After opening seven new fields in Egypt, Sharjah's Dana Gas is to retain 100 per cent of its concession in the Nile Delta region the company said.
Dana decides to keep its Nile Delta gas concessions
Dana Gas says it will retain natural gas exploration concessions in Egypt's Nile Delta region.
The Middle East's largest private gas company said yesterday it chose to hold on to its 100 per cent stake partly because of a 20 per cent boost in reserves last year, largely from seven new gasfield discoveries.
Last year the firm, based in Sharjah, said it could farm out up to 30 per cent of its concessions in the Nile Delta.
"[The decision] is in the interest of the company and the interest of our shareholders," said Nasir Akram, a company spokesman.
Dana Gas, traditionally one of the most active stocks on the Abu Dhabi bourse, benefited from a boost in early trading yesterday but closed without any net change from the previous day. Trading volume yesterday, at more than 29.5 million shares, was more than twice the 50-day average. The company's stock has been on the rise since news that, along with other UAE firms, it was likely to benefit from Iraq's plans to recognise oil and gas production contracts issued by the Kurdish government.
Dana Gas plans to grow processing capacity to handle the additional Egyptian output, which last year the firm estimated at 42,000 barrels of oil equivalent per day. It revised its plans to build a gas processing plant east of the Nile River, increasing planned capacity from 50 million standard cubic feet per day to 120 million standard cu ft per day. The company plans to drill 14 exploratory wells this year.
The additional resources would help to mitigate Egypt's energy shortages, said Sam Ciszuk, a Middle East energy analyst with IHS in London.
"This is very welcome for Egypt because, from a government point of view, this is the cheapest gas possible," Mr Ciszuk said. "They have a domestic shortage of gas, and development hasn't gone as quickly as they wanted." Dana Gas currently sells 70 per cent of its gas to Egypt at a fixed price. Other companies had held off on Egypt exploration because they wanted better rates or the right to export more gas, Mr Ciszuk said.
"The unclarity about that made companies hold off on development while Egypt worked out the framework," he said.