SHARJAH, UAE: Dana Gas PJSC has terminated its agreement for the sale of its Egyptian assets, announced on 25th October 2020, a news release said.
A number of conditions precedent to the transaction could not be completed to the satisfaction of both parties prior to the long stop date of the Sale and Purchase Agreement (SPA), which was Wednesday 14th April 2021.
The Board has therefore decided to retain and operate the assets in Egypt alongside the highly prospective exploration acreage offshore Block 6.
While the Company is still assessing these in detail, it is expected that there will be positive consequences on the Company’s profitability and balance sheet and improvement in its cash flow in the coming years.
These beneficial consequences result from the changed circumstances in the global economy and energy markets.
Dr. Patrick Allman-Ward, CEO, Dana Gas, commented: “Dana Gas has worked diligently to finalise this transaction. However, satisfaction of the conditions precedent in the SPA proved problematic between the parties. Once the due date for satisfaction of those conditions expired, and after due consideration, the Company resolved to exercise the right to terminate the SPA in accordance with its terms.
“We have an excellent track record of operating in Egypt over the past 14years.We remain fully committed to managing these assets for the benefit of all our stakeholders, including the Egyptian Government. We look forward to maximizing the value of both our onshore producing assets and focussing our attention on testing the enormous potential of our offshore Block 6 Concession Area where we are planning to drill an exploration well Q1 2023.”
Dana Gas had targeted completing the sale in the first quarter of the year to raise cash needed to pay sukuk due at the end of this month.
The sale was delayed due to the coronavirus, and Dana Gas appointed a financial adviser in July, prompting investors to question whether the company would be able to make the payment. The company announced earlier this month it was arranging a bridge loan to help pay the sukuk, of which $309 million is outstanding.
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