Dana Gas PJSC, the Middle East's largest regional natural gas company, has achieved an important milestone with the first international sale of condensate in Egypt under the Gas Production Enhancement Agreement (GPEA).
The first cargo is approximately 150,000 barrels of Wastani condensate and was loaded on 15 April 2017. The buyer has issued a letter of credit and payment amounting US$ 7.2 million will be made to Dana Gas directly in USD. The cargo is the first to be directly exported by Dana Gas under the GPEA signed with the Egyptian government in August 2014. The cash proceeds generated from the Government's share of the incremental condensate sales will be used to start paying-down the outstanding receivables owed to Dana Gas by the Egyptian Government.
Dr Patrick Allman-Ward, CEO, Dana Gas, said:
"We are pleased to have sold our first international cargo under the GPEA agreement. It was a landmark win-win deal at the time and importantly the mechanism is shown to be working. We can now continue to directly sell and export condensate cargoes internationally. By maintaining our production rate of roughly 40,000 barrels of oil equivalent per day, we expect to sell three additional cargoes in the next 12 months.
"The cash proceeds of US$ 7.2 million will be offset against our overdue receivables, which stand at $289 million. However, collections of our overdue receivables in general remain well below our expectations. We are yet to receive a significant payment this year. We continue to engage with various government entities and we hope that the Egyptian Government will resolve the situation favourably in the near future."
In the first quarter 2017, collections in Egypt were $13 million, representing 52% of total billings. Total receivable balance increased to $289 million from $265 million as of 31 December 2016. In Kurdistan, collections were $31 million, representing just over 100% of total billings. Total receivable balance remains at $713 million.
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