Dana Gas Agrees to $236 Million Sale of Egypt Assets to IPR

(Bloomberg) -- Dana Gas PJSC agreed to sell its Egyptian oil and gas fields for as much as $236 million, enabling it to repay debt associated with Islamic bonds that mature this month.

The company, based in the United Arab Emirates, will receive $153 million in cash and as much as $83 million in contingent payments for the sale to IPR Energy Group, it said in a statement. Dana Gas also will take an impairment charge in the third quarter related to the coronavirus pandemic’s impact on its overall business, it said, without disclosing the size of the charge.

The shares rose as much as 2% to 71.4 fils, giving the company a market value of about 5 billion dirhams ($1.36 billion).

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.

Read more: Dana Gas Raises $90 Million Loan to Help Settle Upcoming Sukuk

The Egypt deal allows Dana Gas to focus on expanding production in the Kurdish region of northern Iraq, Chief Executive Officer Patrick Allman-Ward said in the statement. Iraq will become the company’s main area of operation.

IPR Energy’s unit IPR Wastani Petroleum Ltd. is buying all of Dana Gas’ onshore Egyptian oil and gas blocks, which last year accounted for production of 30,950 barrels of oil equivalent per day. Dana Gas retains exploration blocks in Egypt.

The company said it had received four offers for the assets and had to extend talks due to coronavirus-related restrictions. Tudor, Pickering, Holt & Co. advised it on the sale.

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