was completed ahead of schedule and under budget, adding over 5,000 boepd to the Company’s output.

In the KRI, the Company announced a 30% increase in production capacity at the Khor Mor field (pictured), which it jointly operates on behalf of Pearl Petroleum. The expansion of the gas processing plant consisted of a series of plant additions and modifications to de-bottleneck throughput, raising output capacity from 305 MMscf/d of natural gas to 400 MMscf/d, with over 15,000 barrels per day of condensate. This is expected to add up to $50 million annually to the top line without incurring any additional operational costs.

The Company recently posted a strong set of quarterly financial results. 9M 2018 revenue increased 6% to $351 million (AED1,287 mm) from $330 million (AED1,210 mm) over the same period last year and 9M 2018 net profit was $41 million (AED149 mm) versus a net loss of $6 million (AED22 mm) in 9M 2017, excluding one-off items.

(Source: Dana Gas)